Mumbai, Jan 30: The National Company Law Tribunal (NCLT) has approved a ₹919-crore resolution plan for the Juhu-based non-operational Hotel Horizon.
Recovery for financial creditors
As per the approved resolution plan, secured financial creditors will receive an upfront payment of ₹919 crore, which would amount to a recovery of approximately 74 per cent of their admitted claims. The entire procedure has been directed to be completed within 44 days from the date of approval.
Consortium-backed plan cleared unanimously
The resolution plan was submitted by a consortium comprising Oberoi Realty Limited, Shree Naman Developers Private Limited and JM Financial Properties and Holdings Limited, and was unanimously approved by the Committee of Creditors (CoC) with a 100 per cent voting share.
The plan also provides for priority payment of insolvency resolution process costs and includes provisions for additional payments, if required, to ensure compliance with applicable laws.
CIRP initiated in November 2024
Hotel Horizon Private Limited was admitted into the corporate insolvency resolution process (CIRP) on November 19, 2024, following defaults in repayment of its dues.
Objections by suspended directors rejected
During the proceedings, the suspended board of directors strongly opposed the resolution plan on multiple grounds, including alleged conflict of interest, undervaluation of assets, approval of inflated and time-barred claims, and procedural lapses by the resolution professional.
The suspended directors contended that the plan value of approximately ₹919 crore was inadequate considering the significant development potential of the prime Juhu property. They also alleged that material valuation reports were withheld, discouraging serious bidders from participating in the resolution process.
However, earlier in January, the tribunal dismissed these objections, holding that the commercial wisdom of the Committee of Creditors is paramount and cannot be subjected to judicial interference unless clear illegality or material irregularity is established.
Contempt finding against directors
Subsequently, the resolution professional again approached the tribunal alleging non-cooperation by the suspended directors. The NCLT held that the directors were guilty of civil contempt for wilfully disobeying tribunal directions and for failing to hand over possession and control of the corporate debtor’s properties and assets.
Tribunal’s final approval
On January 29, the tribunal finally approved the resolution plan. While granting approval, the bench observed that the plan complied with the mandatory requirements of Section 30(2) of the Insolvency and Bankruptcy Code, 2016, as well as the relevant Corporate Insolvency Resolution Process (CIRP) regulations.
The tribunal noted that the resolution plan had been approved unanimously by the financial creditors and reiterated that the commercial wisdom of the CoC could not be interfered with in the absence of any illegality or material irregularity.
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The bench further held that the approved plan ensures maximisation of asset value and provides a feasible and viable framework for the revival of the company as a going concern.
It also clarified that all claims not forming part of the approved resolution plan shall stand extinguished, in accordance with the Supreme Court’s ruling in Ghanshyam Mishra and Sons Private Limited versus Edelweiss Asset Reconstruction Company Limited.
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