Debt-ridden Supertech Ltd, which is facing insolvency proceedings, should come up with a settlement plan that entails "definite upfront payment" of dues, according to one of its lenders Union Bank of India.
The bank on whose application the National Company Law Tribunal (NCLT) decided to initiate insolvency resolution proceedings against Supertech Ltd has made the submissions before the appellate tribunal NCLAT.
After the NCLT order for insolvency proceedings, the promoters of Supertech Ltd challenged the ruling before the National Company Law Appellate Tribunal (NCLAT).
On March 25, the Delhi bench of the NCLT had directed to initiate insolvency proceedings against Supertech Ltd over a petition filed by the Union Bank of India for non-payment of dues worth around Rs 432 crore.
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The order has been challenged by R K Arora, director of the suspended board of Supertech Ltd, which is one of the firms of the Supertech group.
In a hearing held on Tuesday, the NCLAT extended its stay over the formation of the committee of creditors (CoC) under the insolvency proceedings till May 2, after Arora's counsel sought one more chance to give a better proposal to the bank.
Union Bank of India informed that it had received a proposal from Supertech Ltd promoters, but the same was rejected.
"... Counsel for the Bank Shri Alok Kumar submits that if some proposal is to be given, there should be definite upfront payment and the payment should not be for such a long duration as has been suggested earlier by the Appellant (Arora)," the NCLAT order said.
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The counsel representing R K Arora informed the appellate tribunal that they are "under negotiations" with its financial creditor and had also offered some upfront payment amount along with other terms as has been indicated by the Bank.
Arora's counsel requested "one more opportunity" to enter into dialogue with the bank for giving "some better proposal".
Accepting the request, a two-member NCLAT bench headed by Chairperson Justice Ashok Bhushan said: "Considering the submissions, we adjourn this appeal to May 2, 2022".
"In the meantime, the interim order shall continue," said NCLAT.
Earlier, on April 12, the insolvency appellate tribunal had extended the stay till Tuesday after the company had requested for a week's time to enable it to approach the bank for negotiations.
NCLT had also appointed Hitesh Goyal as the Interim Resolution Professional (IRP) superseding the board of Supertech Ltd.
The default pertains to the loan given by the Union Bank of India to Eco Village II project at Greater Noida (West) in Uttar Pradesh, which was being developed at a cost of Rs 1,106.45 crore.
Supertech Ltd has 38,041 flats and out of them, it has delivered 27,111 flats.
As many as 10,930 homes are yet to be delivered and among them, over 70 per cent of construction is complete with respect to over 8,000 homes, Supertech Group Managing Director Mohit Arora said last month.
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The formation of CoC is an important step for the Corporate Insolvency Resolution Process (CIRP) under IBC (Insolvency & Bankruptcy Code).
Once NCLT initiates CIRP against a debt-ridden firm, it appoints an Interim Resolution Professional (IRP) after suspending the board of the firm.
Article 18 of IBC mandates that it is the duty of the IRP to constitute the committee based on all the claims received against the corporate debtor and the determination of the financial position of the corporate debtor.
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