The Mumbai bench of the national company law tribunal (NCLT) removed Darwin Platform Infrastructure Ltd, the successful resolution applicant (SRA) of Lavasa Corporation Ltd (corporate debtor-CD), from the corporate insolvency resolution process (CIRP) for failing to implement the resolution plan. While restoring the CIRP for Lavasa under the Insolvency and Bankruptcy Code (IBC) with Shailesh Verma as resolution professional (RP), the bench dissolved the monitoring committee with immediate effect. In May this year,
Moneylife reported how things are not well for Ajay Harinath Singh, founder of the Darwin Platform group of companies, who claims lineage to the Ikshavaku clan and a single-line blood descendant of Bhagwan Ram's son, Lava.
While dismissing the intervention application (IA) filed by Darwin Platform, the bench of Kuldip Kumar Kareer (member judicial) and Anil Raj Chellan (member technical) says, "...the CIRP of the CD (Lavasa) is restored with Shailesh Verma as RP in charge of the CD. The period from 13 July 2021, i.e. from the date of submission of the plan by the resolution applicant (Darwin Platform) till 3 January 2022, i.e. the date of filing IA No. 52 of 2022, i.e. the plan approval application shall stand excluded, having been rendered redundant owing to the failure of the SRA in the implementation of the resolution plan. Under the circumstances, the monitoring committee shall stand dissolved with immediate effect."
Darwin Platform's bid of Rs1,814 crore was to be paid over eight years to lenders, along with the delivery of fully constructed houses to 837 home-buyers at a haircut of over 60% (who were unhappy about being short-changed in the resolution). Darwin Platform was to make a down payment of Rs92.50 crore for working capital to keep Lavasa running. It did not pay the money.
Aggrieved by the default in the implementation of the resolution plan approved by NCLT, Union Bank of India, a secured creditor, and on behalf of the secured financial creditors of Lavasa also filed an IA. Union Bank submitted that due to the non-infusion of funds, the lender banks were forced and constrained (to maintain the CD) to infuse money into Lavasa. Accordingly, at the meeting, 62.73% of the lender banks agreed that the performance bank guarantee (PBG) submitted by DPIL should be invoked and encashed. Subsequently, ARCIL also indicated their approval for the invocation of the PBG of Rs25 crore, so there was a consensus of 73.65% of the lender banks in favour of the invocation of PBG.
The NCLT bench observed that Darwin Platform not only failed to make the upfront payment as required under the approved resolution plan but also failed to take any real steps even after the dismissal of appeals by the national company law appellate tribunal (NCLAT) on 10 January 2024 while hearing an appeal filed by Union Bank and on 13 February 2024 while hearing the appeal filed by State Bank of India (SBI).
"The PBG was invoked by Union Bank on 8 April 2024, i.e., many days after the rejection of the appeals. This clearly demonstrates that the Darwin Platform was never ready to implement the plan and was only making excuses to somehow save the PBG amount. In the light of the discussion, we have no hesitation in holding that Darwin Platform has starkly contributed to the failure of implementation of the approved resolution plan in accordance with the terms of the approved resolution plan. Consequently, Union Bank has rightly invoked and encashed the PBG furnished for by Darwin Platform, and the proceeds thereof can be used for the purposes as decided by CoC," NCLT says.
As per the approved resolution plan, Darwin Platform was required to make an upfront payment of Rs100 crore within 90 days from the effective date, the date of approval of the resolution plan, and receipt of a copy of the order and a payment of the further amount of Rs50 crore within nine months from the effective date.
A group of more than 500 home-buyers in Lavasa had filed an appeal alleging serious irregularities in Lavasa's resolution plan. It included fudging of figures and misrepresentation of facts, which comprises fudging of net-worth, share capital and long-term liability figures, misrepresentation in the valuation of shares and inconsistencies in filings with the Union ministry of corporate affairs (MCA).
NCLT also dismissed IA filed by employees of Lavasa, stating that the applicants lack the locus and there is no question of considering their apprehensions.
Earlier in March, the enforcement directorate (ED) descended upon the Darwin Platform group, conducting raids across nine locations in Delhi, Mumbai and Goa, seizing cash worth around Rs78 lakh, incriminating documents and foreign currency of Rs2 lakh from the residence of Ajay Harinath Singh and his associates.
The ED alleges the transfer of nearly Rs18 crore through layered transactions involving multiple accounts linked to the Darwin group and personal accounts of the Singh family and associates. The Darwin group also stands accused of being the primary beneficiary of funds routed through Dlehman Rea-IT Trade Pvt Ltd, adding weight to the money laundering charge. (
Read: Lavasa's Fate Hangs in the Balance with Darwin's Financial Troubles)
As reported by Moneylife, Mr Singh claims that the Darwin Platform group of companies is in the business of refineries, infrastructure, automobiles, defence, pharmaceuticals, airlines, electric vehicles, banking, finance and media – but has seldom mentioned that the group's primary source of income is multi-level marketing (MLM) or collective investment schemes (CIS).
In fact, Darwin Platform Refineries, which is ostensibly its 'refinery business', is also into direct sales that resemble MLM or Ponzi business modules.
