NCLT Bengaluru Initiates Insolvency Against Mantri Developers

Last week, the National Company Law Tribunal (NCLT) in Bengaluru started the process of dealing with Mantri Developers' financial difficulties. Justice (retd) T Krishnavalli and technical member Manoj Kumar Dubey reviewed a case presented under Section 7 of the Insolvency and Bankruptcy Code (IBC) by Indiabulls Housing Finance.

Indiabulls Housing Finance claimed that Mantri Developers did not pay an amount of over ₹450 crores, leading to the application against the company. Indiabulls claimed that Mantri Developers did not comply with their loan agreement, which caused them to miss payment deadlines. Despite receiving multiple notices, neither the debt or nor the co-borrowers paid the outstanding amount, according to Indiabulls.

On the other hand, Mantri claimed that the creditor caused a significant delay in disbursing the loan amount, leading to severe project timeline issues and cash flow problems. Additionally, Mantri argued that the creditor continued to provide further financial facilities even after filing the proceedings, indicating that the company was not in financial distress. In fact, Mantri submitted that despite discussing the possibility of a settlement and agreeing on various settlement agreements with the creditor, none of them came to fruition. The company believes that the proceedings were initiated solely to gain leverage in the settlement negotiations, which they brought up before the Tribunal.

After carefully reviewing the case, the NCLT determined that Mantri had taken out loans from Indiabulls and failed to repay them, thereby satisfying the first requirement of debt. As the default amount exceeded ₹1 crore, the Tribunal accepted the petition.

The NCLT then appointed Ahsan Ahmad as the Interim Resolution Professional and instructed the creditor to provide him with ₹2 lakhs to cover the costs associated with issuing public notice and accepting claims.