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NCLT Admits Insolvency Plea Against Parsvnath Landmark Developers

Published on 14 Jan 2019 by Shivi

The National Company Law Tribunal has given its approval to start insolvency proceedings against a subsidiary of realty firm Parsvnath Developers.

It admitted a petition filed by three homebuyers against the subsidiary firm- Parsvnath Landmark Developers- for “inordinate delay” in the development of a project in Delhi and non-refund of their payment.

The tribunal appointed Yash Jeet Basrar as an interim resolution professional to run the corporate insolvency resolution process. A two-member bench of NCLT directed that “in case there is any violation committed by the ex-management or any tainted/illegal transaction by ex-directors or anyone else, the interim resolution professional/resolution professional would be at liberty to make an appropriate application” before it.

The tribunal order came on a petition filed by Alka Agarwal and two others, who had booked flat at La Tropicana project of Parsvnath Landmark Developers at Khyber Pass in Delhi for Rs 10.93 crore.

READ: Treatment Of Homebuyers Under Insolvency And Bankruptcy Code

According to the buyer agreement executed between the parties on October 1, 2009, Parsvnath Landmark Developers was to hand over the possession within 36 months from the date of commencement of construction with a grace period of six months. However, even after more than nine years, construction of the flat has not been commenced.

The counsel for Parsvnath Landmark Developers did not participate in the hearing.

However, in a written submission filed by its authorised representative, it said the application was not maintainable and the delay was on account of various clearances and that the matter of issue of ownership of the land was still pending before the Delhi high court.

It added that in the buyer agreement, it was agreed that the construction of the flat would likely to be completed within 36 months of commencement of construction on receipt of sanction of building plans and all other requisite approvals for construction. It also conceded that the buyers were not financial creditors.

READ: Corporate Insolvency Resolution Process (CIRP) Under IBC, 2016

Rejecting the company's submission, NCLT said, “The amount has been raised from the petitioners/allottees under a real estate project. In such a situation, not only the debt has a commercial effect of borrowings and come within the scope of ‘financial debt’, but also the petitioners are covered by the definition of expression ‘financial creditor’.

Abhishek Kumar, president, Nefowa, said: “More and more buyers are now filing petitions with NCLT because many now just want a refund of their investments with a basic interest rate.

While many buyers had over the past few months been going to the Real Estate Regulatory Authority, the buyers who have been seeking refund has been approaching NCLT because Rera’s efforts are directed more towards facilitating completion of the projects.”


Tags: Insolvency And Bankruptcy 

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