Mumbai: The National Company Law Tribunal (NCLT) last month agreed to initiate insolvency and bankruptcy proceedings against Radius Estates and Developers, which is indulged in developing work at city's suburban BKC (Bandra-Kurla Complex) area.
The NCLT Coram led by Suchitra Kanuparthi, judicial member, was seized with a plea filed by Beacon Trusteeship Limited that sought insolvency and bankruptcy proceedings against Radius developers.
According to Beacon Trusteeship, the developer was in need of funds for repayment of its existing debts and for expenses related to residential project being developed under the name “Ten BKC” in the city. For this purpose the developer issued 6,500 secured, unlisted, unrated redeemable, non-convertible debentures for a nominal amount of Rs. 1,00,000/- each, aggregating up to Rs. 65 crores for a maximum period of 24 months.
These debentures were subscribed by 167 Debenture Holders in November 2018 after which a Debenture Trust Deed (DTD) was executed, which also mentioned of the quarterly coupon rate at 16 per cent per annum.
However, the developer defaulted in paying four installments following which a defaulter notice was issued to the group and despite that the payments weren't done.
According to the debenture holders, the default aggregated to Rs 21.49 crores.
On the other hand, the developer by a notice informed the debenture holders that it was in talks with certain investors and that it was about to complete the construction work of its project and the sale would soon commence. It claimed that the payments would be done in 180 days.
However, the Coram considered the debenture holders' plea which was supported with "sufficient", documents to substantiate their claims.
"From the material on record, we find that the Beacon Trusteeship has not received the outstanding debt from the Radius group and that the formalities as prescribed under the rules have been completed by the debenture holders. Thus, we are of the conscientious view that this plea deserves ‘Admission’," the Coram said while agreeing to initiate insolvency and bankruptcy proceedings against the developer.