Insolvency Proceedings Against 3C Company Arm Begin
After Jaypee and Amrapali, Noida-based The 3C Company is in for hard times as it has failed to deliver housing projects while accumulating huge debt. The developer would now face insolvency proceedings for delaying its projects Lotus Panache located in Noida Sector 110 and Lotus Boulevard in Sector 100. Over 3,500 homebuyers have been affected by the delay.
To begin the proceedings, the National Company Law Tribunal (NCLT) has appointed an interim resolution professional to resolve the financial liabilities of Granite Gate Company, the 3C subsidiary that is building its ‘Lotus’ brand of projects. According to the rules, the interim resolution professional has 270 days to arrive at a resolution post which the developer firm will head towards liquidation.
Leading up to insolvency
In a first, a couple in Noida had moved the National Company Law Tribunal (NCLT) against the company in July 2018 after homebuyers were awarded the status of financial creditors under the amendment made to the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018, on June 6.
Many big and small groups of aggrieved homebuyers had approached the NCLT over the last couple of years ever since the developer firm turned down their plea for refunds. A two-member bench headed by NCLT president Justice M M Kumar has finally allowed insolvency proceedings against the company.
On November 30, three directors of the company were arrested on charges of duping homebuyers of Lotus 300 project, and siphoning of funds worth Rs 190 crore. The three have been booked under Section 420 (cheating), Section 409 (criminal breach of trust) and Section 120B (criminal conspiracy) of the Indian Penal Code. An FIR was filed by homebuyers of the project against the Noida-based developer in March 2018. The project was to be delivered in 2011.
It was in 2009 and 2010 when the homebuyers started investing in Lotus Panache, a project located in Sector 110 of Noida. The project was scheduled to be delivered in 2011-2012. By early 2018, the project was running late by five years. That is when over 4000 homebuyers started launched a Twitter campaign — #4000HomelessFamilies — to protest against the delay in the delivery of the project.
Two properties of the 3C company were confiscated by the Gautam Buddh Nagar Administration last year to recover Rs 34 crore to pay off homebuyers in a company’s project, Lotus Panache. The company claimed that it was a “security deposit” that they have kept with the administration. The decision was taken by the National Consumer Disputes Redressal Commission (NCDRC) after the Welfare Association approached the consumer court citing undue delay and non-payment of compensation.
Other delayed 3C projects
With buyers holding a significant position as financial creditors, many are awaiting a resolution that will lift them out of this agony. Not just Panache and Boulevard, homebuyers in other 3C projects such as Lotus Zing (Sector 168), Lotus Boulevard (Sector 100), Greenopolis, Sector 89 Gurgaon and Woodview in the same sector are also affected. Buyers are calling in for legal supervision while many have formed groups and approached lawyers to take the matter forward. In due time, they expect their cases to be taken up.