600 Homebuyers in Greater Noida West to Get Possession Under NCLT’s Reverse Insolvency Process

In a significant development for homebuyers awaiting possession for years, around 600 buyers of RG Luxury Homes in Greater Noida West will soon receive the keys to their apartments. The Greater Noida Authority has granted the occupancy certificate (OC) for three more towers of the project, marking an important milestone under the reverse insolvency process.

RG Luxury Homes has become the first stalled real estate project in Gautam Buddh Nagar district to secure an OC through this innovative insolvency resolution approach. With the latest approvals, the project now has a total of seven towers with occupancy clearance. The first phase of the project consists of nine towers in total. This marks a historic achievement, as RG Luxury Homes is the first real estate project in the district to receive an OC after obtaining a Reverse Insolvency order from the National Company Law Tribunal (NCLT). The completion of the stalled project has been carried out under the supervision of an Interim Resolution Professional (IRP).

Understanding the Reverse Insolvency Resolution Process

The reverse insolvency resolution process is a provision under the Insolvency and Bankruptcy Code (IBC) that allows corporate debtors to voluntarily initiate their resolution process. This mechanism is particularly useful for reviving distressed real estate projects, ensuring that buyers who have invested their hard-earned money in homes are not left in limbo. Under this provision, promoters are mandated to inject fresh funds into the project and complete it, preventing further delays and protecting the interests of homebuyers.

Progress and Updates on RG Luxury Homes

The RG Group has successfully completed another phase of its RG Luxury Homes project in Greater Noida West, obtaining occupancy certificates for three additional towers – D, E, and F. With this, the group is ready to hand over possession to 600 homeowners. Last year, the developer had obtained OCs for four towers (A, B, C, and M), covering 850 units.

The RG Luxury Homes project spans across 18.5 acres in Sector-16B, Greater Noida West, Uttar Pradesh. Out of the nine towers that went into insolvency, two are still under construction and are expected to be delivered soon. The first phase consists of a total of 1,918 units, offering relief to hundreds of homebuyers who have been waiting for their homes for years.

The project was originally launched in 2010 with a planned completion deadline in 2014. However, construction work came to a standstill in 2016 due to financial difficulties. As the delays prolonged, a group of homebuyers took the matter to the National Company Law Tribunal (NCLT) in 2019. In February 2020, the NCLT issued a ‘reverse insolvency order,’ directing the RG Group to complete the stalled project under the supervision of an IRP.

Revival Under Reverse Insolvency

Construction on the project resumed in October 2021 under the supervision of the IRP. The group successfully secured occupancy certificates for 854 flats across four towers in February 2023. Now, with the latest OC approvals for another three towers, a total of 1,450 units are ready for possession. The remaining 460 units from Phase 1 are expected to be handed over soon.

Key Stakeholders' Perspectives

Himanshu Garg, Director of RG Group, expressed optimism about the project's progress, stating, “Securing the Occupancy Certificate (OC) for another three towers of RG Luxury Homes is a crucial milestone. Now, with OCs for seven towers covering 1,450 units, we are confident that the remaining 460 units will be delivered soon.”

Interim Resolution Professional (IRP) Manoj Kulshrestha acknowledged the challenges faced during the resolution process. “Given the current trend of real estate projects hitting NCLT and facing prolonged resolution, completing RG Luxury Homes was a challenging task. However, this success sets an example for other stalled projects,” he said.

Advocate Saurabh Jain, who represented the real estate company, highlighted the significance of the reverse insolvency process, stating, “This case was the first of its kind and has proven to be highly effective for real estate projects, where homebuyers often suffer the most. Although the initial phase had hurdles due to the lack of specific IBC provisions for project completion by the promoter, the National Company Law Appellate Tribunal (NCLAT) recognized the urgency of resolving such cases in the best interest of homebuyers.”

Supreme Court advocate Kumar Mihir echoed this sentiment, expressing hope that this case will set a precedent for resolving stalled real estate projects. “If all stakeholders collaborate and focus on solutions rather than engaging in blame games, more projects can be successfully revived,” he remarked.

RG Group’s Track Record and Future Plans

RG Group has an extensive track record in the real estate sector, having successfully delivered 14 commercial and retail projects and 1,540 residential apartments across more than 2 million square feet in Sector 120, Noida. The developer is actively working on multiple residential group housing projects in Noida and Greater Noida West, which are widely known as Noida Extension.

The completion of RG Luxury Homes through the reverse insolvency resolution process offers hope for thousands of homebuyers across India who are stuck in delayed housing projects. With regulatory support and effective coordination among stakeholders, similar troubled projects could also find a path to completion, bringing relief to homebuyers nationwide.