NCLT approves Rs 28.38-crore resolution plan Sarv Awas Housing Bhiwadi, offers homebuyers possession or refund

The National Company Law Tribunal (NCLT) has approved a Rs 28.38-crore resolution plan submitted by the Consortium of Rawal Ram and Sanjeev Chadha for a stalled real estate project of Sarv Awas Housing Bhiwadi Private Limited, paving the way for completion of the development and providing relief to hundreds of homebuyers after nearly four years of insolvency proceedings.

The Chandigarh Bench approved the resolution plan after noting that it had received 100% approval from the Committee of Creditors (CoC) and complied with the provisions of the Insolvency and Bankruptcy Code (IBC). The tribunal also approved multiple addendums to the plan that enhanced payouts to certain categories of creditors, including homebuyers who had paid token booking amounts and statutory authorities.

The approved resolution plan for Sarv Awas Housing Bhiwadi Private Limited envisages a total financial outlay of Rs 28.38 crore, significantly higher than the project’s revised fair value of Rs 21.02 crore and liquidation value of Rs 15.27 crore. The successful resolution applicants will fund the revival through their own resources and internal accruals.

A key feature of the plan is its treatment of homebuyers. The project comprises 900 residential units, of which 571 had been sold before the company entered insolvency, although only 237 allottees filed claims during the CIRP. The tribunal directed the successful resolution applicant to ensure equitable treatment of various categories of buyers, including those who had paid only token booking amounts.

The resolution applicant has proposed to complete the project within 42 months and hand over flats to eligible allottees after obtaining statutory approvals. Homebuyers can either take possession of their allotted units by paying a 30% escalation on the basic sale price, or opt for a refund of their principal amount without interest. Refunds will be paid in three instalments after the application is made.

The tribunal also approved enhanced relief for 248 homebuyers who had paid token booking amounts but had not filed claims during the insolvency process. They will receive 50% of the principal amount reflected in the company’s records, the same treatment extended to 54 similarly placed creditors who had filed claims. An additional Rs 2.43 crore has been earmarked for these 248 buyers.

For statutory dues, the resolution plan provides 5% payment of the Income Tax Department’s claim, translating to Rs 20.98 lakh against a claim of Rs 4.19 crore. Other operational creditors will receive 25% of their admitted claims, while unpaid CIRP costs of Rs 2.01 crore will be settled in full within 30 days of the plan becoming effective.

The Corporate Insolvency Resolution Process (CIRP) against Sarv Awas Housing Bhiwadi Private Limited commenced after the NCLT admitted the insolvency petition on September 15, 2022. During the proceedings, the tribunal repeatedly sought modifications to the plan, directing fresh valuation of the project’s assets after observing that the original valuation had excluded a substantial number of unsold units. Following the fresh valuation and revised addendums, the CoC unanimously approved the enhanced plan.

In its order, the NCLT said the approved plan provides for effective implementation and adequately balances the interests of all stakeholders. It directed the Monitoring Committee to ensure that homebuyers holding decrees from the Real Estate Regulatory Authority (RERA) are treated on par with other allottees and that the 248 token-payment homebuyers receive the compensation promised under the resolution plan.