Possession Delay NCLT

NCLT

" Possesion Delay NCLT. "

Notice for possession dealy - NCLT.

₹ 999/- (Consultancy Only)

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2 Lakhs

Happy Customers

300+

Professionals

250+

Partners

₹ 999/- (Consultancy Only)

We'll never share your email with anyone else.

2 Lakhs

Happy Customers

300+

Professionals

250+

Partners

 
 

How it Works ?

 
 

Briefing of Facts/Case/Suit

We Ask You to Brief your case facts to prepare for filing.

 

Drafting & Filing Facts/Case/Suit

We make draft of your case and do the filing process.

 

Litigation Process Facts/Case/Suit

We prepare for court trial process to appear before court to present facts.

 
 
 

What is possesion Delay NCLT?

 

If the important estate company is in poor economic condition and is unable to continue or finish the concerned land project, home-buyers can initiate insolvency proceedings within the National Company Law Tribunal.

Before initiating insolvency proceedings, sending a legal notice to the builder is a final warning. just in case a settlement remains not reached, you ought to then file the appliance for initiating insolvency process.

 

Documents Required?

 
  1. Application for buying of property in the Project.
  2. Builder-Buyer Agreement.
  3. Receipts/Proof of payments made to the builder.
  4. Letters/ email correspondences between the Buyer and the Builder.
  5. Brochure of the Project.
  6. Letter of Allotment.
 
 

Procedure or Steps Involved in Proceedings against the Real Estate Company

 

Step 1

FILING OF COMPLAINT

The application will be filed before the NCLT within 3 working days of approval of the draft.

 

Step 2

ADMISSION HEARING

The lawyer will make preliminary arguments before NCLT and get the Application admitted.

 

Step 3

APPOINTMENT OF RESOLUTION PROFESSIONAL (RP)

NCLT will confirm a Resolution Professional to oversee the process.

Step 4

CORPORATE INSOLVENCY RESOLUTION PROCESS

The resolution process comprises of various stages: 1) Publication of notice 2) Processing of claim 3) Information Memorandum 4) Meeting of Committee of Creditors (COC) 5) Call for resolution plan.

Step 5

ACCEPTANCE/REJECTION OF RESOLUTION PLAN

After receiving the resolution plan, the RP will conduct a meeting of COC for voting. If 66% of voting is done in favour of a resolution plan, then it will be adopted by COC.

 

Step 6

LIQUIDATION

In case where a resolution plan is not accepted, COC will opt for liquidation of such real estate company.

     
 

FEE STRUCTURE

 
  • • You are required to pay 70% of the case fee to start the work
  • • 30% is payable after getting the final order
 
 

FAQ

 

The National Company Law Tribunal follows the Insolvency and Bankruptcy Code, 2016. It's a quasi-judicial body set up under section 408 of the Companies Act, 2013 with the authority to adjudicate the insolvency Process for both Companies and LLPs (Limited Liability Partnerships).

Major Functions of NCLT:
  • • Power to cancel registration or dissolve a company
  • • Investigate the affairs of the company
  • • Freeze assets of a company
  • • Render liability to promoters
  • • Change the liability from limited to unlimited
  • • Address shareholder grievances on the rejection of companies in transferring shares and securities
  • • Can take class actions suits for depositors who are seeking remedy for the omissions and acts on part of the company

You have to submit a plea for insolvency to NCLT against the company. You will get a response from NCLT within 14 days; they will either accept or reject your plea. After NCLT accepts your plea, they will appoint an IRP(Interim Resolution Professional. The IRP will draft a resolution plan. The IRPs are giving a 180 days time-frame which can be extendable by 90 days to come up with a resolution plan. The court initiates a corporate Insolvency Resolution process once IRP submits the resolution plan.

During the period of an insolvency proceeding,

  • • the board of directors of the company stands suspended,
  • • and the promoters do not have a say in the management of the company.
The IRP, if required, can seek the support of the company’s management for day-to-day operations. In case the Corporate Insolvency Resolution Plan (CIRP) fails to revive the company, NCLT will initiate a liquidation process.

Step 1 - Send a legal notice to your developer mentioning the delay. You can hire a lawyer to help you with the process. The legal notice should make it clear that you are approaching NCLT as a financial creditor if your flat is not delivered in a specified time limit.

Step 2 - If you do not hear from the developer or they fail to the owner the commitment, reach out to NCLT bench under which your jurisdiction falls.

Step 3 - File an insolvency plea against the developer’s company. Once your plea is accepted, the IRP process would start.

The Government of India amended the Indian Bankruptcy code to allow homebuyers to be treated as financial creditors under section 7. As a home buyer, you have a right to have a representation in the committee of creditors, your authorized representatives can vet the IRP or recommend the removal of company management. A total of 1800+ cases have been filed against errant developers under this code.

