Greater Noida West: 600 homebuyers set to receive possession under NCLT’s reverse insolvency process
Delhi-NCR real estate market: RG Luxury Homes in Greater Noida West will soon hand over possession to 600 homebuyers under NCLT’s reverse insolvency process
As many as 600 homebuyers of RG Luxury Homes, who have been waiting to get possession of their housing units in Greater Noida West since the last six years, will soon receive delivery of their apartments as the Greater Noida Authority has handed over the occupancy certificate (OC) for three more towers to the builder, the real estate company said.
RG Luxury Homes is the first stalled project in Gautam Buddh Nagar district to have been granted the occupancy certificate by the local authority under the reverse insolvency process.
The real estate firm has received occupancy certificates for three more towers bringing the total to seven. There are a total of nine towers in the first phase. This is the first project in Gautam Buddha Nagar to receive an OC after securing an order of Reverse Insolvency from NCLT and completing a stuck project under the supervision of IRP (Interim Resolution Professional), the company said.
What is Reverse Insolvency Resolution Process?
Reverse insolvency resolution process is a provision in the Insolvency and Bankruptcy Code (IBC) that allows corporate debtors to initiate the resolution process themselves. It's a mechanism used to revive stressed real estate projects or companies that are undergoing insolvency proceedings. Under reverse insolvency, promoters are required to infuse funds in the project and complete it.
RG Group has completed construction and formalities of another phase of RG Luxury Homes in Greater Noida West and obtained the Occupancy Certificate (OC) for three towers - D, E and F from competent authorities under the supervision of the insolvency resolution professional. The group will be offering possession to 600 flat owners. Last year the group obtained OC for A, B, C and M towers comprising 850 units, the company said in a statement.
The project is spread over 18.5 acres and is located in Sector-16B in the Greater Noida West, Uttar Pradesh. There are a total of nine towers that went into insolvency. The remaining two towers are under construction and will be delivered soon. The first phase has a total of 1918 units, it said.
The project was launched in 2010 with an initial deadline of 2014. Facing delays, the construction work was stalled in 2016 due to a fund crisis. In 2019, a group of homebuyers moved the National Company Law Tribunal (NCLT). In February 2020 the NCLT issued a ‘reverse insolvency order’, directing the promoter of RG Group to complete it under the supervision of an insolvency resolution professional (IRP).
In October 2021, the promoter commenced the construction of the project again under the IRP's supervision and secured occupancy certificates (OCs) from the Greater Noida Industrial Development Authority (GNIDA) in February for 854 flats spread across four towers.
Himanshu Garg, director, RG Group said, “Securing the Occupancy Certificate (OC) of another three towers of RG Luxury Homes marks an important milestone for us. Now, we have OC of 7 towers comprising 1450 units. Very soon, the remaining 460 units of phase 1 will be delivered."
Manoj Kulshrestha, IRP, said, “Looking at the present scenario of real estate projects hitting NCLT and prolonged resolution process, resolution of RG Luxury Homes was a challenging task.”
Saurabh Jain, advocate representing the real estate company said, “Reverse-CIRP, which began with this case, has proven to be a great success for real estate projects, where homebuyers are the biggest sufferers. Although there were initial hurdles, as the IBC did not have specific provisions for the completion of a project by the promoter, the NCLAT recognized the challenges faced by homebuyers under the normal CIRP process.”
Kumar Mihir, advocate for the IRP in the Supreme Court hoped the project will set an example that real estate projects can be revived if all stakeholders have a collective approach to find the solution instead of just indulging in blame game.
RG Group has so far executed and delivered 14 commercial and retail projects and 1540 apartments spread across more than 2 million square feet in sector 120, Noida. The Group is currently executing the residential group housing project in Noida and Greater Noida (West) popularly known as Noida Extension.
