Mumbai: NCLT Admits Insolvency Plea Against Neelkanth Realtors Over ₹249 Crore Default

Mumbai, April 20: The National Company Law Tribunal (NCLT) has admitted insolvency proceedings against a Thane-based project, “Neelkanth Heights Annexe”, belonging to Neelkanth Realtors Ltd. The tribunal, in its order, specifically clarified that the proceedings will be strictly project-specific.

Tribunal orders project-specific CIRP

“We are of the view that the applicant has established, based on the documents placed on record, that it has advanced a financial debt to the corporate debtor in respect of its project ‘Neelkanth Heights Annexe’, which is in default for an amount exceeding Rs 1 crore. As the default pertains to the construction and development of the said project, the same project must go into CIRP, which shall not be extended to other projects of the corporate debtor,” the tribunal observed in its 151-page order.

“In view of the above, we order commencement of CIRP on the project, i.e., Neelkanth Heights Annexe situated at Survey No. 194/1B at Village Majiwade, Pokhran Road No. 2, Thane West, belonging to the corporate debtor M/s Neelkanth Realtors Limited. As such, the contention of the corporate debtor for project-wise insolvency is allowed,” the order stated.

Financial default and debt details

According to the financial creditor, Catalyst Trusteeship Ltd, the total default stands at Rs 2,49,96,73,124, arising from non-convertible debentures (NCDs) and optionally fully convertible debentures (OFCDs). The date of default was pegged at May 1, 2025 for NCDs and May 2, 2025 for OFCDs. Despite multiple recall notices issued in June 2025, the developer failed to clear its dues.

Catalyst Trusteeship, acting on behalf of debenture holders, stated that the funds were raised for the “Neelkanth Heights Annexe” project in Thane. Around Rs 176 crore was mobilised through NCDs in 2022, followed by a restructuring exercise in December 2024 in which Rs 25 crore was converted into OFCDs. The company, however, defaulted on its repayment obligations under both instruments.

Developer contests insolvency plea

Neelkanth Realtors opposed the plea, contending that no default had occurred and alleging that the proceedings were initiated to derail its proposed initial public offering (IPO). The company argued that delays were caused by the lender’s conduct, including alleged obstruction of refinancing efforts and withholding of approvals.

It further submitted that it faced persistent hurdles in accessing construction cash flows, alleging that the lender delayed or withheld approvals for the use of funds from the escrow account for construction and operational expenses, leading to work stoppages. According to the company, funds generated from sales remained idle in the escrow account due to delays and repeated queries raised by the debenture holder.

Claims of funding efforts and ongoing projects

The developer also claimed to be a going concern with ongoing projects and cited attempts to secure alternative funding, including a proposed Rs 250 crore investment from SWAMIH Investment Fund I, a government-backed fund managed by SBI Cap Ventures Limited. The proposed infusion, it said, was intended to support completion of the ongoing project and its next phase, thereby ensuring sufficient cash flow for repayment.

Tribunal upholds creditor’s claim

However, the tribunal found merit in the financial creditor’s claim, noting that key facts — including issuance of the debentures, their repayment terms, and the existence of default — were undisputed.

It reiterated that at the admission stage under the IBC, the adjudicating authority is only required to determine the existence of a default based on available records and evidence, without delving into disputes raised by the corporate debtor.

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On the issue of restricting the insolvency to a specific project, the bench agreed with the corporate debtor’s contention and ruled that the corporate insolvency resolution process (CIRP) would be confined to the “Neelkanth Heights Annexe” project, as the debt and security were directly linked to it.

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