NCLT closes insolvency proceedings against Parsvnath Landmark

The National Company Law Tribunal has closed the insolvency resolution process against a Parsvnath Developers' subsidiary after homebuyers 'amicably settled' their dispute with the realty firm.

Parsvnath Developers' arm Parsvnath Landmark is constructing a housing project, comprising 500 units, at Civil Lines in the national capital.

In its order dated January 11, the NCLT had allowed insolvency proceedings against Parsvnath Landmark after three home buyers approached the tribunal complaining about delay in completion of the project.

However, a two-member bench of the NCLT stopped the insolvency proceeding in an order dated February 1, after the financial creditors of the company (homebuyers) informed about the settlement with Parsvnath Landmark.

The three flat buyers along with the company filed their affidavits before the tribunal informing the decision.

"As a sequel to the above discussion, the order dated January 11, 2019 initiating Corporate Insolvency Resolution Process against the Corporate Debtor is closed and naturally the order would not be given effect any further," said the NCLT.

The tribunal has also directed the interim resolution professional appointed for Parsvnath Landmark to not "conduct any proceedings".

It further said: "We hope and trust that the parties will abide by the terms of the settlement and avoid another petition with a prayer for triggering of Corporate Insolvency and Bankruptcy Process".

However, the IRP informed the tribunal that the committee of creditors has not yet been constituted.

The IRP also said that 300 claims have been received against the company after a public notice was issued to invite the same.

On this NCLT observed: "We find that this application is covered, however we constrained to observe that the 300 claims which have been received by the IRP may result in to a spat of the other petitions under Section 7 or 9 of the Code, 2016".

On January 11, passing an order, the NCLT had admitted an insolvency petition filed by three homebuyers against the subsidiary firm - Parsvnath Landmark Developers - for inordinate delay in the development of this project and non-refund of their payment.

The tribunal had also appointed Yash Jeet Basrar as an interim resolution professional (IRP) to run the corporate insolvency resolution process of Parsvnath Landmark Developers.

The tribunal direction had come over a petition filed by Alka Agarwal and two others, who had booked flat at La Tropicana project of Parsvnath Landmark Developers at Khyber Pass in Delhi for a consideration of Rs 10.93 crore.

According to the flat buyer agreement executed between the parties on 1 October 2009, Parsvnath Landmark Developers was to hand over the possession within 36 months from the date of commencement of construction with grace period of six months.