Realty firm Emaar MGF Land will appeal against an NCLT order to start insolvency proceedings against the company after two homebuyers filed a petition over huge delay in delivery of their housing units, sources said.
The appeal will be filed before the National Company Law Appellate Tribunal (NCLAT), they added.
In 2005, Dubai-based Emaar Properties entered the Indian real estate market in partnership with India’s MGF Group and invested Rs 8,500 crore in the joint venture firm Emaar MGF Land Ltd. However, in April 2016 it decided to end the 11-year old JV.
In January 2018, the National Company Law Tribunal (NCLT) approved the proposed demerger scheme of Emaar MGF Land, paving the way for two JV partners to go separate ways. The demerger process got completed in July last year.
Admitting the pleas of the two homebuyers of Emaar MGF Land, a two-member bench headed by NCLT President Justice M M Kumar appointed Manoj Kumar Anand as the interim resolution professional (IRP) of the company and directed him to make a public announcement about the bankruptcy proceedings.
The two homebuyers — Neeraj Gupta and Arti Jain — had purchased flats at its ‘Palm Greens’ project at KherkiDaula in Gurugram. The real estate firm failed to deliver the project within 36 months (June 2015). The developer also failed to refund the amount along with the interest.
Thereafter, the petitioners approached the NCLT seeking relief.
In its order dated January 24, NCLT said: “The applicant financial creditor (homebuyer) has disbursed the money to the respondent corporate debtor (Emaar MGF Land) as consideration for purchase of the residential flat. Though a considerable long time has lapsed, even the principal amount disbursed has not been repaid by the respondent corporate debtor as per the provisions of the flat buyer’s agreement.”
It further said: “It is accordingly held that respondent corporate debtor has committed default in repayment of the outstanding financial debt … accordingly, the present application is admitted.”
The tribunal also directed the company, its erstwhile directors, promoters or any other person associated with Emaar MGF Land to extend every assistance and cooperation to the IRP.
Post-demerger, Emaar India, part of Emaar Properties, has about 4,500 acres of land bank across the country.
In August, Emaar India’s CEO Prashant Gupta had said that the company would complete all delayed projects, comprising around 10,000 units, by the end of 2019 and has secured fund as well as ramped up workforce for execution. The company needed about Rs 800-1,000 crore to construct these units. It is currently developing projects in Gurugram, Jaipur, Lucknow, Mohali and Chennai.
Source: Economic Times