NCLT initiates insolvency process against DS Kulkarni Developers
The IBC, which came into force in 2016, is the country’s bankruptcy law that seeks to consolidate the existing framework by creating a single law for insolvency and bankruptcy.
The Mumbai bench of the National Company Law Tribunal (NCLT) has initiated a corporate insolvency resolution process against D S Kulkarni Developers Limited (DSKDL), the sole public limited company of jailed developer D S Kulkarni, alias DSK, after admitting a petition for the same by the Bank of Maharashtra (BoM) over a default of Rs119.48crore debt by the firm.
An interim resolution professional (IRP), appointed by the tribunal under the Insolvency and Bankruptcy Code (IBC), released a public announcement on Monday calling upon the financial creditors as well as fixed deposit (FD) holders and home buyers in DSKDL projects to submit their claims with proof by October 9.
The IBC, which came into force in 2016, is the country’s bankruptcy law that seeks to consolidate the existing framework by creating a single law for insolvency and bankruptcy. Among other things, it provides for a time-bound resolution of insolvency and bankruptcy proceeding involving corporates and individuals.
In an order on September 26, a two-member NCLT bench of judicial member V P Singh and technical member Rajesh Singh placed the corporate debtor, i.e. the DSKDL, under a moratorium by prohibiting institution of any suits or continuation of pending suits against the company before any court, tribunal or adjudicating authority.
The bench also restrained the firm from transferring, alienating or disposing of any of its assets till “the completion of the insolvency process or until the bench approves a resolution plan under IBC or an order for liquidation of the corporate debtor”.
“The insolvency process is civil in nature, aimed at prioritising settlement of claims by financial creditors, FD holders and home buyers to the extent of DSKDL. It is independent of the ongoing criminal proceeding against DSK and others under the MPID Act before a Pune court,” special public prosecutor Pravin Chavan told TOI.
However, Chinmay Inamdar, one of the lawyers representing DSK in the Pune court, said, “An insolvency process under the IBC will have an over-riding effect on everything else, including proceedings under the MPID Act, as far as assets belonging to the DSKDL is concerned. The immediate impact will be on the auction of DSKDL vehicles which was recently cleared by the Pune court. Even the criminal proceeding, at some point in time ahead, will land before the special court for Prevention of Money Laundering Act (PMLA).”
On February 14, the Mumbai zonal office of the Enforcement Directorate provisionally attached DSK and his group’s immovable and movable properties totally worth Rs904.45crore. An adjudicating authority under the PMLA in New Delhi confirmed the attachment on August 5, paving the way for the ED to file a charge-sheet against DSK and others before the special PMLA court in Mumbai. “Once this happens, the prosecutor there will move a plea for clubbing all cases pending elsewhere before the PMLA court,” said Inamdar.
(BoM Case)
# Bank of Maharashtra sought insolvency process under the IBC against DSKDL on the grounds that the company defaulted on July 29, 2017, in paying debt worth Rs119.48 crore, including unapplied interest, sanctioned on February 24, 2016
# On July 24, 2017, the bank classified DSKDL as a non-performing asset and issued a notice initiating recovery process under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002
# On December 15, 2018, the Debts Recovery Tribunal (DRT) bench in Pune directed DSDKL to pay an aggregate sum of Rs74.07Cr to the bank
# The NCLT held that the bank established the default on the part of the DSKDL and the DRT. Pune’s order further establishes the same
[Courtesy: ET]
The Mumbai bench of the National Company Law Tribunal (NCLT) has initiated a corporate insolvency resolution process against D S Kulkarni Developers Limited (DSKDL), the sole public limited company of jailed developer D S Kulkarni, alias DSK, after admitting a petition for the same by the Bank of Maharashtra (BoM) over a default of Rs119.48crore debt by the firm.
An interim resolution professional (IRP), appointed by the tribunal under the Insolvency and Bankruptcy Code (IBC), released a public announcement on Monday calling upon the financial creditors as well as fixed deposit (FD) holders and home buyers in DSKDL projects to submit their claims with proof by October 9.
The IBC, which came into force in 2016, is the country’s bankruptcy law that seeks to consolidate the existing framework by creating a single law for insolvency and bankruptcy. Among other things, it provides for a time-bound resolution of insolvency and bankruptcy proceeding involving corporates and individuals.
In an order on September 26, a two-member NCLT bench of judicial member V P Singh and technical member Rajesh Singh placed the corporate debtor, i.e. the DSKDL, under a moratorium by prohibiting institution of any suits or continuation of pending suits against the company before any court, tribunal or adjudicating authority.
The bench also restrained the firm from transferring, alienating or disposing of any of its assets till “the completion of the insolvency process or until the bench approves a resolution plan under IBC or an order for liquidation of the corporate debtor”.
“The insolvency process is civil in nature, aimed at prioritising settlement of claims by financial creditors, FD holders and home buyers to the extent of DSKDL. It is independent of the ongoing criminal proceeding against DSK and others under the MPID Act before a Pune court,” special public prosecutor Pravin Chavan told TOI.
However, Chinmay Inamdar, one of the lawyers representing DSK in the Pune court, said, “An insolvency process under the IBC will have an over-riding effect on everything else, including proceedings under the MPID Act, as far as assets belonging to the DSKDL is concerned. The immediate impact will be on the auction of DSKDL vehicles which was recently cleared by the Pune court. Even the criminal proceeding, at some point in time ahead, will land before the special court for Prevention of Money Laundering Act (PMLA).”
On February 14, the Mumbai zonal office of the Enforcement Directorate provisionally attached DSK and his group’s immovable and movable properties totally worth Rs904.45crore. An adjudicating authority under the PMLA in New Delhi confirmed the attachment on August 5, paving the way for the ED to file a charge-sheet against DSK and others before the special PMLA court in Mumbai. “Once this happens, the prosecutor there will move a plea for clubbing all cases pending elsewhere before the PMLA court,” said Inamdar.
(BoM Case)
# Bank of Maharashtra sought insolvency process under the IBC against DSKDL on the grounds that the company defaulted on July 29, 2017, in paying debt worth Rs119.48 crore, including unapplied interest, sanctioned on February 24, 2016
# On July 24, 2017, the bank classified DSKDL as a non-performing asset and issued a notice initiating recovery process under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002
# On December 15, 2018, the Debts Recovery Tribunal (DRT) bench in Pune directed DSDKL to pay an aggregate sum of Rs74.07Cr to the bank
# The NCLT held that the bank established the default on the part of the DSKDL and the DRT. Pune’s order further establishes the same
[Courtesy: ET]
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