The builder has defaulted on an outstanding loan amount of Rs 97.3 crore by Bank of Baroda. The IRP gets 270 days to turn around the company, failing which the assets of the firm go into liquidation.
In what has come as another shock to homebuyers, the principal bench of National Company Law Tribunal (NCLT) on Wednesday admitted an insolvency petition against Amrapali Ultra Homes filed by Bank of Baroda. Sanjay Gupta has been appointed as the insolvency resolution professional (IRP) in the case. The IRP gets 270 days to turn around the company, failing which the assets of the firm go into liquidation.
The builder has defaulted on an outstanding loan amount worth Rs 97.3 crore by Bank of Baroda. The bank had on August 10 moved NCLT to start insolvency proceedings against three companies - Amrapali Infrastructure, Silicon City and Ultra Homes - under the Insolvency and Bankruptcy Code. The case was heard on the same day, but the court had reserved its order and pronounced it today against Ultra Homes.
A company source said that Amrapali had prioritised delivery to Ultra Homes buyers. The Amrapali official, who refused to be named, said that in all three of the companies, the bank had outstanding amounts of much more than Rs 1,00,000, the minimum cut-off for initiating insolvency proceedings. The plea, he said, was therefore likely to be accepted, despite company managements opposing the move.
In Ultra Homes, Bank of Baroda has an outstanding amount of Rs 34 crore in principal. Other lenders to the company are Oriental Bank of Commerce and Bank of Maharashtra.
Banks had given about Rs 300 crore in principal to the company, which has returned Rs 305 crore so far and owes Rs 156 crore more. In addition, Ultra Homes owes Noida Authority about Rs 340 crore. Besides this, JP Morgan had also extended a secured loan of Rs 150 crore to the company. Sources said the first claim to receivables from the company would be that of the authority.
NCLT has left homebuyers in a lurch, as they will not be treated as secured creditors such as banks and financial institutions. So to safeguard their money, homebuyers will move Supreme Court to challenge NCLT orders.
“We are left with no option but to move Supreme Court. We have no clue about what is going to happen next. The government should intervene and help us. About 30,000 homebuyers’ money is at stake,” said Arun Kumar, a buyer.
According to the director of Amrapali, Shiv Priya, "We had applied for restructuring of the company's loans with the bank and asked for more time for payment of dues. However, our request was denied."
NCLT last month ordered the initiation of insolvency proceedings against another Amrapali group company, Silicon City, on a plea by Bank of Baroda. The builder has defaulted on an outstanding amount of Rs 56 crore by the bank.