NCLAT Delhi Stays The CIRP Of 'La Residentia Developers' As Parties Enter Settlement

The National Company Law Appellate Tribunal ("NCLAT"), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Justice M. Satyanarayana Murthy (Judicial Member) and Mr. Naresh Salecha (Technical Member), while adjudicating an appeal filed in Amrapali LA-Residentia Flat Buyers Welfare Association (ALRFBWA) v LA Residentia Developers Pvt. Ltd. & Anr., has stayed the Corporate Insolvency Resolution Process ("CIRP") of LA Residentia Developers Pvt. Ltd. as parties have entered settlement. The Bench has directed the Interim Resolution Professional to not take any further steps in the CIRP. The order was passed on 07.07.2022. Background Facts LA Residentia Developers Pvt. Ltd. ("Corporate Debtor") is a real estate developer with residential and commercial projects situated in Greater Noida, one of its prime projects being the Amrapali La Residentia. In 2017, Singhal Pipes Pvt. Ltd. ("Operational Creditor") had supplied pipes, sockets, cement and allied products to the Corporate Debtor and the latter had failed to pay the outstanding bill amount of Rs. 28,07,764/- (inclusive of interest) despite several demand notices. The Operational Creditor in 2020 had filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 ("IBC") before the NCLT New Delhi ("Adjudicating Authority"), seeking initiation of CIRP against the Corporate Debtor. The Adjudicating Authority vide an order dated 25.05.2022 had admitted the Petition and initiated CIRP, Mr. Naveen Kumar Jain was appointed as the Interim Resolution Professional ("IRP"). In June 2022, the Suspended Board of Directors of the Corporate Debtor had filed an application before the Adjudicating Authority, seeking termination of CIRP under Section 12A of IBC as Parties had entered settlement. It was further submitted that the IRP had not co-operated in filing of the application under Section 12A for withdrawal of the proceedings. The Adjudicating Authority had issued notice to the IRP in the matter on 17.06.2022. Proceedings Before NCLAT Amrapali LA-Residentia Flat Buyers Welfare Association (ALRFBWA) filed an appeal before the NCLAT and the same was allowed. The NCLAT Bench directed the IRP to file an affidavit, explaining his conduct in not filing the application for withdrawal of the Section 9 Petition under Section 12A, when the parties had already settled, communicated the settlement to the IRP and had also submitted Form-F. The Bench has restrained IRP from taking any further steps in the CIRP of the Corporate Debtor. Case Title: Amrapali LA-Residentia Flat Buyers Welfare Association (ALRFBWA) v LA Residentia Developers Pvt. Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 704 of 2022 Counsel For Appellants: Mr. Abhishek Naik and Ms. Gulafsha Kureshi, Advocates. Counsel For Respondents: Mr. Naveen Kr. Jain and Mr. Kushal Bansal, Advocates for R-1. Mr. Abhishek Anand and Mr. Karan Kohli, Advocates for R-2. Mr. C.S. Gupta, Advocate for R-3 to 6. Mr. Janender Kumar Chumbak and Ms. Asmita Duggal, Advocates for Financial Creditors. Click Here To Read/Download Order

NCLAT Delhi Stays The CIRP Of 'La Residentia Developers' As Parties Enter Settlement

Pallavi Mishra

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