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The National Company Law Tribunal (NCLT) has upheld the charge held by Piramal Capital & Housing Finance on Radius Estate Projects' development located on a 5.4-acre site in Santacruz, Mumbai. This ruling clarifies the financial obligations associated with the Avenue 54 project and resolves a dispute between creditors, including J.C. Flowers Asset Reconstruction and Piramal Capital.The legal battle centered on Radius Estate Projects, formerly Vishwaroop Realtors, which had initially secured Rs 7 billion in loans backed by mortgages on the project's land. These loans were obtained through a series of agreements with financial institutions.In 2016, Radius Estate Projects executed a mortgage deed in favor of IDBI Trusteeship for a term loan from Yes Bank, which was later transferred to J.C. Flowers Asset Reconstruction. Additional loans increased the total to Rs 7 billion. By 2018, Diwan Housing Finance Limited (DHFL), later acquired by Piramal, provided a project loan totalling Rs 20 billion to Sumer Radius Realty, a subsidiary of Radius Estate Projects.Disputes emerged when Sumer Radius Realty and other joint entities defaulted on their loan repayments. A mortgage was subsequently created in favour of DHFL without the necessary No Objection Certificate (NOC) from Yes Bank, leading to claims by J.C. Flowers that the subsequent charges were invalid and should exclude Piramal as a financial creditor.The NCLT reviewed the case and ruled in favour of Piramal Capital & Housing Finance, affirming that while the initial NOC was conditional and later revoked, the subsequent mortgages and financial arrangements by DHFL/Piramal were valid. The tribunal found J.C. Flowers' claims to invalidate these charges unfounded.The decision reinforces Piramal's position as a major financial creditor with legitimate claims over the Avenue 54 project's assets. It also highlights the importance of adhering to proper procedures in financial agreements and securing necessary approvals for mortgages.In June 2023, Piramal Capital & Housing sold a Rs 36.56 billion bad loans portfolio, including those related to the Radius Estate Project, to Omkara ARC. This ruling has significant implications for the stakeholders, securing Piramal's financial interests and providing clarity on the legal standing of Radius Estate Projects' financial obligations.(ET)