Creditors to Lavasa Corp invoked the Rs.250 million performance bank guarantee (PGB) by Darwin Platform Infrastructure (DPIL), citing non-compliance of the corporate insolvency resolution process (CIRP) timeline.

This came nine months after the National Company Law Tribunal (NCLT) approved the transaction. Invocation of the guarantee means the monitoring committee to implement the plan has now been dissolved and the CIRP process has been halted, putting the decision on the future of the private hill town project back before the NCLT.

The lenders took a decision to invoke the guarantee as there was no movement on completion of the deal from Darwin. The upfront payment of Rs.1 billion had to come within 90 days from NCLT order, which came in July, which is long overdue.

Lead lender Union Bank has expressed its no confidence in the resolution applicant, so this was a logical move. Lead lender Union Bank of India had sought withdrawal of NCLT approval alleging connivance between the resolution professional (RP) Shailesh Verma and DPIL to undervalue the real estate assets of Lavasa, resulting in a loss to creditors of the company.