NCLT Delhi Approves Ace Infracity’s Resolution Plan For Three C Homes; Development Work Of ‘Lotus City’ To Conclude Within 24 Months

The National Company Law Tribunal (“NCLT”), New Delhi Bench, comprising of Shri Bachu Venkat Balaram Das (Judicial Member) and Shri Atul Chaturvedi (Technical Member), while adjudicating a petition filed in Mr. Arun Kumar Sinha v M/s Three C Homes Pvt. Ltd., has approved the resolution plan of M/s. Ace Infracity Developers Pvt. Ltd. for Three C Homes Pvt. Ltd. The Resolution Plan is valued at Rs. 140 Crores (approx.).

Ace Infracity has proposed to complete the development of plots in ‘Lotus City’ project and hand them over to allottees within a period of 24 months. Further, Ace Infracity would also seek RERA re-registration of ‘Lotus City’ project for completion of work.

BACKGROUND FACTS

M/s. Three C Homes Private Limited (“Corporate Debtor”) is engaged in business of real estate development and has developed a residential project namely ‘Lotus City’ near the Yamuna Expressway in NOIDA. For the purpose of developing the said Project, the Corporate Debtor had taken land on lease from the Yamuna Expressway Industrial Development Authority (“YEIDA”). The land so leased was acquired by YEIDA from the farmers.

Mr. Arun Kumar Sinha (“Financial Creditor”) filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 (“IBC”), seeking initiation of Corporate Insolvency Resolution Process (“CIRP”) against the Corporate Debtor. In 2019, the Corporate Debtor was admitted into CIRP.

M/s. Ace Infracity Developers Pvt. Ltd. (“Successful Resolution Applicant/SRA”) submitted a resolution plan for the Corporate Debtor, which was approved by the Committee of Creditors (“CoC”) with 100 per cent voting share.

The Fair value of the Corporate Debtor is Rs. 600 Crores (approx.) and Liquidation value of the Corporate Debtor is Rs. 480 Crores (approx.).

OVERVIEW OF THE RESOLUTION PLAN

The Resolution Plan is valued at Rs. 140,39,27,000/-. No claims have been received from the operational creditors and hence they have been paid NIL under the plan.

The Promoters and related parties of the Corporate Debtor had claimed amounts given as loan to the Corporate Debtor. However, no loan agreement or supporting document could be furnished for verification of claims. Therefore, the resolution plan classified such claims as “other claims”. The “other claims” are not be paid out of the resolution plan, but will be settled in accordance with law.

With regard to Farmer’s Compensation, the SRA is offering 100% of principal of farmer’s compensation (Rs. 71.66 Crores) which is included in Rs. 173.46 crores agreed to pay to YEIDA.

Further, the SRA has undertaken to complete the development work of the plots in the Lotus City Project and hand over the units to the allottees. The Resolution Plan is valid for a period of 24 months for closure and handover. Also, the SRA will seek RERA re-registration of the Project for completion of work.

OBJECTIONS BY YEIDA

YEIDA had executed Lease Deed in favour of Corporate Debtor for approximately 100 acres of land. The Corporate Debtor had failed to meet its payment obligations with respect to Lease Rent, Land Premium, and additional compensation payable to farmers from whom the land in question was acquired.

YEIDA objected to the plan submitted by the SRA, since the plan proposed a pay merely Rs. 67.12 Crores as against the total dues of Rs. 506 Crores in terms of the Lease Deed. Further, the Resolution Plan permits the Resolution Applicant to develop, exploit and profiteer from public asset without having to bear any burden, which is prejudicial to the public interest.

NCLT VERDICT

The Bench rejected the objections raised by YEIDA and held that despite no claims being filed, the resolution plan includes adequate provision with respect to objections raised by YEIDA.

It was observed that the resolution plan being voted with 100 per cent voting share of CoC in its commercial wisdom does not warrant any interference.

Accordingly, the Bench has approved the resolution plan of Ace Infracity Pvt. Ltd. for the Three C Homes Pvt. Ltd.

Case Title: Mr. Arun Kumar Sinha v M/s Three C Homes Pvt. Ltd.

Case No.: IB-432(ND)/2019

Counsel for RP: Mr. Rishabh Jain, Adv. along with Mr. Gaurav Katiyar, RP in person.

Counsel for YEIDA: Mr. Amar Gupta, Mr. Aniket Aggarwal, Mr. Pravan Tanwar, Advs.

Counsel for RA: Mr. Gopal Jain, Sr. Adv., Mr. Abir Roy, Mr. Vivek Pandy, Mr. Aman, Ms. Sukanya, Advs.

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