NCLT directs to initiate insolvency proceedings against Imperia Structures, appoints IRP

The National Company Law Tribunal (NCLT) has directed to initiate insolvency proceedings against Delhi NCR-based realty firm Imperia Structures and has appointed an interim resolution professional.

Admitting a joint plea filed by 28 unit holders of its Gurugram-based project 'Imperia Mindscape', the insolvency tribunal said after examining the records, it is clear that there is a debt and a subsequent default by the realty firm for an amount of Rs 36.79 crore as it could not provide assured returns as promised.

"The petition establishes that the corporate debtor is in default of a debt due and payable and that the default is for an amount which is more than the minimum amount of pecuniary threshold stipulated under section 4 (1) of the Code. The instant petition... for initiating CIRP against Imperia Structures Limited, the corporate debtor, stands admitted and CIRP of Imperia Structures Limited is initiated," said NCLT.

NCLT has also appointed Gaurav Katiyar as Interim Resolution Professional suspending the board of the realty firm, in its order delivered on August 31, 2023.

Imperia Structures launched 'Imperia Byron/Mindspace' project at Sector- 62, Gurugram, Haryana along with a "guaranteed assured return" in the year 2011.

Under this scheme, buyers paid upfront sale consideration for the units booked, and the realty firm undertook to make payment of the monthly guaranteed assured return till the units were leased out after that, the corporate debtor would pay assured rental to the buyer upon leasing of the unit to the intended tenant.

However, the realty firm defaulted in terms of the agreements signed with the unit holders.

The buyers, who were represented by Piyush Singh of PSP Legal, submitted that as per clause 5 of the agreement, the possession of the units were to be given within two years from the receipt of building plan approval.

According to the petitioners, the building plan was received on May 15, 2014, and thus the possession was due by May 15, 2016, but till date, the possession of the units has not been handed over to the financial creditors.

The building plans were revised on July 14, 2019, and approved on August 22, 2019.

It was submitted that the builder has not only defaulted in crediting the amount due and payable to them but has also received the total amount towards the sale consideration of the units allotted from them. According to them, a default in payment of assured return has accrued with interest at 18 per cent, totalling a principal amount of Rs 36.79 crore.

However, the realty firm said at the conclusion of the construction of the said real estate project, it immediately applied for the Occupation Certificate, which was granted on June 2, 2020.

It also submitted that the petitioners, who have purchased the unit/virtual space for commercial gain, being mere speculative investors don't qualify to be financial creditors.

Rejecting it, NCLT said assured returns payable to the allottees of the real estate projects come within the ambit of financial debt as defined under the Insolvency & Bankruptcy Code.

"Hence in terms of the above judgment, in the present case, the applicants are not speculative buyers. Moreover, this application has been filed by the applicants as home buyers in terms of proviso to Section 7 of IBC, therefore they will be treated as allottees and will come within the definition of financial creditors," said NCLT.

The tribunal further observed that the buyer had made payment of the sale consideration upfront to the realty firm and its "liability of the corporate debtor to pay the monthly guaranteed assured return is recorded in the clauses of the MoUs".

"Further, the financial creditors had anticipated that the project would be completed in a time-bound manner as mentioned in the MoUs. However, even after the expiry of more than 10 years since the booking of the units, the corporate debtor has failed to complete the project in all respects and has even failed to obtain the Occupation Certificate and Completion Certificate till date," it added.

It is crucial to note that Imperia Structures has even failed to lease out the units to date and accordingly, it was liable to continue to pay the assured return, has not paid the assured returns to the financial creditors, and remains in gross default of the same, said NCLT.

"The fact that the corporate debtor has failed to pay the assured returns can be evidenced from the bank statements of the Financial Creditors, which is filed on record. Therefore, the second major essential ingredient of an application under Section 7 of the IB Code, there is a default with respect to the debt, stands substantiated," said NCLT.