MUMBAI: The National Company Law Tribunal (NCLT) in Mumbai has approved the acquisition of bankrupt Satra Properties (India) by a consortium of realty developers MJ Shah Enterprises, MJ Shah Realtors LLP and Centrio Lifespaces under a Rs 184 crore resolution plan.
The tribunal also set aside the erstwhile promoter’s application that alleged undervaluation of the company’s properties by its resolution professional (RP).
The RP had received claims of about Rs 719 crore.
Erstwhile promoter Praful Satra had filed an intervention application against the RP, alleging illegality and undervaluation in the resolution plan.
Advocate Gayatri Mohite, appearing for Praful Satra, raised questions about the valuation of the company’s assets including land in Mumbai’s Kalina and a potential hotel development in Jodhpur. According to her, these properties were grossly undervalued or ignored by merely valuing them at the book value, without accounting for their current market value and future potential.
In his petition, Praful Satra emphasized that the Kalina properties, encumbered with multiple tenants and complex ownership structures, were not fully valued. The Jodhpur property’s valuation did not consider the Rs 50 crore worth of hotel floor space index benefit, he claimed.
Countering this, counsel Pulkit Sharma, appearing for the RP, said the valuation was conducted by reputed firms. All stakeholders, including the committee of creditors, were fully informed and involved in the valuation process, he told the tribunal.
The RP’s counsel said the valuation discrepancies were a result of incomplete data and encroachments on the properties. She mentioned that the Kalina property, for instance, had about 55 tenants occupying over 61,000 sq ft, complicating its valuation.
A division bench of Justice VG Bisht and a technical member Prabhat Kumar, in its late July order, observed that the objections raised by Praful Satra did not merit the dismissal of the resolution plan, especially given the extensive deliberations and majority approval by the CoC.
The bench also noted the RP’s consistent efforts to update and inform all parties involved, including addressing valuation omissions and updating the information memorandum.
The approval provides a structured pathway for Satra Properties‘ financial restructuring and operational revival. The ruling may set a precedent for future cases, particularly concerning the valuation of distressed assets and the rights of stakeholders in insolvency proceedings.
As many as 7,567 companies across sectors were brought into administration under the Insolvency and Bankruptcy Code until March end, according to latest data from the Insolvency and Bankruptcy Board of India. Of these companies, 1,589, or 21%, have been from the real estate sector.
