In a landmark decision, the National Company Law Tribunal (NCLT) has approved the resolution plan for Nirmal Lifestyle Realty Private Limited, bringing a glimmer of hope to workmen’s who have been waiting over two decades to receive their dues. The Corporate Debtor was a real estate company having development rights of 20,262.40 sq mts of land in Mulund.
The resolution, spearheaded by Oberoi Constructions Limited, was fraught with challenges but ultimately promises to address long-standing financial claims, including those of the company’s workmen.
Nirmal Lifestyle Realty, once a key player in Mumbai’s real estate market, was dragged into the Corporate Insolvency Resolution Process (CIRP) on December 6, 2021. The company’s financial troubles had been simmering for years, with Aasan Corporate Solutions Private Limited, a financial creditor, eventually filing an application under Section 7 of the Insolvency and Bankruptcy Code (IBC).
The resolution plan submitted by Oberoi Constructions was approved by the CoC on September 1, 2022. The plan includes a comprehensive settlement for all creditors, with a particular focus on ensuring that the workmen finally receive their dues. The total claims admitted amounted to ₹748.40 crores, with the resolution plan proposing a payment of ₹273 crores.
The Application for approval of Resolution Plan was faced with multi facet litigations including by workmen, promoters, ex-directors and epfo authorities. The objection IA’s were argued at length and various precedents were discussed in detail including the jet airways judgment for workmen’s gratuity claims.
After navigating through each of these objections IAs, the Hon’ble Tribunal approved the Resolution Plan and, in its order, dealt with each and every aspect in detail. The Hon’ble Tribunal further emphasised that the workmen need to be paid the gratuity and pf claims as decided in jet airways matter but at the same time, the Hon’ble Tribunal also recognised that the Resolution Plan already provides to workmen much more than their entitlement under the Code including their entitlement towards wages, gratuity and PF and hence the Resolution Plan is in due compliance of the Code.
The approval of the resolution plan for Nirmal Lifestyle Realty is a significant milestone in resolving the company’s long-standing financial troubles. For the workers, it marks the end of a 20-year battle for justice and fair compensation. As Oberoi Realty steps in, the successful implementation of the plan will be crucial in setting a precedent for future insolvency cases in India, particularly those involving long-pending workmen claims.
The Applicant, Resolution Professional was represented by Counsel Mr. Shyam Kapadia along with Advocate Ms. Shikha Ginodia and Advocate Mr. Gaurav Suryavanshi instructed by ANM Global.