FCC

SBI's plea against Lavasa resolution accepted by NCLAT

2023-11-27

The insolvency process of the bankrupt Lavasa Corporation took a different direction as the principal bench of the National Company Law Appellate Tribunal (NCLAT) granted permission to a State Bank of India (SBI) petition. The SBI petition aimed to overturn the lower court's approval of the resolution plan submitted by Darwin Platform Infrastructure (DPIL).

The development marks the second objection from a bank regarding the resolution of Lavasa Corporation's loan default, a project considered the first private hill town initiative since Independence. This objection arises nearly two years after creditors overwhelmingly approved the plan in December 2021 and several months after the NCLT granted its approval in July of the current year.

In the petition, the SBI sought to invalidate the NCLT order and argued that DPIL did not adhere to the waterfall mechanism outlined in the Insolvency and Bankruptcy Code (IBC). This mechanism does not recognise government dues as secured creditors. Representing the SBI, former Attorney General of India KK Venugopal requested condonation of the delay in filing the appeal.