Relief for Buyers as NCLT Approves Withdrawal of Insolvency

31 May 2023 CW Team

An approximately ten-year wait for over 800 individuals who purchased flats in Sidhartha Estella in Sector 103 and Sidhartha NCR One/Greens in Sector 95 is likely to come to an end soon.

In an order dated 24th May, the New Delhi bench of the National Company Law Tribunal (NCLT) approved the withdrawal of insolvency proceedings against the developer, Sidhartha Buildhome, and directed the establishment of a committee chaired by a Supreme Court judge within two weeks to oversee the timely completion of the projects. The appointment of the Supreme Court judge will receive final approval from the NCLT.

The order stated that the developer must hand over flats to the buyers in Sidhartha NCR One/Greens within six months and to the buyers in Sidhartha Estella within twelve months.

The projects were launched in 2010-11 and were initially scheduled for completion in 2014-15. By 2014, when construction came to a halt, most homebuyers had already paid over 95% of the flat costs.

Siddhartha Buildhome entered insolvency in March 2021. After two years of legal proceedings, the developer recently proposed a plan to finish the projects, which the NCLT approved in the order dated 24th May.

In the order, NCLT technical member Atul Chaturvedi and NCLT judicial member Bachu Venkat Balram Das stated, "We have reached the considered opinion that the resolution professional made an error and followed an incorrect method in vote counting. Therefore, we approve the developer's withdrawal proposal."

The order clarified that homebuyers are regarded as a single category for all purposes, whether it is for the approval of the resolution plan or for passing a resolution under Section 12A of the Insolvency and Bankruptcy Code, 2016.

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