The National Company Law Tribunal (NCLT) has approved the resolution plan proposed by an affiliate of listed property developer Oberoi Realty to acquire real estate development firm Nirmal Lifestyle Realty.
The resolution plan of Oberoi Constructions involves paying around Rs 273 crore to financial, operational, and other creditors. The company was admitted into the corporate insolvency resolution process (CIRP) in December 2021 with claims amounting to over Rs 748 crore.
As per the order pronounced on Friday, Nirmal Lifestyle Realty’s existing equity shares will be cancelled, effectively reducing its share capital to zero. Oberoi Constructions will then inject Rs 1 lakh into Nirmal Lifestyle Realty by subscribing to new equity shares, thereby gaining full ownership of the company.
A critical aspect of the resolution plan involves obtaining the necessary permissions or clarifications concerning the status of the land parcel owned by Nirmal Lifestyle Realty in the eco-sensitive zone of Sanjay Gandhi National Park in Mumbai suburbs.
The plan stipulates that these permissions must be secured from relevant authorities within 180 days from the date of the NCLT’s approval. If Nirmal Lifestyle Realty fails to obtain these permissions, the resolution plan will be void and Oberoi Constructions will be released from all obligations. In such a case, any deposits or securities provided by Oberoi Constructions will be refunded.
Shyam Kapadia along with Sikha Ginodia and Gaurav Suryavanshi of law firm ANM Global represented the resolution professional Jayesh Sanghrajka in this matter.
The tribunal’s ruling also addresses the ongoing legal proceedings involving Nirmal Lifestyle Realty. It directs the management of claims and benefits from these proceedings to be handled by the committee of creditors (CoC). Oberoi Constructions will not benefit from these proceedings, ensuring that the new management takes over with a clear and unencumbered operational structure.
The NCLT has also mandated that the scheme of arrangement and amalgamation between Nirmal Lifestyle Realty and Oberoi Constructions be filed separately for formal approval. Although elements of this scheme are incorporated into the resolution plan, it must undergo distinct procedural scrutiny.
The ruling also includes provisions for the transfer of records and documents to Oberoi Constructions and the continuation of the monitoring committee. The committee will oversee the resolution process to ensure compliance and smooth transition during the takeover period.
This decision by the NCLT not only addresses the immediate financial distress faced by Nirmal Lifestyle Realty but also sets a precedent for corporate restructuring under the Insolvency and Bankruptcy Code (IBC). By approving the resolution plan, the tribunal emphasises the importance of regulatory adherence and structured resolution processes in managing corporate insolvency.
