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The National Company Law Tribunal (NCLT) has taken a significant step by directing the initiation of insolvency proceedings against Delhi NCR-based real estate firm, Imperia Structures. In a recent development, the tribunal has appointed an interim resolution professional to oversee the proceedings.
The decision comes in response to a joint plea filed by 28 unit holders who invested in the Gurugram-based project known as 'Imperia Mindscape'. The NCLT, after a thorough examination of the records, has determined that Imperia Structures is in debt and has defaulted on an amount of Rs 36.79 crore due to its failure to provide the assured returns promised to its investors.
"The petition confirms that the corporate debtor is in default of a debt payment, and the default amount exceeds the minimum pecuniary threshold stipulated under section 4 (1) of the Code. Therefore, the petition to initiate Corporate Insolvency Resolution Process (CIRP) against Imperia Structures Limited is admitted," stated the NCLT.
In addition to initiating insolvency proceedings, the NCLT has appointed Gaurav Katiyar as the Interim Resolution Professional, effectively suspending the existing board of the realty firm. This decision was delivered on August 31, 2023.
Imperia Structures had launched the 'Imperia Byron/Mindspace' project in Sector-62, Gurugram, Haryana, in 2011, with the enticing promise of a 'guaranteed assured return' to its buyers. Under this scheme, buyers made upfront payments for their units, and the company committed to providing monthly assured returns until the units were leased out. After leasing, the corporate debtor would continue to pay assured rental income to the buyers.
However, Imperia Structures failed to uphold its end of the agreement, leaving unit holders in a state of financial distress. The buyers, represented by Piyush Singh of PSP Legal, argued that, as per the agreement's terms, possession of the units was supposed to be handed over within two years from the receipt of building plan approval, which was received on May 15, 2014. However, possession has still not been granted, causing significant financial setbacks for the investors.
The real estate developer argued that it had applied for the Occupation Certificate, which was granted on June 2, 2020, upon the project's completion. However, the NCLT rejected this argument, emphasizing that the assured returns promised to the investors fall within the definition of financial debt as per the Insolvency & Bankruptcy Code.
Furthermore, the NCLT noted that the corporate debtor had failed to complete the project in a timely manner, despite the investors' expectations, and had not obtained the Occupation Certificate or Completion Certificate. Imperia Structures also failed to lease out the units as promised, leading to a breach of the agreement and a significant financial default.
The NCLT concluded that the bank statements of the financial creditors provided clear evidence of Imperia Structures' failure to pay the assured returns, meeting the essential criteria for initiating insolvency proceedings under Section 7 of the IB Code.
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