Parsvnath Arm Headed Towards Insolvency
Even as no resolution in sight for homebuyers who have invested in various projects of insolvency-hit developers in Noida, including Amrapali, Jaypee and the 3C Company, the Delhi Bench of the National Company Law Tribunal (NCLT) has started similar proceedings against another big realtor of the national capital region (NCR). The tribunal has accepted a petition of three homebuyers and has given its go-ahead for the initiation of insolvency proceedings against Parsvnath Landmark Developers (PDL), a subsidiary of Parsvnath Developers. The company has been charged with inordinate delay in project delivery and failure to pay compensation to the petitioners.
The three homebuyers had signed an agreement with the builder to purchase units in the developer’s project in Delhi in 2009, with an assurance to get possession in 36 months. Work on the La Tropicana project at Khyber Pass, however, has yet to start. The developer has cited delay in approvals the cause of its failure to meet the deadline while refusing to pay any compensation to these buyers despite their repeated attempts. PDL also told the NCLT buyers could not drag it to the tribunal since they were not “financial creditors”.
Justifying the buyers’ stance, the NCLT said while buyers were covered under the definition of “financial creditors” through an amendment in the insolvency law, the debt, too, fell within the scope of “financial debt”. The tribunal has also directed the Registrar of Companies to put the realtor in the category corporate debtors on its website immediately.
A forensic audit of the parent company is already underway after the Securities and Exchange Board of India (Sebi) ordered for the same in August last year. Parsvnath Developers’ name has featured in a list of 331 corporations that are being probed by the Sebi on suspicion to being shell companies.
Involved in development of residential as well as commercial real estate, Parsvnath has launched majority of its projects in the NCR, Uttar Pradesh and Haryana. In the NCR, the developer has the biggest number of projects in the Noida-Greater Noida region.