MC: NCLAT asks Raheja Developers to settle dispute with financial creditors

28 August 2019: The National Company Law Appellate Tribunal (NCLAT) has asked realty firm Raheja Developers to settle its dispute with homebuyers, after the company challenged the NCLT’s order to initiate insolvency proceedings against it.

A three-member NCLAT bench, headed by Chairperson S J Mukhopadhaya, directed the interim resolution professional (IRP) appointed by the National Company Law Tribunal (NCLT) not to issue any public notice and also not to constitute a committee of creditors.

The NCLAT directed to list the appeal filed by the realty firm on September 3, 2019, for orders.

The appellate tribunal’s direction came over a petition filed by Raheja Developers challenging the order of NCLT that directed to initiate insolvency proceedings on a petition filed by flat buyers.

Homebuyers are now considered as financial creditors under the Insolvency and Bankruptcy Code.

Last week, a two-member principal bench of the NCLT, headed by President M M Kumar, ordered start of insolvency proceedings and appointed an IRP to take over the management of the company.

The tribunal had said “a default has occurred” by Raheja Developers in giving possession of apartments, and rejected the contention of the realty firm that the delay was caused because of lack of infrastructure in the area to be provided by the state government authorities.

The NCLT’s order came over a petition filed by a flat buyer of Raheja Developers.

The petitioner had booked an apartment in the residential project Raheja Sampada developed by the corporate debtor (Raheja Developers).

Raheja Developers had issued a joint allotment letter on August 3, 2012, and executed a flat buyer’s agreement. According to the agreement, possession was to be delivered within 36 months, which was not fulfilled.

The buyers had made a payment of Rs 86.62 lakh to the company on various dates and sought a refund along with 18 per cent interest rate, claiming default after possession was not handed over within the stipulated time frame.

The NCLT observed that the 36-month period came to an end on August 3, 2015, and construction was not complete.

Raheja Developers had contended that there was no default from its part as the handing of possession was subject to provisioning of the infrastructure by the government in the area and it has received the occupation certificate in 2016.

According to the realty firm, till date, water and sewer pipelines have not been provided.

“The vague arguments made by the corporate debtor-respondent hardly need to be noticed. The other objections are also lame excuses to deny the claim of the financial creditor,” the NCLT had said.

Moneycontrol reported

ET: NCLT initiates insolvency proceedings against Raheja Developers

26 August 2019: The National Company Law Tribunal (NCLT) has initiated corporate insolvency resolution process against Raheja Developers under Section 7 of the Insolvency and Bankruptcy Code 2016.

The court has appointed Jitesh Gupta as the interim resolution professional (IRP) for the case.

The buyer had booked an apartment in Raheja’s Sampada in August 2012 for Rs 86.62 lakh. The project was to be delivered in August 2015 but the builder failed to do so. The buyer further pleaded that the builder was to apply for water connections within 15 days and till then portable water through tankers was required to be supplied to the residents, which has not been the case.

Raheja in its plea said that there is no default on part of the corporate debtor. The delay was on part of the authorities as till date water and sewer line has not been provided.

NCLT however admitted buyer’s petition and ordered the builder that the supply of essential goods like supply of water, electricity to the buyer should not be terminated or suspended.

The buyer has been ordered to deposit Rs 1 lakh to the IRP to meet the expenses to perform his function within three days of the order.

The ex-management has been directed to provide all documents in their possession and furnish every information within a period of one week from the admission of the petition to the IRP.

The Economic Times reported

ET: Cannot reject insolvency plea over claims disputed after demand notice: NCLAT

28 July 2019: The National Company Law Appellate Tribunal (NCLAT) has asked the NCLT to decide over an insolvency plea filed against leading real estate firm Raheja Developers by one of its operational creditors.

Setting aside the earlier order passed by the National Company Law Tribunal (NCLT), the NCLAT said existence of any “disputed claim” cannot be a ground to reject an application under Section 9 of the Insolvency and Bankruptcy Code (IBC) to initiate insolvency proceedings, if it is not raised before issuance of a demand notice.

A three-member Bench, headed by Chairman S J Mukhopadhaya, observed that “existence of dispute must be pre-existing i.e. it must exist before the receipt of the demand notice or invoice”.

Allowing the appeal of Ahluwalia Contracts (India) Ltd, an operational creditor of Raheja Developers, NCLAT said no arbitration proceeding was initiated or pending before demand notice under Section 8(1) of IBC and has remitted the matter back to the NCLT for fresh hearing.

“We set aside the impugned judgment dated September 19, 2018, and remit the case to the Adjudicating Authority (NCLT) for admitting the application under Section 9 after notice to the ‘Corporate Debtor’ (Raheja) to enable the ‘Corporate Debtor’ to settle the matter prior to the admission,” said NCLAT in its order passed on Tuesday.

The Delhi bench of the NCLT had on September 19 dismissed an application filed by Ahluwalia Contracts (India) Ltd under Section 9 on grounds that the claim was disputed and arbitration proceedings has already been initiated over it.

Section 9 of IBC gives power to the operational creditors of a company to initiate corporate insolvency resolution process after default.

Before that, he has to send a demand notice of unpaid operational debtor copy of an invoice demanding payment of the amount involved in the default under Section 8(1) of IBC.

This was challenged by Ahluwalia Contracts before the appellate tribunal NCLAT.

NCLT had observed that claims of Ahluwalia Contracts falls within the ambit of ‘disputed claim’ and arbitration in the matter has already been initiated.

However, Ahluwalia Contracts, which was represented by his counsel Shashank Garg contended that when the demand notice was issued by it under Section 8(1) of the IBC, no arbitration proceeding was initiated or pending and it was initiated after that.

Consenting to it, NCLAT said “existence of dispute must be pre-existing i.e. it must exist before the receipt of the demand notice or invoice”.

It further observed that the arbitration proceeding was initiated by Raheja Developer on May 24, 2018, which is after about one month from the date of issuance of demand notice under Section 8(1) issued on April 28, 2018.

Ahluwalia Contracts had received work order for plumbing and civil work from Raheja Developers and had claimed dues of Rs 5.50 crore.

The Economic Times reported