NCLT Admits Edelweiss ARC’s ₹446 Crore Insolvency Plea Against ITMC Developers, Initiates CIRP

Mumbai, April 17: The National Company Law Tribunal (NCLT) has admitted an insolvency petition filed by Edelweiss Asset Reconstruction Company Ltd (EARCL) against ITMC Developers Private Limited, initiating the Corporate Insolvency Resolution Process (CIRP) over a default exceeding Rs 446 crore.

Meanwhile, the tribunal appointed Stress Credit Resolution Private Limited as the Interim Resolution Professional (IRP) to take over the management of the company and conduct the CIRP.

Default details and tribunal observations

Edelweiss ARC, acting as trustee of EARC Trust SC-394, claimed a total default of Rs 446.27 crore arising from a term loan and non-convertible debentures extended to ITMC Developers. The date of default was recorded as November 29, 2019.

“Based on an examination of the above terms of the Loan Agreement, we find that the Corporate Debtor was required to pay the outstanding amount as per the above terms and in failure to do so, an event of default would occur. Further, from the Statement of Accounts submitted before this Tribunal, it is evident that the last interest payment was remitted on December 23, 2019. Since that date, no further payments toward the principal or interest have been paid by the Corporate Debtor. Consequently, the EARCL has successfully demonstrated a persistent breach of the repayment schedule. In view of the aforementioned contractual provisions and the evidentiary record, we find that a default has occurred,” the tribunal maintained.

Plea on res judicata rejected

ITMC Developers had argued that the petition was barred by the principle of constructive res judicata, citing withdrawal of an earlier insolvency plea.

However, the tribunal dismissed this contention, noting that the earlier petition had been withdrawn with liberty to file afresh and was never decided on merits.

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“In the instant case, the matter is never finally decided. The Applicant approached this Tribunal and withdrew the petition stating that the parties are trying for settlement and sought liberty to file the application afresh if settlement did not work out. As a result, the Tribunal earlier had granted liberty to the Applicant to file the matter afresh. It is pertinent to note that the Corporate Debtor never filed an appeal on the liberty granted to the Applicant by the order of the Tribunal dated January 14, 2025.”

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