NCLT Delhi admits IBC Section 7 petition against M/S Anand Divine Developers Pvt. ltd. and launches the CIRP

the NCLT Main BenchDelhi, consisting of Shri Ramalingam Sudhakar (president) and Shri Avinash Kumar Srivastava (Technical Member), admitted a claim under Section 7 of the Insolvency and Bankruptcy Code, 2016 (“IBC”) against M/s Anand Divine Developers Pvt. ltd. and initiated the Corporate Insolvency Resolution Process (“CIRP”) to see an order dated 25.03.2022. ATS Infrastructure Limited is the developer of M/s Anand Divine Developers Pvt. ltd.

In 2020, the ICICI Prudential Venture Capital Fund Real Estate Scheme I, through its investment manager, ICICI Prudential Asset Management Company Ltd. (“Financial creditor”) had filed a claim under Section 7 of the IBC before NCLT, Delhi Bench against M/s Anand Divine Developers Pvt. ltd. (the “Debtor Company”) for the initiation of the CIRP.

Facts of the case

The debtor company had entered into an investment agreement with the financial creditor and others in the year 2014. Under the said agreement, the financial creditor had subscribed for 75 Lakh unlisted, secured, cumulative, redeemable and eventually convertible bonds issued by the Debtor Company, having a face value of Rs. 100 each. As a result, the financial creditor had transferred Rs. 75,00,00,000/- to the debtor company in July 2014 and debenture certificates were issued in return. The debtor company’s debentures and bonds were secured.

In 2017, amendments were made to the investment agreement with respect to the returns payable on the debentures and the redemption date was set at 30.09.2018. Under the terms of the investment agreement, the debtor company was required to pay semi-annual interest on the face value of the debenture; repay amounts relating to the debentures as they become due; and to redeem the Debentures on the Redemption Date by paying the subscription amount together with any unpaid interest on the outstanding Debentures. The Corporate Debtor had paid the assessments in 2017 and redeemed 65,62,500 debentures, however, the Financial Creditor still held 9,37,500 debentures.

Default according to investment agreement

A default under the Investment Agreement occurred on 31.03.2018 when the Debtor Company failed to pay the interest due for the period from 01.10.2017 to 31.03.2018. An interest payment notice was issued by the Financial Creditor to the Debtor Company, but the latter did not respect the payment commitments. Subsequently, the debtor company also failed to repay the remaining debentures in September 2018.

The financial creditor issued notices of default to the debtor company, but to no avail. Section 71(8) of the Companies Act 2013 required the debtor company to pay interest and redeem the debentures in accordance with the terms and conditions of the issue.

As of 20.11.2020, the debtor company was liable to pay Rs. 25,46,33,221/- to the Financial Creditor. The finance creditor filed a claim under Section 7 of the IBC before NCLT Delhi, to which no response or submission was filed by the debtor company.

The decision of the bench

The bench, while deciding the case, observed that in view of the indebtedness and default referred to in the petition, the petition is allowed under section 7(5) of the IBC. In addition, the bench, pursuant to Section 13(2) of the IBC, directed the interim resolution practitioner to make a public announcement regarding the admission of the motion under Section 7 of the IBC.

Case title: ICICI Prudential Venture Capital Fund Real Estate Scheme I, through its investment manager ICICI Prudential Asset Management Company Ltd. against M/s Anand Divine Developers Pvt. ltd. (CP No. IB 1101 (PB)/2020)

Advisor for ICICI Prudential Venture Capital Fund Real Estate Scheme I: Adv. Rohan Rajadhyaksha, Adv. Mohit Singh and Adv. Chetan Chawla.

Advice to M/s Anand Divine Developers Pvt. ltd.: Adv. Rishab Kumar (attorney by proxy).

Click here to read/download the order