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The National Company Law Appellate Tribunal (NCLAT) has clarified that the Lucknow Development Authority (LDA) must be heard before any order is passed in the insolvency proceedings of Ansal Properties and Infrastructure Ltd (APIL). The LDA had highlighted that it was not notified earlier despite having substantial claims of INR 4,500 crore and concerns over High Tech Township policy violations, undelivered flats, and irregular land transactions. The ruling emphasizes procedural fairness and ensures that the regulator's input is considered before any further actions, reflecting ongoing efforts to protect both homebuyers and public interest.
The National Company Law Appellate Tribunal recently ruled that the Lucknow Development Authority (LDA) must be formally heard before any further orders are passed in the insolvency proceedings of Ansal Properties and Infrastructure Ltd (APIL). This decision followed the LDA's contention that it was not notified in earlier proceedings, despite being a major stakeholder with significant financial and regulatory interests. Advertisement
The LDA highlighted that Ansal Properties had allegedly violated the High Tech Township policy and failed to deliver plots, flats, villas, and commercial units booked by thousands of homebuyers, with some awaiting possession for over a decade. In addition, the authority raised concerns regarding irregular transactions involving approximately 411 acres of township land, which had been sold without proper approvals.
In its submission, the LDA emphasized that the insolvency process should not move forward without addressing these issues. The authority has filed claims totaling INR 4,500 crore, covering pending dues and regulatory compliance concerns. Earlier, the government had taken steps including complaints and filing an FIR against the developer in response to homebuyer grievances.
Previously, regulatory bodies, including the Uttar Pradesh Real Estate Regulatory Authority, had sought to join the proceedings, challenging the initial insolvency orders and reflecting broader concern over unresolved dues and policy breaches. Interim directives have also been issued in the past regarding the conduct of insolvency professionals and the involvement of creditors in the process.
The NCLAT's order reinforces that procedural fairness is crucial, particularly when large government claims and thousands of affected homebuyers are involved. The case has been remanded for consideration in line with the tribunal's guidance, ensuring that the LDA's perspective is taken into account before any further decisions are made.
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