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Insolvency proceedings against Puma Realtors, relief for homebuyers in Chandigarh

Ray of hope for about 800 homebuyers who had invested in Mohali’s Ireo rise and Ireo Hamlet and are likely to get refunds or possession of flats in Sectors 98, 99

punjab Updated: Oct 29, 2018 10:32 IST
Munieshwer A Sagar
Munieshwer A Sagar
Hindustan Times
Ireo rise,Ireo Hamlet,mohali builders
File photo of Mohali’s Ireo rise.(HT File)

About 800 homebuyers invested in Mohali’s Ireo rise and Ireo Hamlet, two premium projects coming up in Sectors 98 and 99, are a much relieved lot today as they are likely to get refunds or possession of apartments because the National Company Law Tribunal (NCLT) has initiated insolvency proceedings against project developer Puma Realtors Pvt Ltd. An interim resolution professional (IRP) has been appointed for the task.

This means NCLT will have the option of either getting another investor to take over the company and manage the homebuyers’ assets or go in for liquidation of the company’s assets to repay the homebuyers.

Despite consumer court judgments in their favour earlier those buyers who were unable to get their dues from the developer can now file for claims against him with the tribunal-appointed IRP. Homebuyers are considered as financial creditors under the recently amended Insolvency and Bankruptcy Code, 2016 (IBC).

The case

The order of principal bench of NCLT, Delhi came in an insolvency case filed by Paramjeet Singh Saini, a homebuyer (financial creditor) in Ireo Hamlet, against Puma (corporate debtor), an Ireo Group Company, under IBC .

Saini approached the State Consumer Disputes Commission, Chandigarh, asking for a refund as the developer failed to deliver possession according to the plot buyers’ agreement.

After the commission directed the developer to refund Saini’s money with interest, Puma approached the National Consumer Disputes Redressal Commission.

Meanwhile, a compromise was reached between the two parties, according to which the developer gave several postdated cheques to the petitioner. However, after some of these cheques were later dishonoured Saini approached NCLT as financial debtor.

In its response the developer expressed its inability to pay the debts and stated, “The company is in financial distress and would be greatly aided by corporate restructuring.”

The NCLT observed that dishonouring the cheques will be seen as default on the part of corporate debtor, and initiated insolvency proceedings.

Not all homebuyers, however, are happy with the NCLT order. Karan Kandhari, a resident of Ireo Rise, says, “Now who will complete the Ireo projects here, and undertake maintenance work where possession has already been given? Even consumer court cases have been stayed now.”

NCLT Order

The tribunal restricted the developer from transferring, encumbering, alienating or disposing of any of its assets.

It also prohibited recovery of any property by an owner or lessor where the developer occupies or is in possession of the property. All the civil suits (including consumer complaints, execution petitions etc) pending before the insolvency commencement date will be stayed till the completion of the corporate insolvency process.

First Published: Oct 29, 2018 10:13 IST