News: NCLT orders liquidation of Three C Homes' Lotus City-11-02-2021
A division bench of NCLT-Delhi gave the ruling on Tuesday, rejecting the resolution plan of Ace Infracity Developers, which was awarded the project by the tribunal last year, citing non-compliance to the provisions of Insolvency Bankruptcy Code.
NOIDA: The National Company Law Tribunal (NCLT) has ordered the liquidation of Lotus City, a residential project promoted by Three C Company’s debt-ridden real estate firm Three C Homes Private Limited (TCHPL) in Yamuna Expressway’s Sector 22A.
A division bench of NCLT-Delhi gave the ruling on Tuesday, rejecting the resolution plan of Ace Infracity Developers, which was awarded the project by the tribunal last year, citing non-compliance to the provisions of Insolvency Bankruptcy Code. This was because Ace Infracity had agreed to bring on board only a fraction of required funds to complete Lotus City.
Gaurav Katiyar, the interim resolution professional of TCHPL, has been tasked with the job of initiating the liquidation process of Lotus City.
A plotted project that was sold to 512 buyers in 2011, Lotus City did not start, resulting in the buyers moving NCLT in 2019. And in September that year, the tribunal initiated insolvency proceedings against Three C Homes and appointed Katiyar as IRP. Katiyar subsequently invited prospective resolution applicants (PRAs) for the completion of the project. Two firms came forward and Ace bagged the project.Sahil Sethi, an advocate representing the dissenting buyers, told TOI on Wednesday that the liquidation value of the project was around Rs 480.70 crore, “while the resolution applicant has been bringing on board only a fraction of funds to complete the project”. “This is a landmark ruling by NCLT”.
According to him, the liquidation value for the corporate debtor was estimated around Rs 480.70 crore, against which the resolution plan approved by the committee of creditors provided for only an amount of Rs 180.34 crore.
“Even against the sum of Rs 180.34 crore, approved by the committee of creditors, the resolution applicant was obliged to bring in only Rs 95 crore by way of fresh infusion of funds, spread over a period of two years, and the remaining Rs 85 crore was to be contributed by the financial creditors or homebuyers themselves. The NCLT bench observed this as inequitable and unjust to homebuyers and cancelled the application altogether,” Sethi said. Ace Infracity said it would move the National Company Law Appellate Tribunal against the order. “We had 94% vote in our favour and only a few buyers had objected to the resolution application. We will challenge this order in a higher court,” Ajay Chaudhary, CMD of Ace Infracity.
