Mumbai: The National Company Law Tribunal (NCLT) has admitted real estate developer Snehanjali S. B. Developers Pvt Ltd for insolvency. The tribunal has appointed Dinesh Kumar Deora as the interim resolution professional for the company.
Snehanjali’s promoters—Jagdish and Gautam Ahuja – have been under the scanner of various police and investigating agencies for allegedly cheating more than 1,000 homebuyers.
A plea was filed by nearly 67 prospective homebuyers, who as financial creditors dragged the realtor to the dedicated bankruptcy tribunal. Under the 2018 amendment to the Insolvency and Bankruptcy Code, homebuyers have been given the stature of financial creditors.
“The default has occurred on part of the corporate debtor (Snehanjali) due to non-fulfilment of its obligations under the sale agreements executed with the financial creditors. Hence, it is found to be a fit case for directing initiation of CIRP in respect of the corporate debtor”, a bench led by justices K R Sajikumar and Sanjiv Dutt said.
Incorporated in 2019, the developer was earlier under a partnership with S.B. Developers.
In 2015, Snehanjali started collecting money from home buyers against booking of flats/units in respect of a redevelopment project (O2 Project) located on Sion-Chembur Road, Mumbai. It issued letters of allotment and also entered into agreements for sale in favour of the home buyers from time to time.
Thereafter, the project was to be completed initially by June, 2019. However, the real estate developer was unable to complete the project till June, 2023. The developer neither handed over possession of the respective flats/units to the home buyers nor refunded the amounts with interest. Aggrieved by the situation an appeal was lodged by them seeking initiation of inzovency proeedings against the company.
The homebuyers submitted that collectively they had invested more than ₹81 crore in the project which was duly acknowledged by the developer. The timelines were extended from 2019 to 2023; however, despite indefinite extensions the project remains to be completed, they added. July 2023 was set as the date of default in the application.
Niyati Merchant, associate partner at MDP and Partners, representing the homebuyers submitted that the home buyers invested their lifetime savings, obtained loans and made financial arrangements, relying on the promises made by the corporate debtor for modern amenities and facilities as well as timely completion of the project. Since the project was incomplete, Merchant added that it led to causing distress to the home-buyers who received neither possession nor refunds till date.
On the other hand, counsel for the developer argued that applicants had failed to prove that there is a default committed by the Corporate Debtor under Section 3(12) of the Code. The applicants had failed to follow the procedure established under the statute and have filed the application without furnishing a record of the default, counsel added.
Moreover, counsel argued that Snehanjali is a solvent company. It is pointed out that the corporate debtor had repaid the loan of Kotak Mahindra Investments Limited of around ₹68 crores and obtained its “No Dues Certificate” dated August 2023 thereby confirming that it does not have any charge over the ‘O2’ Project.
It was thus submitted that the corporate debtor is trying to resolve all the issues and complete the O2 Project at the earliest. However, due to a fraud played by the former Directors of the Corporate Debtor and non-compliance of the home buyers, the Corporate Debtor could not complete the O2 Project despite intending to do so, their counsel claimed.
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Published: 10 Mar 2024, 06:06 PM IST