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The National Company Law Appellate Tribunal (NCLAT) directed Raheja Developers to halt any creation of third-party rights in its immovable properties, including sale of land or residential units, while its insolvency resolution process is under way. The tribunal emphasised that once insolvency has commenced, the management of the corporate debtor must not dispose of or deal with such assets without oversight. The interim resolution professional (IRP) has been authorised to appear before regulators such as the Real Estate Regulatory Authority and defend notices issued in respect of the company�s properties.
The Principal Bench of the National Company Law Appellate Tribunal in Delhi issued an order to Raheja Developers, restraining the company from creating any third-party rights in its immovable properties which includes land parcels and unsold residential inventory while insolvency proceedings are active. The tribunal underscored that insolvency having commenced, we have no doubt that the management of the corporate debtor shall not create any third-party rights in the immovable properties, signalling that ongoing transfers or sales under management control would conflict with the moratorium provisions under the Insolvency and Bankruptcy Code, 2016 (IBC). Advertisement
The order follows complaints from home-buyers who asserted that Raheja Developers had continued to sell or transfer units and land without obtaining the IRP's instructions, thereby placing purchasers at risk. The developer's counsels argued that unsold stock formed part of its rolling inventory and that disposal of such units was vital to maintain operational viability.
In response, the tribunal clarified that the IRP holds the responsibility of defending the corporate debtor before any statutory or regulatory authority where notices are pending. It ruled that the IRP may attend hearings of the RERA authority and other government bodies on behalf of the corporate debtor, with support from the company's existing directors, officers and employees.
For the home-buyers standing by, the tribunal's intervention offers protective oversight. The pause in asset disposals means that any transaction entered after the moratorium declaration may be subject to challenge or reversal. The ruling aims to inform purchasers of the ongoing insolvency resolution process and to hold the developer accountable for asset transfers whilst under moratorium.
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