The National Company Law Tribunal (NCLT) has approved a resolution plan proposed by a property developer’s affiliate to acquire a real estate development firm. The resolution plan involves paying around ?273 crore to financial, operational, and other creditors. The company undergoing acquisition was admitted into the corporate insolvency resolution process (CIRP) in December 2021 with claims amounting to over ?748 crore.

The NCLT has also mandated that the scheme of arrangement and amalgamation between the two companies 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 includes provisions for the transfer of records and documents to the acquiring company and the continuation of the monitoring committee. The committee will oversee the resolution process to ensure compliance and a smooth transition during the takeover period.

This decision by the NCLT addresses the immediate financial distress faced by the target company and 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.

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