According to legal sources familiar with the matter, IIFL AMC, an asset management firm, has filed a corporate insolvency application with the National Company Law Tribunal (NCLT), New Delhi against Noida-based developer Shipra Estates Ltd., promoted by Mohit Singh, for defaulting on a loan worth Rs. 315 crore.
The financial creditor, IIFL AMC, had supplied credit by subscribing to Shipra Estates' non-convertible debentures in 2015.
As to the plea filed before the NCLT bench dated 5 August 2021, ‘there has been a request to the Adjudicating Authority, NCLT, New Delhi bench to begin corporate insolvency resolution procedure in the issue of Shipra Estates Ltd. under Section 7, of the Insolvency and Bankruptcy Code 2016.’
The next hearing date is scheduled for later this month. According to the sources, the corporate debtor, IDBI Trusteeship Services Ltd, Mohit Singh, and IIFL Real Estate Fund (Domestic) Services entered into an investment agreement on 28 September 2015 to sanction an amount of Rs. 272 crore to the corporate debtor by way of fully serviced, redeemable, unlisted, non-convertible debentures with a face value of Rs.1 crore aggregated to Rs.272 crore.
Shipra Estates has been dragged to bankruptcy court by IIFL AMC and IDBI Trustee.
According to sources close to the situation, the total amount of debt in default by the corporate debtor under the investment agreement as of 2 August 2021 is Rs. 315 crore. According to sources, the financial creditor has suggested Nishant Gupta as the Interim Resolution Professional.
The financial creditor had provided funds based on the mortgage of big plots of land in Lucknow and Chandigarh. However, in the last five years, the developer has made little progress in developing the property parcel in order to monetise it. The financial creditor announced an event of default under the Debenture Trust Deed and Investment Agreement in September 2019 due to a failure to pay principal and interest. According to sources, Mohit Singh's personal guarantee is also used to secure the credit facility.
IIFL confirmed that it has filed the application before NCLT. A response from Shipra Estates is awaited.
According to media sources, Indiabulls issued a notice to Shipra Estate and Mohit Singh in December 2020, requesting repayment of Rs. 1763 crore in outstanding dues under Section 95 of the Insolvency and Bankruptcy Code, 2016.
The Allahabad High Court expressed concerns in January 2021 about Shipra Estates' "hostile and arbitrary conduct" in their Shipra Shrishti project in Lucknow. According to sources, the Noida Authority revoked the award of an Rs. 1000 crore property to Shipra Estates in July 2017 after the builder failed to pay the land due instalments. In February 2021, The Ghaziabad Municipal Corporation had sealed the Shipra Mall over non-payment of property tax amounting to Rs. 2.22 crore.
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