NCLT Orders Initiation of Insolvency Proceedings for Raheja Developers Over Unpaid Debts

The National Company Law Tribunal (NCLT) has initiated insolvency proceedings against Raheja Developers. This decision follows a petition by flat buyers from the Shilas project in Gurgaon. The NCLT noted that Raheja Developers defaulted on its debt obligations to these buyers, who had paid for their units but did not receive them on time. Consequently, the Corporate Insolvency Resolution Process (CIRP) has been initiated.

Representative image

A two-member bench of the NCLT, led by President Justice Ramalingam Sudhakar and AK Srivastava, appointed Manindra K Tiwari as the Interim Resolution Professional for Raheja Developers. The tribunal highlighted that the company failed to deliver the units despite payments being due. The possession was initially promised between 2012 and 2014, with an additional grace period of six months, but was further delayed.

Flat Buyers' Claims and Legal Proceedings

The case involves over 40 flat buyers who have claimed a default amounting to Rs 112.90 crore against Raheja Developers. These buyers stated they had paid more than 95% of the total sale price and fulfilled all demands made by the company. However, Raheja Developers did not deliver the units even within the extended timeline agreed upon in their contracts.

Raheja Developers defended itself by citing force majeure, claiming delays were due to uncontrollable circumstances covered in their agreement. They also argued that the petitioners represented less than 10% of total buyers, making the petition invalid. However, the NCLT dismissed these arguments, stating that the issues faced were not beyond the company's control.

NCLT's Rejection of Force Majeure Claim

The NCLT clarified that Raheja Developers' claim of force majeure does not apply in this situation. The tribunal pointed out that litigation with government departments cannot be considered an unforeseeable event or beyond control. It emphasized that obtaining statutory compliances like NOCs and occupancy certificates is part of real estate projects.

The tribunal further stated that such practical challenges require resolution by the company rather than using force majeure as a defense. The NCLT's order spanned 29 pages, detailing why Raheja Developers' arguments were insufficient to absolve them of liability.

Advocate Aditya Parolia represented the association of Revanta, Vanya, and Aranya projects in this matter. Notably, Raheja Developers faced similar insolvency proceedings in 2019 concerning delays in its Sampada project. However, those proceedings were set aside in January 2020 due to delays caused by clearance issues beyond their control.

Raheja Shilas project is located at Sector 109 in Gurugram, Haryana. The ongoing legal proceedings underscore ongoing challenges faced by real estate developers in meeting delivery timelines amidst regulatory hurdles and buyer expectations.