Rita Malhotra Vs Orris Infrastructure Pvt. Ltd. (NCALT Delhi)
In a recent ruling, the National Company Law Appellate Tribunal (NCLAT) in Delhi addressed the critical issue of whether financial creditors, who are allottees under the Real Estate (Regulation and Development) Act (RERA), must meet specific threshold criteria to file a Section 7 application under the Insolvency and Bankruptcy Code (IBC). The case, Rita Malhotra Vs Bina Chopra, sheds light on the intricate interplay between RERA and IBC, and the conditions under which allottees can initiate corporate insolvency resolution proceedings.
Background of the Case
The appeal, filed under Section 61 of the IBC by the appellant Rita Malhotra, emerged from an order dated 19.09.2023 by the National Company Law Tribunal (NCLT), Principal Bench, New Delhi. The NCLT had dismissed the Section 7 application filed by the appellants to initiate Corporate Insolvency Resolution Process (CIRP) against Orris Infrastructure Pvt Ltd, the corporate debtor. The appellants were aggrieved by the dismissal and sought recourse through the NCLAT.
Appellants’ Submissions
The appellants, represented by Shri Rajat Malhotra, argued that Orris Infrastructure Pvt Ltd was developing a commercial complex known as Floreal Tower in Gurgaon. They had entered into a Memorandum of Understanding (MOU) with the corporate debtor on 24.04.2010 for providing Monthly Assured Return (MAR). According to the MOU, MAR was to be paid for 36 months after the completion of the building or until the office space was leased out, whichever was earlier.
