Case Law Details
Surinder Aggarwal & Ors. Vs Raheja Developers Limited (NCLT Delhi)
The petition was filed on 12.04.2024 by 176 homebuyers under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) seeking initiation of the Corporate Insolvency Resolution Process (CIRP), declaration of moratorium and appointment of an Interim Resolution Professional against M/s Raheja Developers Limited in relation to its project “Raheja Revanta.” The Tribunal noted earlier insolvency proceedings involving other projects of the Corporate Debtor, including “Raheja Shilas” and “Krishna Housing Scheme,” and recorded that the NCLAT subsequently clarified that CIRP in those matters would remain project-specific while permitting allottees of other projects to pursue independent proceedings under Section 7.
According to the petitioners, the Corporate Debtor launched the Raheja Revanta project in 2011 and promised timely delivery of units. Allotment letters and Agreements to Sell were executed between 2011 and 2020. The agreements contemplated possession within 36 months for TAPAS floors and 48 months for SURYA Towers. The petitioners stated that they made payments amounting to ₹137,15,54,778.03, with many having paid 90–95% of the sale consideration, yet possession was not delivered. They further relied on HRERA orders dated 31.01.2023 directing refund with interest in favour of certain allottees, alleged non-compliance with those orders, and referred to Memoranda of Understanding in which the Corporate Debtor acknowledged delay, agreed to pay compensation and deliver possession, but allegedly failed to honour those commitments. The petitioners claimed that, as on 24.02.2024, the Corporate Debtor was liable to refund ₹137,15,54,778.03 together with interest of ₹75,69,71,441.73, aggregating ₹212,85,26,219.76. They also asserted that the project comprised 932 units and that the petition filed by 176 allottees holding 99 units satisfied the statutory threshold under Section 7.
The Corporate Debtor opposed the petition, contending that the delay resulted from circumstances beyond its control. It submitted that completion was hindered by delays in provision of external infrastructure such as roads, water supply, sewerage, electricity and approvals from government authorities, shifting of high-tension cables, revised zoning and building plan approvals, pending litigations relating to infrastructure and land acquisition, and regulatory proceedings. It relied upon contractual clauses stating that completion depended upon availability of infrastructure and that compensation was not payable for delays attributable to authorities. The Corporate Debtor further asserted that it had incurred approximately ₹1,119 crore on the project against collections of about ₹826 crore, that the project had reached a pre-finishing stage, that it was a solvent company with completed and ongoing projects, and that admission into CIRP would adversely affect approximately 40,000 homebuyers across its various projects.
In rejoinder, the petitioners disputed the claim that the project was substantially complete, relying on the Corporate Debtor’s own construction updates, photographs and other material to contend that several blocks remained incomplete or had not commenced. They argued that the Corporate Debtor was responsible for making arrangements for infrastructure, had failed to renew its licence due to outstanding EDC/IDC charges, filed proceedings against government authorities only after many years, and wrongly attributed delay to external agencies. They also alleged that the Corporate Debtor had received substantial project funds, created liens over certain units, failed to honour an undertaking regarding project completion, and maintained that pendency of proceedings before HRERA did not bar proceedings under Section 7 of the IBC.
The Tribunal examined the statutory framework under Sections 5, 6 and 7 of the IBC and the relevant definitions under the Real Estate (Regulation and Development) Act, 2016. It observed that the jurisdiction under Section 7 is confined to determining the existence of a financial debt and default. It found that the threshold requirement under the proviso to Section 7(1) stood satisfied since the petition was filed by 176 allottees in a project comprising 932 units. It also found that the amounts paid by the allottees constituted financial debt and that the Corporate Debtor had not disputed execution of the agreements or receipt of the consideration. Since possession had admittedly not been delivered within the contractual timelines, the Tribunal held that the petitioners had established both financial debt and default.
On the Corporate Debtor’s defence, the Tribunal held that the obligation to complete the project and deliver possession arose from the contractual commitments and that delays in external infrastructure did not extinguish the rights of the allottees. It observed that the project remained incomplete despite receipt of substantial amounts from customers, that HRERA orders had not been complied with, that settlement arrangements acknowledging delay were also not honoured, and that even the latest status report showed the project was still under construction. It concluded that the plea of force majeure was not applicable on the facts and held that the default was attributable to the Corporate Debtor.
The Tribunal further held that pendency of proceedings before HRERA, NCDRC or other fora did not bar maintainability of the Section 7 petition, noting that remedies under the IBC and RERA are concurrent. Referring to the NCLAT’s orders confining CIRP in the Corporate Debtor’s other projects to those respective projects, it concluded that any CIRP arising from the present petition should likewise remain confined to Project “Raheja Revanta.” Accordingly, the Tribunal admitted the Section 7 petition, initiated CIRP limited to Project “Raheja Revanta,” and ordered commencement of moratorium in relation to that project.
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