In a first for Gautam Buddh Nagar district, a stuck project that faced insolvency due to a fund crisis, has received the occupancy certificate from the local authority and is now offering possession to buyers of more than 800 flats. The 18-acre project, RG Luxury Homes, in Greater Noida West was launched in 2010 with an initial deadline of 2014. Facing delays, the construction work was stalled in 2016 due to a fund crisis. In 2019, a group of homebuyers moved the National Company Law Tribunal (NCLT).
The phase 1 of the project with approximately 1,900 units was affected due to proceedings in NCLT since September 2019 but in February 2020 the NCLT issued a “reverse insolvency order”, directing the promoter of RG Group to complete it under the supervision of an insolvency resolution professional (IRP).
In October 2021, the promoter commenced the construction of the project again under the IRP’s supervision and secured occupancy certificates (OCs) from the Greater Noida Industrial Development Authority (GNIDA) in February for 854 flats in four towers, as it rolled out possession to homebuyers.
IRP Manoj Kulshreshtha said he came on board when another NCLT-appointed IRP left the project within two years.
“When I reviewed the project with my knowledge, it seemed it could be completed. It took efforts from all stakeholders and we had targeted an OC at an earlier date but the compliances as per requirement were also to be made sure of,” he said.
“The shortage of funds also posed a challenge at times. When a company faces insolvency and stress, no more funds get infused into it. Somehow that phase passed, and now we are in a stage where we have got OCs for four towers and working towards completing compliances of three more towers to get their OCs as well,” Kulshreshtha told PTI.
“We received the certificate recently and now have started giving possession to our customers,” RG Group Director Himanshu Garg said.
According to Uttar Pradesh Real Estate Regulatory Authority (RERA), 133 projects registered with it were in the NCLT by the end of February, while an official confirmed RG Luxury Homes was the first in the region to offer possession to buyers after reverse insolvency under which promoters are required to infuse funds to complete a project.
CREDAI, the apex body of real estate developers in the country, has also hailed the development, saying a single project might serve as a “beacon of hope” for the industry as a whole.
“Reverse insolvency is a tremendous leap of faith for the entire process to complete a project. The government, financial institutions, and legislative authorities need to consider this aspect and provide a special area for promoters who are having difficulty with NCLT but are committed to finishing the project and have strong backing from investors, allottees and other stakeholders,” CREDAI Western UP’s Secretary Dinesh Gupta told PTI.
Kulshreshtha, who is an IRP on multiple stuck projects in Karnal, Ghaziabad and Noida, said this project can serve as an example for other stuck projects.
