The CIRP of ‘La Residentia Developers’, as parties enter settlement, stayed by NCLAT Delhi

The National Company Law Appellate Tribunal (“NCLAT”), Delhi Principal Bench in the case Amrapali LA-Residentia Flat Buyers Welfare Association (ALRFBWA) v LA Residentia Developers Pvt. Ltd. & Anr, the bench comprising of Justice Ashok Bhushan (Chairperson), Justice M. Satyanarayana Murthy (Judicial Member) and Mr. Naresh Salecha (Technical Member) observed while adjudicating an appeal filed and has stayed the Corporate Insolvency Resolution Process (“CIRP”) of LA Residentia Developers Pvt. Ltd. as parties have entered settlement. Further, the bench has directed the Interim Resolution Professional to not take any further steps in the CIRP. On 07.07.2022, the order was passed. Facts of the Case: The Corporate Debtor, LA Residentia Developers Pvt. Ltd is a real estate developer with residential and commercial projects situated in Greater Noida and one of its prime projects being the Amrapali La Residentia.

The Operational Creditor, Singhal Pipes Pvt. Ltd, in 2017 had 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. In 2020, the Operational Creditor had filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (“IBC”) before the NCLT New Delhi (“Adjudicating Authority”), the application 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, However, Mr. Naveen Kumar Jain was appointed as the Interim Resolution Professional. The Suspended Board Of Directors of the Corporate Debtor had filed an application in June, 2022 before the Adjudicating Authority, application filled for seeking termination of CIRP under Section 12A of IBC as Parties had entered settlement. Further, it was submitted that the IRP had not co-operated in filing of the application under Section 12A for withdrawal of the proceedings.

On 17.06.2022, the Adjudicating Authority had issued notice to the IRP in the matter. NCLAT Proceedings: An appeal was filled before the NCLAT by Amrapali LA-Residentia Flat Buyers Welfare Association (ALRFBWA) and the same was allowed by NCLAT bench. However, 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 and the settlement was communicated to the IRP and had also submitted Form-F. The IRP had been restrained by bench from taking any further steps in the CIRP of the Corporate Debtor.