NCLAT dismisses home buyers’ insolvency plea against Ansal Properties
The National Company Law Appellate Tribunal (NCLAT) has set aside an order of Delhi Bench of NCLT to initiate insolvency proceeding against Real Estate firm Ansal Properties and Infrastructure Limited.
In its order dated 14th August 2020, the NCLAT said that the Delhi Bench of the NCLT has made a grave error in allowing insolvency proceedings against the real estate firm.
And by virtue of NCLAT’s judgement, the order passed by the NCLT to appoint ‘Interim Resolution Professional’, declaring moratorium, freezing of account, and all other order and action, if any, taken by the ‘Interim Resolution Professional’, including the advertisement, if any, published in the newspaper calling for applications all such orders and actions are declared illegal and are set aside.
The insolvency proceeding against Ansal Properties was were brought about by two home buyers — Ashok Tripathi and Saurabh Tripathi – who had bought flats under a Asal Properties’ real estate project Sushant Golf City at High Tech Township’, Sector-P, Sultanpur Road, Lucknow.
The two buyers had made advance payment of Rs 10 lakh in 2014 for booking flats. The real estate firm had promised to deliver the flats in two and three years, respectively. The project start date was notified as 22 September 2015 and the realtor was required to deliver the project by September 2017 and September 2018.
However, even after five years, Anal Properties neither completed the construction of these units nor refunded the amount to the allottees.
Following this, the two home buyers moved Uttar Pradesh Real Estate Regulatory Authority (UP RERA) and got recovery certificate of Rs 73.35 lakh issued on 10 August 2019.
With the recovery certificate in hand, the two home buyers then moved to NCLT initiating insolvency proceeding against the real estate company. The allottees had approached the NCLT in the capacity of decree-holder against the default of the financial debt committed by the Corporate Debtor on account of the non-payment of the principal amount along with penalty as decreed by UP RERA through orders dated 16 November 2017 and 13 December 2018, besides recovery certificate dated 10 August 2019.
The NCLAT observed that the main intention of the home buyers to move NCLT initiating insolvency proceeding against the realtor was to put pressure for realizing the Rs 73.35-lakh recovery certificate and nothing else.
It also said that the two home buyers can no longer claim to be allottees after the issuance of recovery certificate by UP RERA. NCLAT also questioned treating them as financial creditor. It observed that a “decree-holder, though included in the definition of creditor, does not fall within the definition of financial creditor and cannot seek initiation of corporate insolvency resolution process as financial creditor.
