NCLT approves Ace Infracity resolution plan for debt-ridden 3C Homes

The NCLT has approved the resolution plan by Ace Infracity Developers for the debt-ridden 3C Homes.

The NCLT bench observed the resolution plan submitted by Ace Infracity Developers has been approved by the Committee of Creditors (CoC) with 100 per cent votes and it can not "interfere with the "commercial wisdom" of the lenders.

Earlier, the National Company Law Tribunal (NCLT) had denied its approval following opposition filed by some of the allottees and was challenged before the appellate tribunal NCLAT, which had remanded the matter back with certain directions.

The resolution plan offers "100 per cent of the principal of farmer's compensation (Rs 71.66 crore), which is included in Rs 173.46 crores agreed to pay to Yamuna Expressway Industrial Development Authority (YEIDA)".

In its 27-page long order, the NCLT said it is "satisfied that the Resolution Plan has made adequate provisions with respect to all the objections raised by" it over dues to the YEIDA, acquiring of the Land etc".

Besides, under the resolution plan, allottees are getting possession of 512 residential plots of the project "Lotus City" valued at Rs 211 crore after being developed.

The term of this Resolution Plan is 24 months within which the plots would be developed and delivered to the allottees.

"The Monitoring Committee shall continue till the closing date. The Resolution Applicant would take a RERA Re-registration for the completion of the work as defined above," it said.

While approving the plan, a two-member NCLT bench said it was "satisfied that the Resolution Plan is in accordance with" the provision of the Insolvency & Bankruptcy Code (IBC) and also complies with regulations of the IBBI.

The application "which is for approval of the Resolution Plan is allowed and the Resolution Plan of Rs 140.39 crore is hereby approved," said a two-member NCLT bench.

The tribunal further said that the resolution plan submitted by Ace Infracity Developers is now "binding on the Corporate Debtor (Three C Homes) and other stakeholders" and shall come into force with immediate effect.

"The moratorium imposed under section 14 of the Code shall cease to have effect from the date of this order," the NCLT order said, directing its RP Gaurav Katiyar to "submit the records collected during the commencement of the proceedings to the Insolvency and Bankruptcy Board of India (IBBI) for their record".

It further said as far as the question of granting time to comply with the statutory obligations/seeking sanctions from governmental authorities is concerned, Ace Infracity "is directed to do the same within one year as prescribed under section 31(4) of the Code".

The Corporate Insolvency Resolution Process (CIRP) was initiated by the NCLT against Three C Homes Pvt Ltd on September 6, 2019, and appointed Katiyar as an Interim Resolution Professional (IRP).

The RP had selected two eligible prospective Resolution applicants for submission of bids - East India Udyog Ltd, which was in a joint venture with Ashiana Housing and Ace Infracity Developers. Two others were found ineligible.

Later, the CoC in their fifth meeting in 2020 found Ace Infracity's bid was approved.

The fair value of the Corporate Debtor (3 C Homes) is Rs 600.87 crore and the liquidation value of Rs 480.70 crore as per Form-H filed with the application.

Earlier, the NCLT on February 8, 2021, rejected the plea filed by RP, seeking approval of the Resolution Plan by taking into consideration certain objections taken by some of the allottees in the project.

This was challenged before the appellate tribunal NCLAT by the Home Buyer's Association.

Passing an order, the National Company Law Appellate Tribunal (NCLAT) had on July 8, 2021, remand the matter back to the NCLT directing to reconcile the benefits of homebuyers in the approved resolution plan and to implead the Yamuna Expressway Industrial Development Authority to determine the status of the dispute with the farmers.

Further, Lotus City Plot Buyers Welfare Association and YEIDA had also filed an appeal before the Supreme Court. The apex court had on April 17, 2023, directed the NCLT to take up the plan approval application and pass necessary orders.