Authority: National Company Law Appellate Tribunal, Chennai Bench (Justice N. Seshasayee - Member (Judicial) and Jatindranath Swain - Member (Technical))

Order Date: 14 August 2026

Case Overview

The twin appeals (Company Appeal (AT) (CH) (Ins) No.400/2026 and 404/2026) were filed by Virgo Properties Pvt Ltd and Virgo Realtors Pvt Ltd, two real estate companies promoted by the same family of promoters, against Phoenix ARC Ltd and another respondent. The dispute originates from a loan facility sanctioned by L&T Housing Finance (LTHFL) on 15 June 2017 for ₹107 crores to both companies collectively.

According to the financier, the loan was disbursed in multiple stages between 30 June 2017 and 2021, with approximately ₹56 crores advanced to Virgo Properties Pvt Ltd and about ₹44.7 crores to Virgo Realtors Pvt Ltd (though appellants claim only ₹98 crores was actually advanced). Virgo Realtors sold one secured asset with LTHFL's assent for approximately ₹60 crores and applied part proceeds to the loan account. The appellants claim total repayments of ₹134 crores.

On 29 March 2019, LTHFL assigned its debt component (but not security) to its sister concern LTFL through a document executed in Punjab. Following default in interest payments, LTFL issued notices on 26 August 2019 and 3 September 2019. On 19 March 2021, LTHFL and LTFL merged pursuant to an NCLT Kolkata Bench order.

LTFL issued a notice on 29 October 2021 commencing arbitral proceedings under Section 21 of the Arbitration and Conciliation Act, 1996, and declared the loan account as NPA on 13 November 2021. The arbitration involved appellants claiming approximately ₹23 crores from LTFL, which counterclaimed ₹34 crores. Subsequently, LTFL assigned the debt to the respondent (Phoenix ARC Ltd), which initiated Section 7 proceedings under I&B Code, 2016. During pendency, the debt was assigned to Phoenix ARC Ltd.

Final Outcome

The NCLAT bench, after hearing arguments from Mr. R. Sankaranarayanan (senior counsel for Virgo Properties) and noting time constraints (as one member was required for a special bench), ordered the Resolution Professional to maintain status quo as of 14 August 2026. The matter was adjourned and listed for further hearing on 24 August 2026 to also hear arguments from Mr. T.K. Bhaskar (counsel for Virgo Realtors).

Topics: Insolvency Proceedings, Debt Assignment, Real Estate Finance