The National Company Law Tribunal (NCLT) has dismissed the petition of Wave Mega City Center (WMCC) Private Limited had approached the tribunal under section 10 of the Insolvency and Bankruptcy Code to initiate the Corporate Insolvency Resolution Process (CIRP).
The tribunal had completed the argument and reserved the order on October 26, 2021.
“The tribunal has just pronounced the order. We evaluate the order and will approach the appropriate court for the next course of action. Our utmost priorities remain to protect the homebuyers interest, which we will continue to endeavour,” said a Wave group spokesperson.
Dismissing the application, the tribunal imposed a penalty of Rs one crore on the company and suggested the government initiate an investigation to protect the homebuyers’ money.
“This order will protect the interests of homebuyers allotees who were facing delays and will definitely curb the malicious intent of companies in general trying to misuse the insolvency resolution process under Insolvency and Bankruptcy Code, 2016. The investigation in the company’s affair will be crucial which will ensure and safeguard the amount invested in the project by the homebuyers allottees,” said SP Singh Chawla, Founder Advocate – CorpLit Consultants, Advocates & Advisors.
WMCC had invested more than Rs 3,800 crore in the project, including Rs 2,213 crore by its promoters and their associates, it said. Another Rs 200 crore had been raised as a bank loan, while buyers of units in the project had paid around Rs 1,400 crore.
Of this, more than Rs 2,000 crore had been paid to various government agencies, including around Rs 1,600 crore to the Noida authority.
WMCC is a special purpose vehicle for this project and it does not have any investment in any other group company.
It had acquired 6.18 lakh square meters (6.1 million sq ft) of land on a leasehold basis in 2011, spread between Sector 25 and 32 in Noida, for around Rs 6,622 crore.
The authority had taken possession of close to 4.5 million sq ft of that in 2017, citing default on payment by the developer. In February 2021, it cancelled the allotment of another 1 million sq ft for the same reason.
As per the original scheme, the repayment schedule was spread over 16 half-yearly instalments after a moratorium of two years. Each instalment included principal and scheduled interest.
The Supreme Court had earlier dismissed a petition by a homebuyer, who challenged the proceedings initiated by the developer for corporate insolvency before the NCLT.
