NCLT Approves Mantra Properties' Acquisition of Mulund Project

The National Company Law Tribunal (NCLT) in Mumbai has approved Pune-based Mantra Properties' acquisition of one of the projects of Nirmal Lifestyle, located in the eastern suburb of Mulund. The project, which covers approximately four acres, was launched by Nirmal Developers in 2017 and has a total development potential of nearly Rs 1,900 crore.

The company had admitted liabilities of Rs 1,491 crore, and the bidder, Mantra Properties, proposed a resolution plan with an offer of Rs 215 crore. The approval of the resolution plan ensures that all existing consents, approvals, licences, and authorizations granted to the corporate debtor will remain valid.

The project entered the corporate insolvency resolution process (CIRP) in July 2023 following a plea by Beacon Trusteeship Ltd. The two secured creditors in this process are Beacon Trusteeship with Rs 902 crore and a 60.54% share of the committee of creditors, and Assets Care and Reconstruction Enterprise Ltd with Rs 589 crore and a 39.46% share.

Rohit Gupta, Managing Director of Mantra Group, stated, 'We will complete the Mulund project and address the interests of existing homebuyers. This marks our second project in Mumbai, after the acquisition of an 8.5-acre project in Jogeshwari.'

Around 15 real estate developers had shown interest in the project, and the resolution professional had received three final resolution plans. The successful bidder, Mantra Properties and Developers, competed against Vasavi Realty and Sardarmal Prithviraj Constructions, in consortium with Dharmesh Sardarmal Jain, the former promoter of the corporate debtor.

Ruchi Khatlawala, a partner at law firm Little & Co, noted that developers are always interested in acquiring brownfield real estate firms with good land parcels in Mumbai. 'When a company is under the CIRP, the process of due diligence for their books, land records, and lease agreements is much easier to conduct, making such cases particularly attractive to developers,' she explained.

The Mulund project was planned with four towers spanning 754,000 sq ft, of which 114,000 sq ft had already been sold to 235 buyers. These buyers had paid Rs 50 crore against homes worth Rs 230 crore.