Raheja Developers to face insolvency proceedings

Raheja Developers to face insolvency proceedings

July 29, 2019 in Uncategorized

MUMBAI: Delhi-based builder Raheja Developers is facing insolvency proceedings as the National Company Law Appellate Tribunal (NCLAT) has directed the adjudicating authority to admit the matter under Section 9 of Insolvency and Bankruptcy Code, 2016.
The appellate tribunal has set aside an earlier order in a plea filed by one of the operational creditors, Ahluwalia Contracts (India). The adjudicating authority, the National Company Law Tribunal, New Delhi, had earlier rejected Ahluwalia Contracts’ application on the grounds that the claim fell within the ambit of “disputed claim”, and arbitration proceedings were initiated. The matter relates to an outstanding payment of ?6.51 crore.
However, the appellate tribunal has ruled that if the dispute was not raised prior to the issuance of the demand notice, existence of a disputed claim cannot be a ground to reject an application under Section 9 of the IBC. Ahluwalia Contracts had moved the NCLT after the developer failed to pay despite several demand notices for its outstanding dues related to work executed by the company.
Raheja had countered this with its claim that the matter related to the work and payment was under dispute and that arbitration proceedings regarding this were already initiated. “It’s a landmark judgement which will aid similarly placed creditors with much better clarity in cases where debtor has only a dispute with the quantum of claim and not with the existence of a claim,” said Shashank Garg, an advocate for Ahluwalia Contracts in the dispute.
“We have huge claims against Ahluwalia due to delay and poor construction/service on their part in the project that outweighs their claim. We are already in arbitration for the same,” said a spokesperson for Raheja Developers in an email response to ET’s query.

Sources: realty.economictimes.indiatimes.com

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