Insolvency Proceedings Begin For Raheja Developers: A Step Toward Financial Resolution

                New Delhi, Nov 20 (PTI) Raheja Developers on Wednesday moved before the appellate tribunal NCLAT to challenge the initiation of insolvency proceedings against the realty firm 
over default on non-delivery of its Gurugram-based Shilas project.
     On Tuesday, the Principal Bench of the National Company Law Tribunal (NCLT) admitted a plea filed by over 40 of its flat allottees of Sector 109, Gurugram-based projects and 
directed to initiate a Corporate Insolvency Resolution Process (CIRP).
     Moreover, the NCLT had also appointed an Interim Resolution Professional (IRP), suspending the board of the realty firm and putting it under the protection of moratorium against 
lenders, as per the provisions of the Insolvency & Bankruptcy Code.
     The NCLT has also directed the IRP to submit a report on the progress of the CIRP by January 22, 2025.
     The said order has been now challenged by Navin Raheja, Chairman & Managing Director of the suspended board of the realty firm before the National Company Law Appellate 
Tribunal (NCLAT).
     Raheja's petition was presented before a three-member NCLAT bench, comprising Justice Rakesh Kumar Jain, which directed it to list on Thursday for a hearing.
     The matter relates to the Raheja Shilas project located at Sector 109, Gurugram, Haryana, where over 40 flat buyers have claimed a default of Rs 112.90 crore against the realty 
firm.
     On Tuesday, NCLT in its order had said Raheja Developers has a "debt due and default" against the flat allottees, who had made their payments and delivery of the units was not 
on time and referred it to CIRP.
     "There is a default on the part of the CD (corporate debtor), in terms of nonpayment of the debt due (delivery of the units) against the amount raised from them under the real estate 
project when the debt has become due and payable," said the NCLT.
     The NCLT in its 29-page-long order said possession was to be given in the year 2012-2014 with a grace period of 6 months. However, it was extended further. This debt has been 
acknowledged via various emails, and the default is continuing, it said.
     The petitioners had submitted before NCLT that they have paid over 95 per cent of the total sale price and 100 per cent of all the demand made to date as per the demand letter 
issued by Raheja Developers in the majority of cases.
     However, it completely failed to deliver the possession of impugned units even within the extended schedule, as per the agreement to Sell/Flat Buyers Agreement.
     While defending, Raheja Developers said the delay of over four years was on account of force majeure, a situation which is beyond its control, and it was covered in the agreement.
     It also contended that the petitioners' number is less than 10 per cent of the total buyers, hence the petition was not maintainable.
     However, rejecting it, the NCLT said the plea of delay being force majeure taken by the CD shall not apply to the facts of the present case because the difficulty is beyond the 
control of the CD.
     "In this case, CD has entered into a litigation with the government department. Therefore, it cannot be termed as force majeure clause," the NCLT said, adding that "the hurdles 
stated by CD in its reply, affidavits, and written submissions, are not something which can be termed as the force majeure or beyond the control of CD or unforeseeable".
     Such statutory compliances, NOC, occupancy certificates, etc are part and parcel of such real estate projects.
     "These hurdles are practical situations for which CD has to come forward for the resolution and he cannot wipe off its liability by taking the defence of force majeure or the defence 
of illegitimate claims by government/other appropriate authorities," said NCLT in its 29-page-long order.
     Earlier also, insolvency proceedings were initiated against Raheja Developers in 2019 over a delay in its Raheja Sampada project.
     However, in January 2020, it was set aside as the delay in the project was on account of the absence of clearance by the competent authorities, which was beyond its control.

Source : Economic Times