Raheja Developers gets lifeline: NCLAT limits insolvency to one Gurugram project

In a relief to Raheja Developers, the National Company Law Appellate Tribunal (NCLAT) has limited insolvency proceedings against the real estate firm to its 'Raheja Shilas' project in Sector 109, Gurugram. The three-member NCLAT bench, chaired by Justice Ashok Bhushan, delivered the interim order on Thursday, stating that insolvency proceedings would focus solely on Raheja Shilas while mandating detailed updates on the company's other incomplete and ongoing projects.

"We are of the view that, for the time being, as was prayed by the Applicant/Respondent herein, the insolvency may convene to one Project, namely 'Raheja Shilas (Low Rise)," said NCLAT in its interim order.

The appellate tribunal was reviewing an appeal by Navin Raheja, Chairman and Managing Director of the suspended board of Raheja Developers, challenging an earlier ruling by the National Company Law Tribunal (NCLT). The NCLT had initiated Corporate Insolvency Resolution Proceedings (CIRP) against the firm based on a plea by over 40 flat buyers claiming defaults totalling ₹112.90 crore.

The NCLAT directed the Interim Resolution Professional (IRP) to collate claims from stakeholders and submit a comprehensive status report. The tribunal also instructed the IRP to collaborate with Raheja's management and employees to expedite the issuance of an Occupancy Certificate (OC) and complete pending project work.

NCLAT said Raheja Developers has submitted that between 4 to 8 weeks, the OC is contemplated to be issued, hence the issue in the Insolvency proceedings shall be solved.

"IRP shall take all endeavour with the assistance and management of employees of the Corporate Debtor (Raheja) to obtain the OC and do other completion works which are required for handing over the Project to the allottees."

Flat owners initiating the insolvency plea had also urged the NCLT to restrict proceedings to the specific project they were associated with.

However, intervenors represented by advocate Aditya Parolia called for insolvency to be extended to Raheja Developers' other projects, citing widespread delays and unresolved dues.

The NCLAT has directed the company to provide a detailed account of all its ongoing projects and their status.

The NCLT had earlier ruled that Raheja Developers failed to deliver units within stipulated timelines, with possession originally scheduled between 2012 and 2014. A 29-page order said Raheja Developers has a "debt due and default" against the flat allottees, who had made their payments and delivery of the units was not on time and referred it to CIRP.

Raheja Developers faced similar insolvency proceedings in 2019 concerning its Raheja Sampada project. That case was dismissed in January 2020, as the delays were attributed to factors beyond the company’s control, including regulatory approvals.