Authority: National Company Law Tribunal, Division Bench (Court-I) Chennai

Order Date: 07 July 2026

Case Overview

The National Company Law Tribunal (NCLT) Chennai bench, comprising Member (Judicial) Shri Sanjiv Jain and Member (Technical) Shri Venkataraman Subramaniam, heard an insolvency petition filed under Section 7 Rule 4 of the Insolvency and Bankruptcy Code, 2016. The petition CP(IB)/71(CHE)2022 was filed by M/s Phoenix ARC Pvt Ltd (in its capacity as Trustee of Phoenix Trust FY22-16) against the corporate debtor M/s Virgo Realtors Pvt Ltd.

During the hearing, only the petitioner's counsel Shri Dhakshin Kumar was present, with no representation for the respondents. The tribunal raised several substantive questions regarding financial transactions and accounting practices. Specifically, the bench sought clarification on why default amounts were different in the petitions despite the companies being jointly and severally liable as co-borrowers per the loan agreement.

The tribunal directed specific inquiries about three major asset disposals: a land sale on 05 February 2018 for ₹6.158 crore, another land sale on 29 September 2018 for ₹6.0 crore, and ₹60.0 crore received from Kauvery Hospital. The bench demanded detailed accounting of how these transactions were treated, including corresponding entries in statement of accounts with dates. Additionally, the tribunal questioned why Phoenix ARC received a specific payment of ₹2,37,17,410 from the sale proceeds obtained from Kauvery Hospital.

For the respondents, the tribunal ordered disclosure of how many projects the corporate debtor has undertaken and required copies of audited balance sheets from 2019 till date.

Final Outcome

The NCLT granted one week for both parties to provide the requested information. The matter has been adjourned and both connected petitions (CP/28/2022 and CP/71/2022) are listed for physical hearing on 16 July 2026. The order does not constitute a final decision but represents interim directions for obtaining financial clarifications before proceeding with the insolvency petition.

Topics: Insolvency Proceedings, Financial Accountability, Asset Reconstruction