NCLT admits Tulip Hotels into insolvency, Real Estate News, ET RealEstate

June 23, 2023

The National Company Law Tribunal (NCLT) has admitted JC Flowers Asset Reconstructions‘ application to initiate insolvency proceedings against Tulip Hotels over defaults of ₹900 crore.

The application was originally filed by Yes Bank, the lender. The debt was subsequently assigned to JC Flowers, which filed a substitution application that was allowed on March 6.

Tulip Hotels had challenged this debt assignment. However, the same was dismissed on March 23.

According to JC Flowers ARC’s counsel Nausher Kohli, the hospitality company had defaulted payment under two guarantees in its capacity as a guarantor for repayment of two loans worth ₹450 crore disbursed by Yes Bank to Cox and Kings, and Ezeego One Travel & Tours each. Both the companies committed breach and default in repayment of debt.

Both the companies committed breach and default in repayment of debt that included principal amount, interest, and other charges thereon, Kohli argued.

Following this default, in August and November 2019, the lender invoked the guarantees issued by Tulip Hotels. However, the hospitality company failed to repay the guaranteed amount.

Tulip Hotels, through an affidavit, had denied these claims stating that it is not related to either Cox and Kings or Ezeego One Travel & Tours, and has not received any funds from Cox and Kings since March 2011 and never been funded by Ezeego One Travel & Tours Ltd.

The petitioner has submitted that Urrshila Kerkar, daughter of Tulip Hotels’ promoter Ajit Kerkar, is the promoter and shareholder of Ezeego One Travel & Tours.

Urrshila also filed an affidavit in reply in the company petition filed by the lender against Ezeego One Travel & Tours. She also holds a power of attorney of Ajay Ajit Peter Kerkar, promoter of Cox and Kings, and has filed the affidavit in reply for Cox & Kings, the petitioner said.

While ordering initiation of insolvency proceedings, the tribunal has stated that it has found the application made by the lender complete in all respects as required by law, and it clearly shows that Tulip Hotels is in default of a debt.

The hospitality company had stated that there are no investments of both the borrowers in Tulip Hotels and there are no cross holdings of Tulip Hotels in any of these entities.

Tulip Hotels had claimed that it was not aware of financial assistance by the lender to these companies and it has not signed any guarantees for these loans while accusing the lender of documents’ fabrication.

It had also said claims for these dues have already been admitted in these borrowers’ currently ongoing insolvency and the lender is attempting to recover the same amount twice over.

  • Published On May 18, 2023 at 07:49 AM IST

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