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The National Company Law Tribunal (NCLT), Mumbai Bench, has given its assent to an enhanced resolution plan proposed by Darwin Platform Infrastructure for the resurgence of Lavasa Corp, the firm behind India's first post-independence modern hill city. The tribunal's endorsement came in the wake of a revised plan to ensure the fair distribution of the Lavasa Corp sale proceeds among its lenders.
Earlier, the tribunal had issued a directive that secured creditors should not be allowed to recover their dues at the expense of statutory dues. This prompted a reassessment and subsequent amendment of the resolution plan.
Judicial member Kuldip Kumar Kareer and technical member Shyam Babu Gautam from the division bench validated Darwin Platform Infrastructure's revised resolution proposal of Rs 1,814 crore, marking an increase from the initially proposed Rs 1,601 crore. The tribunal's 25-page order stated, "The resolution plan complies with the requisite statutory mandates under the Code (IBC), and as such, we endorse it."
Additionally, the tribunal tasked the resolution professional with transferring all documents, premises, and records to Darwin Platform, setting the stage for the planned operational restart.
A resubmitted plan in February resulted in over 84% of lenders voting in favour. The updated plan includes a phased payment of Rs 1,814 crore against Lavasa Corp's total admitted liabilities of Rs 7,965 crore. This strategic move towards achieving the IBC's objective of value maximisation was lauded by Akshat Khetan, founder of AU Corporate & Legal Advisory Services, Mumbai.
The approved scheme allocates Rs 1,152 crore for secured creditors, Rs 5.57 crore for employee claims, Rs 22.50 crore for working capital, and Rs 1.96 crore towards statutory dues. The state revenue department stands to receive approximately 20.5% of their claims, mirroring the financial creditors' recovery rate.
Lavasa Corp was founded in 2000 by Ajit Gulabchand's HCC to establish India's first privately developed hill city over a 20,000-acre span in the Pune district of Maharashtra. However, the project got entangled in environmental and land acquisition issues, leading to a delay in payments to lenders. As a result, NCLT admitted Lavasa Corp for debt resolution in August 2018 and further approved a consolidated resolution in February 2020.
The endorsement by NCLT of Darwin Platform's revised resolution plan marks a significant stride towards the revitalization of Lavasa Corp. This not only reflects the effective implementation of the Insolvency and Bankruptcy Code but also presents a beacon of hope for the troubled hill city project, setting a precedent for future cases.
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