As per the bankruptcy regulation, the lenders and the resolution professional are expected to complete the resolution process within a total of 270 days, failing which the Mumbai-based company will undergo mandatory liquidation.
With this exclusion, the company’s liquidation is likely to be deferred as the court has granted additional about two and a half years to complete the resolution process.
The bankruptcy court usually provides exclusion to companies under insolvency on a case-to-case basis and in this instance, the decision was taken following a plea from its interim resolution professional (IRP).
The tribunal had originally admitted the company for insolvency process based on an application filed by healthcare company USV after the developer defaulted on its dues in 2019. The firm has admitted liabilities worth over Rs 621 crore.
The resolution professional was appointed in June 2019. However, after 15 days, the National Company Law Appellate Tribunal (NCLAT) directed the (IRP) not to constitute a Committee of Creditors (COC). This interim order was vacated by the NCLAT in August 2019. The tribunal, in December 2012, had granted an exclusion of 270 days from the CIRP period.Through its application, the RP had urged the tribunal that the entire period lost in litigation, which began at the behest of an ex-director, should be excluded.Started in 1986, Lok Housing and Constructions was the flagship company of the Lok Group of Companies founded in 1982. The company’s real estate and construction portfolio included both residential and commercial projects. It was also engaged in construction of railway quarters, railway bridges and slum rehabilitation projects through its associate companies.
The group has developed several housing complexes in the suburbs of Mumbai including Khar, Andheri, Vikhroli and Mulund, and outside Mumbai in Thane, Kalyan and Ambernath. As of data available until 2012, the company had a land bank of more than 650 acres in Turbhe, Ambernath, Kalyan, Vasai, Pune, and Bengaluru.
A total of 7,058 companies across sectors were brought into administration until September-end, according to latest data from the Insolvency & Bankruptcy Board of India (IBBI).
Of these, around 21% or 1,482 companies were from the real estate sector, and out of these around 1,059 companies have seen a successful resolution plan since the inception of the Insolvency & Bankruptcy Code (IBC) in 2016.
