Synopsis
The National Company Law Appellate Tribunal has rejected Raheja Developers' request to end insolvency proceedings for its Raheja Shilas project. The tribunal noted that issues with flat buyers remain unresolved. An application to withdraw the insolvency process can only be filed after all disputes are settled.
New Delhi: The National Company Law Appellate Tribunal (NCLAT) has declined Raheja Developers' plea to close the insolvency resolution process against its project Raheja Shilas in Gurugram, after observing that the issues with flat buyers have not been resolved.
It further said an application under Section 12A of Insolvency and Bankruptcy Code (IBC) for withdrawal of CIRP can be filed only after issues between the flat buyers and the realty firm are "resolved and any settlement is entered". It shall be open for the flat buyers to file an application under Section 12A.
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"Respondent Nos.1 to 43 (flat buyers) have objected to the closure of the CIRP, who have initiated the proceedings. We are of the view that no order can be passed in this appeal for closing the CIRP," said an NCLAT bench comprising Chairperson Justice Ashok Bhushan and Barun Mitra, Member (Technical).
Counsel representing Navin Raheja, CMD of Raheja Developers had submitted that the corporate insolvency resolution process (CIRP) needs to be closed as the respondents have been handed over the possession of the flats.
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It further submitted that the respondents have already obtained the occupancy certificate, and after making all necessary payments, no issues are left to be determined.
However, NCLAT in its final order on March 20 said: "We have already noted the submissions of learned Counsel appearing for Respondent Nos.1 to 43, who has contended that issues have not been fully solved, and a large number of issues pending with the corporate debtor (CD), are unresolved."
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NCLAT's final direction came over a petition filed by Navin, Chairman & Managing Director of the suspended board of Raheja Developers, challenging an order of New Delhi-based Principal Bench of National Company Law Tribunal (NCLT), which had on November 19, 2024 directed to initiate CIRP against the realty firm.
However, in November 2024, NCLAT passed an interim order confining the CIRP to the project Raheja Shilas, located at Sector 109, Gurugram, Haryana. Over 40 flat buyers have claimed a default by Raheja Developers.
"The order dated November 19, 2024 passed by NCLT... is modified to the extent that CIRP against the CD shall confine to its project Raheja Shilas (Low Rise) only," said NCLAT in its final order.
It has directed the Resolution Professional to proceed further in the CIRP including updation of the creditors claim in accordance with law.
Regarding other projects, NCLAT said they may prosecute independently in a separate petition.
"The Financial Creditors in a class and Financial Institutions with respect to other projects of the CD, are free to prosecute their independent proceedings against other projects of the CD, which shall proceed in accordance with law, unaffected by initiation of CIRP by the impugned order with respect to project Raheja Shilas," it said.
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