Tribunal Grants Extension for Project Completion, Emphasizes Stakeholder Cooperation

The Tribunal allowed the application seeking an extension of timelines, providing a revised schedule for the completion of the project. It emphasized the need for cooperation among all stakeholders to ensure the project's completion and mitigate the hardships caused by the pandemic. The Tribunal reiterated that non-compliance with the extended timelines would result in the forfeiture of the promoter's investments and the completion of the insolvency resolution process by the Adjudicating Authority. The Tribunal extended the timelines as proposed, with specific dates for the completion of various project milestones and financial contributions.

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Issues Involved: Reverse Corporate Insolvency Resolution Process, COVID-19 pandemic impact, extension of timelines, compliance with previous orders, financial contributions by stakeholders.

Issue-wise Detailed Analysis:

1. Reverse Corporate Insolvency Resolution Process (RCIRP):
The judgment highlights the introduction of the RCIRP concept by the Appellate Tribunal in the case of "Flat Buyers Association Winter Hills 77, Gurgaon vs. Umang Realtech Private Limited". This process involves allottees/home buyers as stakeholders and allows promoters to act as financial creditors to complete real estate projects. The IRP was directed to collate claims and seek approval from allottees for investment by the promoter as an outsider financial creditor. This approach aimed to resolve insolvency without relying on third-party resolution plans and was deemed successful in previous cases.

2. Compliance with Previous Orders:
The judgment reviews the compliance with the directions issued in the order dated 5th February 2020. The promoter, Rajesh Goyal, was directed to cooperate with the IRP and disburse funds as a lender, not as a promoter. Specific timelines were set for the completion of flats, internal fit-outs, and common areas, as well as for the refund of amounts to allottees seeking refunds. However, it was noted that these directions were not fully complied with, as indicated by Indiabulls Commercial Credit Private Limited in a tabular form, showing non-compliance with investment and construction timelines.

3. Impact of COVID-19 Pandemic:
The judgment acknowledges the unprecedented impact of the COVID-19 pandemic, which led to nationwide lockdowns, financial crises, and disruption of construction activities. This situation necessitated a reconsideration of the timelines set in the previous order. The promoter sought an extension of 11 months beyond the original timelines due to these altered circumstances.

4. Extension of Timelines:
The Tribunal considered the submissions from various stakeholders, including financial creditors, home buyers, and the IRP. The IRP suggested a phased approach to complete and handover specific towers, while financial creditors like IIFL Home Finance Limited indicated their willingness to extend further loans. The Tribunal decided to extend the timelines as proposed by the promoter, considering the impact of the pandemic and the need to safeguard the interests of all stakeholders.

5. Financial Contributions by Stakeholders:
The judgment discusses the financial contributions required from various stakeholders. The promoter was directed to infuse additional funds, and financial creditors like IIFL Home Finance Limited were asked to release funds as per their commitments. The home buyers were also required to deposit the balance amounts by the extended timelines.

Conclusion:
The Tribunal allowed the application seeking an extension of timelines, providing a revised schedule for the completion of the project. It emphasized the need for cooperation among all stakeholders to ensure the project's completion and mitigate the hardships caused by the pandemic. The Tribunal reiterated that non-compliance with the extended timelines would result in the forfeiture of the promoter's investments and the completion of the insolvency resolution process by the Adjudicating Authority.

Final Directions:
The Tribunal extended the timelines as proposed, with specific dates for the completion of various project milestones and financial contributions. It directed the Resolution Professional to report compliance and allowed home buyers to approach the Tribunal with any grievances. The application for extension was disposed of accordingly.

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