OPEN APP
Home / Companies / Homebuyers move SC against NCLT order on Amrapali group

New Delhi: A total of 107 homebuyers on Wednesday moved the Supreme Court against an order of the National Company Law Tribunal (NCLT) that admitted Bank of Baroda’s insolvency petition against Amrapali’s Silicon City project in Noida.

The Amrapali group has liabilities of about Rs3,000 crore towards authorities and owes over Rs1,000 crore to about 10 banks. The property developer needs about Rs3,000 crore to complete its ongoing projects. In this specific project, the realtor has defaulted on a loan of Rs55 crore taken from Bank of Baroda. Homebuyers have sought quashing of the September order passed by the NCLT, and said the moratorium imposed under provisions of the Insolvency and Bankruptcy Code, 2016 (IBC) is violative of Article 14 (equality before law) of the Constitution.

They have sought for the debts owed to the homebuyers to be treated equally with that of creditors specified under the code. Challenging various provisions of the IBC, it was submitted that the homebuyers belonged to the low-and middle-income groups, who should not be subjected to liquidation proceedings of discriminatory nature and must be granted equal protection as other stakeholders—financial and operational creditors.

On 4 September, NCLT admitted insolvency proceedings against Amrapali and appointed an interim resolution professional (IRP) to carry out the proceedings under the code. Under the order, the tribunal issued a moratorium prohibiting any fresh proceedings or continuation of any proceedings against Amrapali Silicon City Pvt. Ltd.

This, according to the petitioners, will have a bearing on the homebuyers of Amrapali Centurian Park Pvt. Ltd, which is a subsidiary of Amrapali Silicon City Pvt. Ltd.

The NCLT order has, by default, triggered the liquidation of Amrapali Centurian Park since its net worth has substantially eroded, the petition stated. Amrapali had launched 11,000 flats in Noida, of which 8,500 have been delivered and 2,500 are pending. This is the second instance after Jaypee Infratech Ltd where home buyers have approached the apex court seeking protection of their interest in insolvency proceedings initiated by NCLT.

On 11 September, the court safeguarded the interest of home buyers and directed the IRP to take over the management of Jaypee and submit an interim resolution plan—one that takes into account the interest of homebuyers—within 45 days. Jaypee Associates Ltd (parent firm of Jaypee Infratech) was also directed to deposit Rs2,000 crore to the court by 27 October.

Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Recommended For You

×
Edit Profile
Get alerts on WhatsApp
Set Preferences My ReadsWatchlistFeedbackRedeem a Gift CardLogout