The applicant, the resolution professional, was represented by Advocate Shyam Kapadia, Advocate Shikha Ginodia and Advocate Gaurav Suryavanshi, instructed by ANM Global.
In a landmark judgement, the National Company Law Tribunal (NCLT) has approved the resolution plan of Nirmal Lifestyle Realty Private Limited, bringing a ray of hope to workers who have been waiting for payment for over two decades. The corporate debtor was a real estate company that held development rights to 20,262.40 sq. metres of land in Mulund. The resolution, spearheaded by Oberoi Constructions Limited, has been fraught with challenges but promises to finally address long-standing financial claims, including those of the company's workers.
Nirmal Lifestyle Realty, once a major player in Mumbai's real estate market, was dragged into the Corporate Insolvency Resolution Process (CIRP) on December 6, 2021. The company's financial woes had been simmering for years, eventually leading to its financial creditor, Aasan Corporate Solutions Private Limited, 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 with all creditors, with a special focus on ensuring that the workers ultimately receive their fair compensation. The total admitted claims amount to Rs 7,484 crore and the resolution plan proposes to pay Rs 2,730 crore.
The application for approval of the resolution plan faced a multi-front litigation involving the workers, promoters, former directors and EPFO authorities. The impugned IA was argued at length and various precedents, including the Jet Airways judgment on workers' severance pay claims, were discussed in detail.
The Tribunal, after considering each of these impugned IAs, approved the Resolution Plan and as per its directions, dealt with all aspects in detail. The Tribunal further emphasised that as decided in Jet Airways case, the workmen need to be paid their severance pay and PF claims but at the same time observed that the Resolution Plan provides the workmen much more than their entitlements under the Code, including their right to wages, severance pay and PF, and therefore, the Resolution Plan is in due compliance with the Code.
The approval of Nirmal Lifestyle Realty's resolution plan marks a significant milestone in resolving the company's long-standing financial woes. For the workers, it marks the end of a two-decade-long battle for justice and fair compensation. With Oberoi Realty now involved, the success of the plan will be crucial in establishing a precedent for future insolvency cases in India, especially those involving long-standing unresolved workers' claims.
The applicant, the resolution professional, was represented by Advocate Shyam Kapadia, Advocate Shikha Ginodia and Advocate Gaurav Suryavanshi instructed by ANM Global.
