Raheja Developers failed to make the payment, faces insolvency proceedings.

By Abhay Shah, Realty Quarter

Raheja Developers, a Delhi-based builder, is in a situation of insolvency as per Section 9 of the Insolvency and Bankruptcy Code 2016, which has been ordered by the National Company Law Appellate Tribunal (NCLAT) to acknowledge the case.

In a complaint lodged by an operational creditor, Ahluwalia Contracts (India), the appellate tribunal has revoked a previous order. The adjudicating body, the National Company Law Tribunal, New Delhi, previously refused the request of Ahluwalia Contracts because the complaint was covered by “disputed claim,” and the arbitration proceeding was launched. The issue concerns an unpaid amount of Rs 6.51 crore.

The appellate court, however, ruled that the existence of the disputed claim cannot be a reason to dismiss an application under section 9 of the IBC if the conflict did not arise previous to the issuance of the request notice. Ahluwalia Contracts shifted the NCLT after the promoter failed to settle despite several notices of request for its outstanding dues relating to the work performed by the firm.

Raheja had opposed this with his statement that the issue of work and payments was in conflict and that arbitration was already underway. Shashank Garg, advocate for Ahluwalia contracts in the dispute said: “This is a landmark judgment that will also assist creditors much more clearly when a debtor has only a dispute with the amount of claim and not with the existence of a claim.”

A spokesperson from Raheja Developers said, “We have enormous claims on Ahluwalia because of the delays and bad construction/service on their portion in the project that outweighs their claim. We’re in arbitration already for the same.”