In a recent development, the National Company Law Tribunal (NCLT) has rejected an insolvency plea filed by Piramal Capital and Housing Finance, representing the original lender Dewan Housing Finance Corporation (DHFL), against Township Developers India. The financial creditor initiated the insolvency petition, citing the realty developer as a guarantor for defaulting on mortgage loans amounting to over ₹5,855 crore. Persons familiar with the matter indicate that the Piramal Group is poised to contest this decision by appealing to the National Company Law Appellate Tribunal (NCLAT).
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The Mumbai bench of the bankruptcy court dismissed the petition, citing technical constraints related to the timing of the application. The tribunal considered the implications of Section 10A of the Insolvency & Bankruptcy Code, introduced on March 25, 2020, amid the COVID-19 pandemic. This provision stipulates a moratorium on filing corporate insolvency resolution process applications for defaults arising on or after March 25, 2020, for a specified period.
The tribunal clarified that the date of default should be determined from the initial invocation notice, notifying the corporate debtor of the invoked corporate guarantee and requesting payment for the outstanding amount on behalf of the borrower.
