The National Company Law Tribunal (NCLT) has initiated the Corporate Insolvency Resolution Process (CIRP) against ATS Heights Private Limited, the developer of Knightsbridge luxury housing project in Noida sector 124. This comes after ATS failed to pay dues of INR 285 crore and INR 47 crore to lenders on time. ASK Trusteeship Services Private Limited, representing some ASK funds and investment managers, had filed a petition citing the default. The NCLT bench approved the petition and appointed Gaurav Katiyar as the Interim Resolution Professional (IRP) to oversee the CIRP. The NCLT in its order has made it clear that non-payment of debt when it is due and payable amounts to default as per the Insolvency and Bankruptcy Code (IBC).
The National Company Law Tribunal (NCLT) has initiated the corporate insolvency resolution process (CIRP) against ATS Heights Private Limited, the developer of Knightsbridge luxury housing project located in Noida sector 124.
The NCLT appointed an interim resolution professional (IRP) after ATS failed to pay dues on time, according to the order. ASK Trusteeship Services Private Limited, representing some ASK funds and investment managers, had filed a petition to initiate the CIRP against ATS Heights Private Limited.
ATS Heights Private Limited allegedly defaulted on payments of INR 285 crore and INR 47 crore to lenders, inviting the CIRP, the order said. The NCLT bench approved the petition and appointed Gaurav Katiyar as the IRP.
The order clarified that the construction work should not be hampered and homebuyers should not be adversely affected. The suspended promoters of ATS would have to comply with Section 19(1) of the Insolvency and Bankruptcy Code, and the IRP would ensure the project's continuity.
The ATS promoter Getamber Anand argued that there was no default on the company's part because R285 crore or R47 crore was not a 'debt as it was an equity'. But the NCLT went on admitting the plea and started the CIRP considering the default by the company.
The order noted that non-payment of a part of debt when it becomes due and payable will amount to default on the part of a corporate debtor. In such a case, an order of admission under Section 7 IBC must follow. If NCLT finds that there is a debt, but it has not become due and payable, the application under Section 7 can be rejected.
ATS had in 2012 bought 11.5 acres of land for INR 604 crore from Logix Group to develop 60% commercial and 40% residential space on this land located along Noida-Greater Noida Expressway. In May 2016, the Noida authority had approved building layout maps and then allowed the construction in this project measuring 11.5 acres in sector 124. The ATS was supposed to develop residential first in phase I and then the commercial development was supposed to be started. The building consists of 5 towers of 47 storeys in the residential phase. The developer has partially developed the residential towers.
NCLAT instructed the IRP to limit its actions solely to the construction process and directed all parties involved to file a reply within three weeks. NCLT had earlier appointed an IRP for the project, prompting ATS to reach the NCLAT. During the NCLAT hearing, ATS and JM Financial challenged the Section 7 order issued by the NCLT.
Getamber Anand said they are in talks with the petitioning entities, hoping to settle the matter amicably. He claimed the issue was related to equity invested, not actual debt or default.
However, the NCLT in its order has made it clear that non-payment of debt when due amounts to default as per the Insolvency and Bankruptcy Code. It remains to be seen how the resolution process progresses and if ATS Heights is able to resolve the matter with creditors to avoid liquidation.
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