NOIDA: The National Company Law Appellate Tribunal (NCLAT) has allowed a reverse corporate insolvency resolution process (CIRP) for a group housing project in Sector 79 under the supervision of the interim resolution professional (IRP).

The move followed an assurance from the developer that it would complete the project in a stipulated time frame and arrange for the interim finance.

The appellate tribunal agreed to the developer’s plea, but made it clear that the reverse CIRP would be cancelled if the company breached any term and condition of the agreement it reached with the buyers.

In 2014, The Belvedere was launched by Sequel Buildcon Pvt Ltd – an Ajnara subsidiary. The project included 660 flats, of which 318 are yet to be sold. While a majority of the flats were sold between 2015 and 2018, the buyers were assured of possession in three years.

But over the next few years, the construction was inconsistent. A group of buyers formed the Belvedere Welfare Association in 2019, and 80 of them filed an application at the NCLT in September 2021, seeking a resolution for the delayed possession.

The NCLT accepted the petition in June this year and appointed an IRP. The builder approached the NCLAT on July 3 and pleaded that the insolvency proceedings be reversed. On July 7, the NCLAT temporarily stayed the formation of the committee of creditors (CoC).

On July 12, an agreement on the terms and conditions of the construction was signed between homebuyers, the developer and Eka Life Services, a finance creditor.

On July 25, the NCLAT reversed the insolvency proceedings and laid down some conditions. According to them, flats under Phase I of the project must be completed by January 2025 while the next phase, including the common areas, should be ready by January 2026.

Sequel Buildcon will have to cooperate with the IRP and arrange for an interim finance amount of Rs 75 crore through Eka Life Services. Alternatively, it can arrange for the funds from its own sources within six to nine months. Additionally, the developer must deposit Rs 20 crore into the Rera-approved escrow account within 30 days of the NCLAT order.

The IRP will oversee that the construction is carried out in keeping with the agreement’s terms and conditions. A status report will have to be submitted to the tribunal after eight weeks.

Vikram Chawla, a treasurer in the Belvedere Welfare Association, said, “If this amicable arrangement under the NCLAT’s supervision is successful, it could serve as a reference point for settling disputes in other real estate projects.”

Rajiv Kumar Pandey, who heads the association, said, “Homebuyers have undergone immense mental and financial stress while seeking possession of their flats. We have now decided to grant the builder a final chance to complete the project under the tribunal’s supervision. We hope this resolution will help the project’s completion and benefit all the stakeholders involved.”