The National Company Law Tribunal (NCLT) on Thursday directed lenders of Lavasa Corporation Ltd to consider an equitable distribution of proceeds from the sale of the township developer and its two units to winning bidder Darwin Platform Infrastructure Ltd.
The tribunal directed the winning bidder to submit a modified plan to the resolution professional who should place the same before the committee of creditors for their consideration.
While passing the order, an NCLT division bench comprising Justice Shyam Babu Gautam and P N Deshmukh relied on the Supreme Court’s order on Rainbow Papers, where it said secured creditors cannot secure their dues at the cost of statutory dues of any government or government authority.
Darwin’s resolution plan for Lavasa has provided 20.5% of their claimed amount to its secured creditors, while it provided only 0.05% of claimed amount for government dues, 0.45% for vendors, and 0.11% for homebuyers in the township.
The NCLT bench observed that the distribution of proceeds is not in “a rational and equitable manner”.
“There is a wide disparity between the percentage of the amounts provided to the secured financial creditors and the government dues under the plan, which are now treated as ‘secured’ dues in the light of the judgment passed by the honourable Supreme Court,” it said.
In December 2021, 96% of creditors had approved Darwin’s plan, offering staggered payment of Rs 1,601 crore against total verified claims of Rs 7,965 crore.
The plan provided Rs 1,152 crore for secured creditors (20% of their claims), Rs 442 crore for class A financial creditors (77% of claims), Rs 50,000 for government dues (0.05%), Rs 5.57 crore for employees (59%), Rs 6.30 crore for homebuyers (0.11%) and Rs 93.2 lakhs for trade creditors (0.45%).
The tribunal in its order said, “Secured financial creditors approved this resolution plan for securing maximum recovery of their dues while meting out disproportionate and discriminative treatment qua the government authorities and other statutory claims and such treatment cannot be allowed.”
Set up in 2000 by Ajit Gulabchand-led HCC, Lavasa was developing the country’s first privately developed city spread over 20,000 acres in the Mulshi and Velhe areas in Maharashtra’s Pune district, around 180 km from Mumbai. However, the project has been entangled in various issues, including environmental violations and land acquisition, resulting in delayed payments to lenders.
NCLT admitted Lavasa for debt resolution in August 2018, and in February 2020, it approved a consolidation resolution by including two wholly owned subsidiaries, Warasgaon Assets Maintenance (WAML) and Dasve Convention Centre (DCCL).
HCC holds a 68.7% stake in Lavasa, while Avantha Group has 17%, Venkateshwara Hatcheries 7.8%, and Vithal Maniar holds 6.3% in the firm.
The tribunal directed the winning bidder to submit a modified plan to the resolution professional who should place the same before the committee of creditors for their consideration.
While passing the order, an NCLT division bench comprising Justice Shyam Babu Gautam and P N Deshmukh relied on the Supreme Court’s order on Rainbow Papers, where it said secured creditors cannot secure their dues at the cost of statutory dues of any government or government authority.
Darwin’s resolution plan for Lavasa has provided 20.5% of their claimed amount to its secured creditors, while it provided only 0.05% of claimed amount for government dues, 0.45% for vendors, and 0.11% for homebuyers in the township.
The NCLT bench observed that the distribution of proceeds is not in “a rational and equitable manner”.
“There is a wide disparity between the percentage of the amounts provided to the secured financial creditors and the government dues under the plan, which are now treated as ‘secured’ dues in the light of the judgment passed by the honourable Supreme Court,” it said.
In December 2021, 96% of creditors had approved Darwin’s plan, offering staggered payment of Rs 1,601 crore against total verified claims of Rs 7,965 crore.
The plan provided Rs 1,152 crore for secured creditors (20% of their claims), Rs 442 crore for class A financial creditors (77% of claims), Rs 50,000 for government dues (0.05%), Rs 5.57 crore for employees (59%), Rs 6.30 crore for homebuyers (0.11%) and Rs 93.2 lakhs for trade creditors (0.45%).
The tribunal in its order said, “Secured financial creditors approved this resolution plan for securing maximum recovery of their dues while meting out disproportionate and discriminative treatment qua the government authorities and other statutory claims and such treatment cannot be allowed.”
Set up in 2000 by Ajit Gulabchand-led HCC, Lavasa was developing the country’s first privately developed city spread over 20,000 acres in the Mulshi and Velhe areas in Maharashtra’s Pune district, around 180 km from Mumbai. However, the project has been entangled in various issues, including environmental violations and land acquisition, resulting in delayed payments to lenders.
NCLT admitted Lavasa for debt resolution in August 2018, and in February 2020, it approved a consolidation resolution by including two wholly owned subsidiaries, Warasgaon Assets Maintenance (WAML) and Dasve Convention Centre (DCCL).
HCC holds a 68.7% stake in Lavasa, while Avantha Group has 17%, Venkateshwara Hatcheries 7.8%, and Vithal Maniar holds 6.3% in the firm.
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