As per section 432 of the Companies Act, 2013, You can appear in person or authorize a

  • • Chartered accountant,
  • • Company secretary,
  • • Cost accountant,
  • • or a legal practitioner (Lawyer) to present your case before both NCLT and NCLAT

Both RERA and NCLT are fast track courts. You should approach RERA if you want the developer to complete the project in time and get a compensation for the delay. If you are looking for a refund of the amount you paid alongwith interest then approach NCLT. NCLT orders are binding in nature; non-execution at developer’s end can force them toward liquidation and insolvency. The execution powers of RERA is still not clear. In many instances, developers has not followed RERA instructions and homebuyers are clueless on what to do.

The buyer can mention in their application that he/ she wants the property only as per the terms set out in the allotment letter. As a primary objective, the Resolution Professional overseeing the insolvency resolution process will try to ensure that the development of the project continues.

As per the provisions of Insolvency and bankruptcy code, 2016, homebuyers are considered to be financial creditors of the builder company. The investment made by a home buyer is considered a debt given to the builder. In cases of delay of possession, a homebuyer, being a financial creditor can file an application before NCLT to initiate insolvency proceedings against the builder. The procedure provided by the code is a time-bound procedure and hence, it provides a time-bound remedy to the homebuyers.

If you builder/developer has delayed the possession of your property for an unreasonable amount approach RERA or NCLT. Here are the steps you can follow in this case:
  • 1.
  • Consult with a legal expert to decide which forum to choose depending on your objectives (You want a refund/Quick delivery of flats/compensation for the delay)
  • 2.
  • If your project is small and the developer is working on it, albeit at a slow pace, you should avoid approaching NCLT. If the insolvency process starts all projects will be affected
  • 3.
  • Based on your objective a legal expert can suggest you the right forum
  • 4.
  • Once you have decided on the forum, send a legal notice to the developer asking them to take rectifying steps otherwise face the legal consequences
  • 5.
  • If the developer is responsive enough, they will get in touch with you and rectify the situation. If not, you may need to proceed with the case
  • 6.
  • Ask your legal expert to prepare your drafts according to the forum of your choice

Here are the steps involved in filing a complaint in NCLT

Step 1 - Issue a demand notice and a Notice for initiation of insolvency proceedings through a competent lawyer

Step 2 - Gather all facts about the case such as details of promoters of the company, proof of payments, bank loans, etc

Step 3 - Go to NCLT website

Step 4 - Click on Applicant Corner

Step 5 - Sign up as a new user/ create an individual account

Step 6 - Enter basic details and verify both your mobile number and email id via OTP

Step 7 - Once you have successfully logged in, you can e-file your complaint against the builder

You should approach NCLT under the following conditions-

1. When the possession is delayed beyond reasonable limits

2. When your builder is not responding to any of your communications

3. In case you see that banks and other entities are approaching NCLT against your builder

4. In conditions where you think that a swift binding order is required to secure your investment

5. In case you are looking for a refund of your money along with the interest

Assured return in real estate transactions is the fixed monthly return given by the builder on the amount invested by a buyer, usually payable until he receives possession of his flat. The assured return factor became crucial while deciding the financial creditor status of homebuyers.

Assured returns are a form of an investment by the buyer to the builder. As per the National Company Law Appellate Tribunal (NCLAT), the home-buyers were "investors" who were investing in a "committed return plan" whereas, the builder agreed to pay a monthly committed return to their Investors. It was also held by the Court that committed returns would be in the nature of "debt" under Insolvency and Bankruptcy Code.

Recently, home-buyers have been recognised as financial creditors under the Insolvency and Bankruptcy Code, 2016 (IBC). Pursuant to this recognition, in case the builder fails to pay promised "assured returns", home-buyers can approach the National Company Law Tribunal to initiate insolvency proceedings against the builder under the IBC. NCLT has been bestowed with power to sell the assets of the builder to repay the aggrieved investors.

Recently, home-buyers have been recognised as financial creditors under the Insolvency and Bankruptcy Code, 2016 (IBC). Pursuant to this recognition, in case the builder fails to pay promised "assured returns", home-buyers can approach the National Company Law Tribunal to initiate insolvency proceedings against the builder under the IBC. NCLT has been bestowed with power to sell the assets of the builder to repay the aggrieved investors.

A person who has taken a loan from a financial institution must continue to pay their Equated Monthly Installments (EMIs) in accordance with the loan agreements irrespective of any insolvency proceedings.

No. NCLT order can be challenged in NCLAT as per the IBC code. However, in its december 2019 judgement, the Supreme Court of India ruled that,"If an NCLT order falls under the realm of public law, i.e. if it affects the general public at large, the high court can exercise its power under article 226 of the constitution”.

Major Functions of NCLT:
  • • Power to cancel registration or dissolve a company
  • • Investigate the affairs of the company
  • • Freeze assets of a company
  • • Render liability to promoters
  • • Change the liability from limited to unlimited
  • • Address shareholder grievances on the rejection of companies in transferring shares and securities
  • • Can take class actions suits for depositors who are seeking remedy for the omissions and acts on part of the company

You should approach NCLT under the following conditions-
  • 1. When the possession is delayed beyond reasonable limits
  • 2. When your builder is not responding to any of your communications
  • 3. In case you see that banks and other entities are approaching NCLT against your builder
  • 4. In conditions where you think that a swift binding order is required to secure your investment
  • 5. In case you are looking for a refund of your money along with the interest

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