Wave Megacity Centre Private Limited Vs Rakesh Taneja & Ors. (NCLAT Delhi)
The National Company Law Appellate Tribunal (NCLAT), Delhi, dismissed the appeal filed by the corporate debtor challenging the NCLT order dated 06.06.2022, which had allowed applications under Section 65 of the Insolvency and Bankruptcy Code, 2016 (IBC) and dismissed the corporate debtor’s application under Section 10 of the Code.
The corporate debtor had obtained a 90-year lease from the Noida Authority in 2011, launched multiple residential and commercial projects, collected around 90% consideration from most homebuyers before 2016, but failed to complete construction or hand over possession. Following the Uttar Pradesh Project Settlement Policy, part of the project land was surrendered, revised demands were subsequently raised by the Noida Authority, and the corporate debtor filed an application under Section 10 of the IBC on 25.03.2021 seeking initiation of the Corporate Insolvency Resolution Process (CIRP) on the ground of default in payment of Noida Authority dues. Homebuyers filed applications under Section 65 alleging that the Section 10 application had been filed fraudulently and with malicious intent for purposes other than insolvency resolution.
The corporate debtor argued that debt and default stood established through the Noida Authority’s demand notices, the Section 10 application satisfied all statutory requirements, and CIRP would protect the interests of homebuyers. It further contended that pending litigations, criminal investigations, directors’ resignations and disputes regarding quantum of debt did not affect maintainability of the application. The Noida Authority and homebuyers opposed the application, asserting that it was filed to escape liabilities, prosecutions and pending proceedings, and that the conduct of the corporate debtor demonstrated fraudulent and malicious intent. They also raised objections regarding Section 10A of the IBC.
