Ansal Properties and Infrastructure saves itself from insolvency, for now
New Delhi: In an interesting turn of events, The National Company Law Appellate Tribunal (NCLAT) has overruled (set aside) insolvency proceedings against beleaguered Ansal Properties and Infrastructure Ltd. The NCLAT ordered that the management of the realty firm be handed back to its board.
The court said in its order that a decree holder is not equivalent to a financial creditor and hence cannot trigger insolvency proceedings against any company. NCLAT set aside the orders of National Company Law Tribunal (NCLT) in the matter of insolvency of Ansal API. In March 2020, the NCLT had directed to start insolvency proceedings against the realty player. It had also directed for appointed an interim resolution professional who would replace the board of the company.
The NCLT had ordered such a thing after a petition was filed before it by two home buyers who had jointly bought a flat ‘Sushant Golf City’ project being developed by Ansal API. The NCLT admitted the insolvency petition against the realty company based on the recovery certificate that was issued by Uttar Pradesh Real Estate Regulatory Authority (UP RERA) to the home buyers.
But the NCLAT rues that the home buyers were mere decree holders and not financial creditors. In order to initiate insolvency against a company, a person has to be a financial creditor of the company against which he/she is moving the insolvency petition.