NCLT initiates insolvency resolution against GBP Group
Three directors of GBP Group had fled the country in Sept 2021, leaving 18 commercial and residential projects in Mohali in limbo and dashing the hopes of around 2,500 buyers who have invested over ₹1,500 crore
Coming to the aid of thousands of investors left in the lurch by the management of GBP Group, the National Company Law Tribunal (NCLT), Chandigarh bench, has initiated corporate insolvency resolution process (CIRP) against the realty firm.
A recovery mechanism, CIRP is initiated to determine whether the defaulting firm is capable of debt repayment through evaluation of its assets and liabilities. If the firm is not capable of repaying the debt, it is restructured or liquidated to settle the debts owed to creditors.
On Sunday, the tribunal floated tenders for invitation of expression of interest from third parties for resolution plans, including finalising a firm to take over the pending projects and complete them.
The mandatory period for completion of CIRP under the Insolvency and Bankruptcy Code, 2016, is 330 days, including time of appeals, stay, etc.
In September 2021, three directors of GBP Group – Satish Gupta, Raman Gupta, and Pardeep Gupta – had left the country, leaving all their offices in and around Mohali locked, and dashing the hopes of around 2,500 allottees who have invested over ₹1,500 crore in the group’s 18 commercial and residential projects in Mohali.
The tribunal’s action came on the petitions filed by some investors, who had demanded insolvency resolution. Following the petitions, the tribunal, on May 31, 2022, had declared the moratorium, prohibiting continuation or beginning of any suits or proceedings against the realty firm, and appointed an interim resolution professional (RP), Mukesh Gupta, to see the insolvency resolution process through.
The tribunal had also suspended two directors of the firm – Satish Gupta and Pardeep Gupta, who have been directed to file their replies by August 22, 2022, the next date of hearing, where they have also been summoned in person or through a representative. In case of default, the petitions will be heard and determined ex parte.
Ashu Kumar, president of Home Buyers and Investors Welfare Association of GBP, said “We are hoping for some positive results with the intervention of the NCLT. For months, investors have been spending sleepless nights at the thought of losing their hard-earned money.”
Notably, there are around 100 police complaints against the firm in Mohali and Chandigarh, where over 50 FIRs have been lodged against it.
The police are also working on requesting Interpol to issue a Red Corner Notice to arrest the directors and extradite them from Dubai, where they are said to have secured a business visa till September 19, 2024.
Projects hanging fire
Among the firm’s ongoing projects in Mohali, Camelia, offering both residential and commercial units, in Kharar, and GBP Centrum (commercial) in Zirakpur have been under construction since 2016.
At two other projects – Athens (residential and commercial) and Aeroze (residential) – both on Airport Road, construction has remained stalled for years, and at a residential colony in New Chandigarh, where plots have been sold, construction has not even begun.
The afflicted investors are located across Punjab, Haryana, Himachal Pradesh, Jammu and Kashmir, and even abroad.
ED files criminal case against firm
The Enforcement Directorate (ED), which is also conducting an inquiry against the GBP Group, has filed a criminal case in the Chandigarh district court after its directors failed to appear before it despite several notices.
The case has been filed under the Prevention of Money Laundering Act and Section 174 (non-attendance in obedience to an order from public servant) of the Indian Penal Code.
On June 3, ED had conducted searches at 19 locations in Chandigarh, Ambala, Panchkula, Mohali and Delhi in connection with a money laundering case, stemming from multiple cheating cases registered by the investors.
Besides GBP Group’s office and residences of its directors Satish Gupta and Pardeep Gupta, the central agency had also raided the firm’s associates.
The raids had uncovered unaccounted cash to the tune of ₹85 lakh, an Audi Q7 car and incriminating documents pertaining to the directors’ movable and immovable properties.
Meanwhile, in response to a buyer’s complaint, seeking revocation of GBP group’s registration and handing over the projects’ completion to respective buyers’ associations under the Real Estate (Regulation and Development) Act, 2016, the Punjab Real Estate Regulatory Authority has said amid legal proceedings by NCLT, ED and police, it will not treat all pending projects as one entity and will take action if any association comes up with a credible plan for a certain project.