29 August 2019: The National Company Law Tribunal (NCLT) has ordered start of insolvency proceedings against NCR-based realty firm Three C Projects Ltd and also appointed an Interim Resolution Professional (IRP) to take over the management of the debt-ridden company. A two-member principal bench, headed by President Justice M M Kumar, admitted a plea filed by five flat buyers who had booked homes in the company’s Lotus Zing project in Noida, Uttar Pradesh.
“We are satisfied that a default has occurred and the applications under sub section 2 of section 7 (of IBC) is complete,” said NCLT.
“As a sequel… this petition is admitted and Manish Kumar Gupta is appointed as the Interim Resolution Professional,” it added.
NCLT also directed the ex-management of Three C Projects to “provide all documents in their possession and furnish every information in their knowledge” within a period of one week to the IRP.
The tribunal declared a moratorium, protecting the company from the lenders by prohibiting them from recovering their dues for a certain period.
The NCLT order came on a petition filed by flat buyers of the company for its project Lotus Zing, through their counsel Aditya Parolia, Partner, PSP Legal.
Flat buyers, who are now treated as financial creditors after recent amendments in the Insolvency and Bankruptcy Code (IBC), had paid money to the realty firm as per their construction-linked payment plans on various dates.
According to the buyer agreements, the flats were to be delivered in 33 months in the year 2014.
Three C Projects submitted that the petition against it was not maintainable and that the project was delayed due to various factors, including demonetisation, order from NGT and farmers’ unrest.
However, NCLT rejected the builder’s argument, saying that “submission made by the respondents (Three C Projects) is whole unsustainable.”
According to the tribunal, objections like water supply interruptions and farmers agitation “are merely lame excuses to deny the claim of the financial creditors.”
“The maximum period of 33 months has already expired either in 2013 or early 2014. The possession as per stipulation has not been handed over till date,” the tribunal observed.
NCLT said while there was some delay due to reasons specified in the clauses of the buyer agreements, home buyers could not be expected to wait till eternity.
“The clause cannot be given a literal meaning to mean that till eternity the corporate debtor would defer possession and the financial creditors are bound to wait.
“A reasonable construction of any such clause would be to grant maximum period of one year. Even then, the possession should have been delivered in 2015,” it said.