The National Company Law Tribunal (NCLT) has sanctioned the acquisition of Nirmal Lifestyle Realty by Oberoi Realty’s affiliate, Oberoi Constructions. This decision marks a pivotal moment in the ongoing corporate insolvency resolution process (CIRP) for Nirmal Lifestyle Realty, which has been grappling with severe financial distress since its admission into CIRP in December 2021.
Oberoi Constructions’ resolution plan involves a substantial financial commitment, offering approximately Rs273 crore to settle claims from financial, operational, and other creditors. Nirmal Lifestyle Realty, which had accumulated claims exceeding Rs748 crore, will see its existing equity shares cancelled under this plan, effectively nullifying its previous share capital. Following this, Oberoi Constructions will infuse Rs1 lakh into the company by subscribing to new equity shares, thereby gaining complete ownership. A critical component of this resolution is the acquisition of necessary approvals for a land parcel located in the eco-sensitive zone of Sanjay Gandhi National Park, Mumbai. The resolution plan mandates that Oberoi Constructions secure these permissions within 180 days from the NCLT’s order. Failure to obtain these approvals would render the resolution plan void, releasing Oberoi Constructions from any further obligations and ensuring the return of any deposits or securities provided.
The tribunal’s ruling also addresses ongoing legal disputes involving Nirmal Lifestyle Realty, stipulating that the management of claims and benefits from these proceedings be overseen by the committee of creditors (CoC). Oberoi Constructions will not benefit from these proceedings, allowing the new management to assume control with a clear operational mandate. Additionally, the NCLT has required that the scheme of arrangement and amalgamation between Nirmal Lifestyle Realty and Oberoi Constructions be filed separately for formal approval. This ensures that while the resolution plan integrates key elements of the scheme, it undergoes distinct procedural scrutiny.
The decision underscores the NCLT’s commitment to structured resolution processes under the Insolvency and Bankruptcy Code (IBC), highlighting the importance of regulatory compliance and effective corporate restructuring. The approval not only addresses Nirmal Lifestyle Realty’s immediate financial challenges but also sets a precedent for future corporate resolutions in India’s real estate sector.
