Lawstreet Journal

NCLAT Sets Aside NCLT Order Invoking Insolvency Proceedings by Home Buyers against Ansal Properties [READ ORDER]

Lawstreet Journal 3 Sep 2020 7:54pm

Image courtesy: Lawstreet Journal Judiciary NCLAT Sets Aside NCLT Order Invoking Insolvency Proceedings by Home Buyers against Ansal Properties [READ ORDER]

NCLAT set aside orders of the National Company Law Tribunal dated March 17, 2020, directing the initiation of insolvency proceedings against Ansal Properties and Infrastructure Ltd. (APIL) and also initiated an interim resolution profession replacing the board of the company. NCLT directions came over by a petition filed by two flat buyers who had jointly booked a unit at APIL in Sushant Golf City, Lucknow. As per the agreement, Ansal had undertaken to complete the project within two years from the date of commencement of construction on receipt of a sanction plan from the authority in 2015. The company failed to complete the project by 2017 and as a result, both allottees reached the Uttar Pradesh Real Estate Regulatory Authority (RERA), RERA issued a recovery certificate against Ansals and the Respondents then took recourse under IBC to recover their dues. 

The bench had two issues arising for consideration in front of them:-

  • Whether this is a fit case for invoking Rule 11 of the NCLAT Rules to allow the parties to settle for dispute?
  • Whether the application filed by respondents Nos. 1 & 2 under Section 7 of the ‘I&B Code’ was not maintainable?

Regarding the first issue, the bench said that “allowing of withdrawal of applications on the basis of such settlement which is not all-encompassing and being detrimental to the interest of other Claimants including the allottees numbering around 300 would not be in consonance with the object of ‘I&B Code’ and purpose of invoking Rule 11 of the NCLAT rules. In… Continue Reading...

Tagged: NCLAT   NCLT  
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