The National Company Law Appellate Tribunal (NCLAT) has stayed the formation of the committee of creditors of real estate firm Ananda Divine Developers which is facing insolvency proceedings. Ananda Divine Developers is one of the companies of the Noida-based ATS group.

Earlier on March 25, the Delhi bench of the National Company Law Tribunal (NCLT) had initiated insolvency proceedings against Ananda Divine Developers over a plea filed by ICICI Prudential Venture, claiming a due of Rs 25 crore. NCLT had also appointed an interim resolution professional to take over the management while suspending the board of Ananda Divine Developers.

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This order was challenged by Ananda Divine Developers before the appellate tribunal NCLAT. A three-member NCLAT bench on Monday issued a notice directing ICICI Prudential Venture to file the reply within two weeks.

"In the meantime, in pursuance of the impugned order dated 25th March 2022, the CoC (Committee of Creditors) shall not be constituted," said the NCLAT bench headed by Chairperson Justice Ashok Bhushan. The appellate tribunal has listed the matter on May 11 for the next hearing.

The formation of CoC is an important step under IBC (Insolvency & Bankruptcy Code). Once the NCLT initiates Corporate Insolvency Resolution Process (CIRP) against a debt-ridden firm, it appoints an Interim Resolution Professional (IRP) after suspending the board of the firm.

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Article 18 of IBC mandates that it is the duty of the IRP to constitute the committee based on all the claims received against the corporate debtor and the determination of the financial position of the corporate debtor. It shall consist of those financial creditors whose claims have been received within the stipulated time of 19 days.

As per section 24(6) of the IBC, each creditor shall vote in accordance with the voting share assigned to it based on financial debts owed to such creditor and select a resolution plan. Earlier, ATS group had said that it has resolved the dispute with ICICI Prudential Venture and would file a settlement soon.

"We have mutually closed this dispute with ICICI Prudential Venture and will be filing a settlement soon," ATS Group CMD Getamber Anand had said. In its 20-page order, the NCLT had observed that the realty firm is liable to pay ICICI Prudential Venture, the financial creditor, a total of Rs 25.46 crore as of November 20, 2020, which includes the default IRR (Internal Rate of Return).