Homebuyers' Plea For Insolvency Against Ansal Hi-Tech Dismissed By NCLAT
Homebuyers' Plea For Insolvency Against Ansal Hi-Tech Dismissed By NCLAT
The National Company Law Appellate Tribunal (NCLAT) has rejected a plea filed by homebuyers of a Greater Noida project, seeking to initiate insolvency proceedings against Ansal Hi-Tech Township Ltd. This decision upholds an earlier order passed by the Delhi bench of the National Company Law Tribunal (NCLT) in January 2023.
Homebuyers argued that their agreement with Ansal Hi-Tech treated the entire 1,500-acre "Sushant Megapolis" project located at Greater Noida in Uttar Pradesh as a single entity, signed before the Real Estate Regulation and Development Act (RERA) came into effect. They claimed it included plots, built-up plots, villas, apartments, etc., spread across various allocated sites.
NCLAT disagreed with this view based on RERA regulations. As per RERA, each phase of a multi-phase real estate project needs separate registration with the Real Estate Regulatory Authority. In this case, Ansal Hi-Tech had registered three separate agreements with the homebuyers - Plot Allottee Agreement, Built-up Unit Allottee Agreement, and Apartment Allottee Agreement - potentially indicating separate projects.
NCLAT highlighted the IBC's requirement for initiating insolvency proceedings against a real estate developer. Flat buyers (financial creditors) need to file a joint plea with either at least 100 other flat buyers from the same project or a minimum of 10 per cent of the total number of flat buyers in the project, whichever is less.
NCLAT determined that "Sushant Megapolis" comprised various real estate projects with distinct characteristics, building plans, and independent terms. These projects had separate RERA registrations and approval letters.
NCLAT observed that the project had 25 separate RERA registrations for different categories (plots, apartments, etc.). The homebuyers filing the plea did not meet the minimum threshold (10 per cent or 100 people) required under the IBC for any of these project categories.
NCLAT concluded that the homebuyers' plea lacked legal merit as it did not fulfil the criteria set forth by RERA and IBC for initiating insolvency proceedings against a real estate developer for a single project. The plea was dismissed due to the project's multi-phased nature and the homebuyers not meeting the minimum requirement for filing a joint insolvency petition.
