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Nirmal Lifestyle moves NCLAT against appointment of IRP by NCLT, Real Estate News, ET RealEstate

Nirmal Lifestyle moves NCLAT against appointment of IRP by NCLT, Real Estate News, ET RealEstate
MUMBAI: Nirmal Lifestyle Ltd has filed an appeal before the National Company Appellate Law Tribunal (NCLAT) against a recent order of the Mumbai bench of the National Company Law Tribunal (NCLT) which admitted an insolvency resolution petition against the company.

The company, a corporate debtor, had failed to make payment of Rs 286 crores under the facilities it was granted.

The NCLT in its August 5 order, available on Wednesday, appointed chartered accountant Ajit Gyanchand Jain as its interim resolution professional (IRP) to run the day-to-day affairs of the company, in a petition filed financial creditor IDBI Trusteeship Services Ltd under the Insolvency and Bankruptcy Code of 2016.

Ashok Paranjpe, Managing Partner, MDP & Partners who are Solicitors for Nirmal Lifestyle Ltd on Wednesday confirmed that appeal was filed and stated that Consent Terms were executed between the financial creditor and the company for settlement of disputes.

Its appeal is on the grounds that despite settlement terms being executed, NCLT passed interim orders and admitted the insolvency petition against it.

The NCLT bench of Judicial member H V Subba Rao and Technical member Chandrabhan Singh in its order, after hearing advocates Rohit Gupta for IDBI and Simil Purohit for Nirmal, allowed the financial creditor’s plea and initiated corporate insolvency resolution process (CIRP).

The NCLT order also prohibited the institution of suits or continuation of pending suits against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority.

It also prohibited transferring or disposing of any of its assets and any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor.

The order said the advocate for the company had in the virtual final hearing on July 28 had submitted that it was in the process of settling the claims of all creditors and had sought some time. It added since the corporate debtor did not file any reply, the claim of IDBI, “remains unchallenged’’ and that the financial creditor had successfully proved the existence of the debt satisfying the necessary requirement for admission.


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