NCLT directs to initiate insolvency proceedings against realty firm Magic Info

The National Company Law Tribunal (NCLT) has directed to initiate insolvency against NCR-based real estate firm Magic Info solution after admitting the claims of three of its flat buyers. A two-member NCLT bench, comprising R Varadharajan and K K Vohra, has admitted the insolvency plea moved by three flat buyers who had bought units at 'Godrej Summit' project in Gurgaon, which has been developed by the company in partnership with Mumbai-based Godrej Properties.

According to the apartment buyer's agreement signed in 2013, the company was supposed to hand over the possession in 47 month from the date of respective allotment with a grace period of six months in 2017. However, after not getting possession, flat buyers terminated their agreement and demanded refund along with 15 per cent interest of Rs 4.64 crore.

This was contested by Magic Info, contending that delay in completion of the project was due to circumstances beyond its control and there was no delay from its part as possession letter was given in October 2017. Home buyers, which are now at par with the financial creditors after amendments in IBC, opposed it saying even though the possession letter was given, actual possession in the tower in which his unit was situated, was not given, prompted them to issue termination notice in 2019.

Homebuyers were represented through its counsel Piyush Singh. Agreeing with the buyer, NCLT said, "Physical possession of the property booked which is required to be handed over within the agreed period as between parties."

"Failure of the real estate developers in not handing over the possession of the property as agreed to between the respective parties is to considered as a default as envisaged under section 3 (12) of IBC," said the NCLT. It further said: "... We do not have any hesitation in admitting this petition and thereby initiating the CIRP in relation to Magic Info Solutions."

The tribunal has also appointed one interim resolution professional. When contacted, Godrej Properties spokesperson said: "We have learned that a refund claim has been filed against Magic Info Solutions, our joint venture partner in one project in Gurgaon. The said project was an area sharing partnership, has received its occupation certificate, and has been handed over to customers. This matter does not impact the project or our company in any way".

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