NCLT Initiates Insolvency Proceedings Against Raheja Developers Over Delayed Possession of Flats

In a significant development for the real estate sector, the National Company Law Tribunal (NCLT) has initiated insolvency proceedings against Raheja Developers, following a petition filed by flat buyers of the Shilas project in Gurgaon. The tribunal has directed the initiation of Corporate Insolvency Resolution Process (CIRP) after the realty firm failed to deliver the flats on time, despite receiving payments.

The petitioners, over 40 flat buyers, have alleged that they paid 95% or more of the total sale price for their units in the Raheja Shilas project, but the possession of the flats has not been handed over even after several extensions. The delay is reportedly in excess of four years, with possession originally expected between 2012 and 2014. The NCLT noted that the delay in delivery was not justified by the force majeure clause, which Raheja Developers had claimed was responsible for the delay. The tribunal rejected this defense, emphasizing that the difficulties faced by the company, including its litigation with government authorities, were not unforeseeable and should not be used to absolve the company of its responsibility.

The NCLT has appointed Manindra K Tiwari as the Interim Resolution Professional for Raheja Developers as insolvency proceedings move forward. Raheja Developers, however, defended the delay, claiming that it was due to issues beyond its control, which they argued were covered under the force majeure clause in the agreement.

The total default amounts to Rs 112.90 crore, according to the buyers, who have demanded the delivery of their units. This is not the first time Raheja Developers has faced such issues; similar insolvency proceedings were initiated in 2019 over delays in the Raheja Sampada project but were later set aside.