New Delhi, March 30 Providing partial relief to NCR-based realty firm Vatika, the NCLAT has restricted the insolvency proceedings against it to a specific Gurgaon-based project, Project Aspirations.
Modifying the order passed by the National Company Law Tribunal (NCLT), the appellate tribunal said that "CIRP cannot engulf all other projects" of the corporate debtor (Vatika).
While admitting the plea of IDBI Trusteeship Services, the Chandigarh-based NCLT bench on February 3 directed the initiation of Corporate Insolvency Resolution Process (CIRP) against Vatika and appointed an Interim Resolution Professional (IRP) after imposing a moratorium.
This order was challenged by Surender Singh, a director of the suspended board of Vatika, before the appellate tribunal NCLAT, which modified the order to restrict the process to one project only.
However, the National Company Law Appellate Tribunal (NCLAT) also said that the Debenture Trustee has proved the debt and default, hence initiation of CIRP against Vatika "cannot be faulted".
"However, the CIRP against the corporate debtor (Vatika) is to be confined to only the project situated in Sector 88 B, Gurgaon, 'Project Aspirations', the order dated February 03, 2026, is modified to that extent," said a two-member NCLAT bench comprising Chairperson Justice Ashok Bhushan and Member (Technical) Barun Mitra.
The NCLAT has also directed that the IRP, who was permitted to collate the claims after the publication, may issue a revised updated publication consequent to this order.
"However, the date of commencement of the CIRP shall remain the same, February 3, 2026, requiring updation of the claim, along with proof of the claims by the stakeholders of the ‘Project Aspirations’," it said.
Vatika had subscribed "fully secured renewable and Non-Convertible Debentures" with an aggregate value of Rs 146 crore through a Debenture Trust Deed (DTD), with IDBI Trusteeship acting as a Debenture Trustee on behalf of the Indiabulls India Opportunities Fund and Indiabulls High Yield Fund on June 30, 2017.
The term of the debenture was for 48 months from the investment date; however, extension of redemption was granted till June 30, 2024. However, no payment was received despite several reminders, following which IDBI Trusteeship moved NCLT on January 24, 2024, claiming a default of Rs 274.13 crore, which includes the additional coupon rate.
The NCLAT in its 58-page-long order said that the DTD dated June 30, 2017, contemplated the payment of the amount of debenture amounting to Rs 146 crore for a project and a project on a property identified in the DTD as land situated in Sector 88 B area, measuring 12.212 acres.
The securities provided to the Debenture Trustees were with respect to the project registered as Project “Aspirations”.
"In the facts of the present case, CIRP against the corporate debtor ought to have been confined only to the project in question, Aspirations, and the CIRP cannot be extended to other projects of the corporate debtor, situated in the state of Haryana and other places," the NCLAT said.