HDIL Insolvency: Homebuyers Move NCLT Seeking Transfer Of Housing Project To Subsidiary

The buyers of one of Housing Development Infrastructure Ltd.’s real estate projects in Mumbai has moved the National Company Law Tribunal seeking the project’s transfer outside the scope of a moratorium to expedite its completion.

More than 200 homebuyers from HDIL’s Majestic Towers in Mumbai have sought the tribunal’s approval to transfer the under-construction project to a wholly-owned subsidiary of the bankrupt developer. Such a transfer, the petitioners contend, would allow for faster completion of the project. Certain homebuyers have, however, opposed the transfer.

This comes after the National Company Law Tribunal had admitted an insolvency application filed by Bank of India in August last year, after the company failed to repay dues exceeding Rs 500 crore. The tribunal, which had imposed a stay on the formation of HDIL’s committee of creditors in September, lifted it in December.

The tribunal also allowed a plea by HDIL’s resolution professional for the exclusion of 106 days—between Sept. 3, 2019, to Dec.17, 2019—from the time-count spent in the corporate insolvency resolution process. This duration pertained to the stay imposed by the NCLAT on the formation of committee of creditors.

The Homebuyers’ Petition?

Rohit Gupta, the counsel representing a section of homebuyers in HDIL Majestic Towers, said that a carve-out of the project would facilitate speedy handover of housing units to homebuyers. He said that:

• Housing units in the project were charged in favour of Suraksha Asset Reconstruction Company, which has given its consent to the process.
• Homebuyers can utilise services of a third party and inject balance amount for completion.
• A recent judgment by the NCLAT has allowed for project-specific resolution process in insolvency of property developers. The carve-out of the project will be in line with this judgment.

Restraining Order Against Authorities

HDIL’s resolution professional moved the tribunal seeking direction against regulatory authorities, including the collector of tax and the Economic Offences Wing. The counsel representing the resolution professional said regulatory authorities have filed several complaints against the company in land registrar offices directing them not to register transfer of assets belonging to HDIL, which had hampered smooth implementation of the insolvency process.

The tribunal directed the registry to issue notices to the regulatory authorities. It will hear the homebuyer’s plea for carve-out of assets in March.