NCLT Mumbai Admits Insolvency Plea Against Reliance Ornatus Over ₹133.88 Crore Default

The National Company Law Tribunal (NCLT), Mumbai has admitted an insolvency application filed by Creative Ashtech Engineering Projects Private Limited against Reliance Ornatus Enterprises and Ventures Private Limited Ventures Private Limited, holding that a financial debt of Rs. 133.88 crore and default stood established.

A bench of Judicial Member Nilesh Sharma and Technical Member Sameer Kakar held,

“In view of the aforesaid findings, this Application bearing C.P. (IB) No. 176/MB/2025 filed under Section 7 of IBC, 2016, by Creative Ashtech Engineering Projects Private Limited, the Applicant (FC) for initiating CIRP in respect of ROEVPL Ventures Private Limited, the CD, is admitted.”

The dispute traces back to March 15, 2018, when AAA Vibgyor Entertainment Private Limited issued 11,10,000 zero coupon compulsorily convertible debentures aggregating to Rs. 111 crore.

Edico Ventures Private Limited initially subscribed to the debentures, and Creative Ashtech later stepped into the shoes of the subscriber pursuant to a Framework Agreement.

Between January and June 2023, pledged shares were enforced, and Rs. 66.05 crore was recovered, reducing the principal outstanding to Rs. 44.94 crore. The debentures were subsequently restructured as optionally convertible debentures (OCDs).

To secure repayment, Reliance Ornatus Enterprises and Ventures Private Limited executed a corporate guarantee dated June 15, 2023 in favour of the financial creditor. The guarantor later changed its name to ROEVPL Ventures Private Limited on November 30, 2023. After successive extensions, the final redemption date was fixed as September 30, 2024. Upon failure to redeem the debentures, demand notices were issued in October 2024 invoking the guarantee.

Rejecting the guarantor's contention that the liability was contingent due to the conversion feature, the tribunal held, "The original conversion date of 30.03.2023 was consciously deferred by mutual agreement owing to the impending amalgamation, and the parties thereafter expressly novated the contractual terms by restructuring the instrument as OCDs with a fixed and determinable redemption obligation.”

It noted that the option to convert vested solely with the creditor and, in the absence of its exercise, redemption was mandatory.

Finding that debt and default were established, on September 30, 2024, the tribunal declared a moratorium under Section 14 of the Insolvency and Bankruptcy Code, appointed NPV Insolvency Professionals Pvt Ltd as the interim resolution professional, and directed the financial creditor to deposit Rs. 3 lakh towards initial CIRP costs