Construction work to continue in ATS Knightsbridge project :NCLAT

The National Company Law Appellate Tribunal (NCLAT) has said construction work at ATS Group’s Knightsbridge project may be carried out under the interim resolution professional (IRP) until further directions.

NCLAT permitted construction to continue under the supervision of retired judge justice Sunil Gaur, utilising real estate regulatory authority (RERA) funds.

“The corporate debtor being a real estate company, we are of the view that the interest of the homebuyers are to be protected…We issue notice in both the appeals and grant three weeks’ time to file reply to the respondents,” said NCLAT in an order issued on May 11.

The NCLAT said the appeal filed by suspended director of the corporate debtor (ATS Group) submits that the ATS shall extend all assistance for carrying out the constructions.

“In the meantime... no further steps shall be taken in the CIRP (corporate insolvency resolution process) except the construction to be carried out under the IRP under the supervision of justice Sunil Gaur,” said order delivered by justice Ashok Bhushan, chairman, NCLAT, and Barun Mitra, member (technical) and Arun Baroka, member (technical).

“RERA funds which are earmarked for the construction of the project, under the instructions of the IRP and other signatories, may be used for construction. Financial creditors also to extend co-operation for release of fund,” said the order.

In April 22, 2014, the National Company Law Tribunal (NCLT) started corporate insolvency resolution process (CIRP) against ATS Knightsbridge in Sector 124.

The NCLT appointed an IRP after the ATS failed to pay dues on time.

ATS Heights Private Limited allegedly defaulted in payment of ₹285 crore and ₹47 crore to the lender, thus inviting the CIRP action.

“For reasons stated therein, the application is allowed and the name of newly proposed interim resolution professional (IRP) Gaurav Katiyar... is taken on record,” the NCLT bench headed by justice Ashok Kumar Bhardwaj said on April 22, 2024.

“The prayer made in the captioned petition is that the construction work should not be hampered and homebuyers should not be adversely affected. We have already passed an order in this regard i...Nevertheless, it is further directed that the IRP ensure that the project continues and construction work is not hampered,” said the order.

ATS promoter Getamber Anand argued that there was no default on the company’s part because ₹285 crore or ₹47 crore was not a ”debt” but an “equity”.

But the NCLT started the CIRP considering the default commissioned by the realty company.

“Thus, even the non-payment of a part of debt when it becomes due and payable will amount to default on the part of a corporate debtor...” said order.

Also Read: ATS Knightsbridge housing project in Noida faces corporate insolvency resolution process

The ATS Group had in 2012 bought 11.5 acres for ₹604 crore from another Noida based realty firm Logix Group. The developer was supposed to develop 60% commercial and 40% residential property on this land located along Noida-Greater Noida Expressway.

In May, 2016, Noida authority approved building and layout maps and allowed work to start. The ATS was supposed to develop residential property first -- five towers of 47 storeys -- and then the commercial property.

Also Read: ATS land allotment case: HC directs Noida authority to file counter affidavit

“We spoke to the entities, which have filed the petition to initiate the CIRP against our company. And we are happy that the matter is settled amicably. Therefore the CIRP will be stopped and plea may be disposed of in the next hearing,” said Getamber Anand, promoter, ATS Group.

The NCLAT has listed the matter on July 12, 2024 for disposal.

Also Read: 7 things real estate investors should keep in mind before buying property in Greater Noida and Noida