Relief for Mahagun: NCLAT Sets Aside Insolvency Proceedings, Orders Fresh Hearing

The National Company Law Appellate Tribunal (NCLAT) has delivered a significant ruling for Mahagun Realty, overturning an insolvency order initially granted by the National Company Law Tribunal (NCLT). This order allows for a new hearing on the petition, considering fresh status reports on the company's real estate projects.

The NCLAT's decision was influenced by earlier directives from the Supreme Court, highlighting the need for project-specific insolvency in real estate cases, as noted in the Mansi Brar Fernandes case. The tribunal acknowledged the interventions filed by various homebuyers, as well as Aditya Birla Capital, who holds financial interests in Mahagun's projects.

This development follows a prior NCLT ruling allowing an insolvency plea from IDBI Trusteeship Services against Mahagun concerning a substantial financial default. The NCLAT's current directive mandates a reconsideration, and Mahagun has been given a week to submit a detailed response to the insolvency plea. The case is set for a new hearing in two weeks.