CA(AT)(I)-926/2019-NCLAT

A Reverse CIRP can be followed in the cases of real estate infrastructure companies in the interest of the allottees & survival of the real estate companies & to ensure completion of projects – Flat Buyers Association Winter Hills – 77, Gurgaon Vs. Umang Realtech Pvt. Ltd through IRP & Ors. – NCLAT

NCLAT held that the Infrastructure which is constructed for the allottees by Corporate Debtor (Infrastructure Company) is an asset of the Corporate Debtor. The assets of the Corporate Debtor as per the Code cannot be distributed, which are secured for ‘Secured Creditors’. On the contrary, allottees (Homebuyers) who are ‘Unsecured Creditors’, the assets of the Corporate Debtor which is the Infrastructure, is to be transferred in their favour (‘Unsecured Creditors’) and not to the ‘Secured Creditors’ such as Financial Institutions/ Banks/ NBFCs. Normally, the Banks/ Financial Institutions/ NBFCs also would not like to take the flats/ apartments in lieu of the money disbursed by them. On the other hand, the ‘unsecured creditors’ have a right over the assets of the Corporate Debtor i.e. flats/ apartment, assets of the Company. NCLAT also held that CIRP against a real estate company (Corporate Debtor) is limited to a project as per approved plan by the Competent Authority and not other projects which are separate at other places for which separate plans approved.

A Reverse CIRP can be followed in the cases of real estate infrastructure companies in the interest of the allottees & survival of the real estate companies & to ensure completion of projects – Flat Buyers Association Winter Hills – 77, Gurgaon Vs. Umang Realtech Pvt. Ltd through IRP & Ors. – NCLAT Read Post »

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