NCLT Directs To Initiate Insolvency Proceedings Against Imperia Structures

The National Company Law Tribunal (NCLT) has taken action against Delhi NCR-based real estate company Imperia Structures by directing the initiation of insolvency proceedings. This decision came in response to a joint plea filed by 28 unit holders of Imperia Structures’ Gurugram-based project called ‘Imperia Mindscape.’ The insolvency tribunal found that the company had incurred a debt of Rs 36.79 crore and subsequently defaulted on it because it failed to deliver promised assured returns.

The NCLT’s statement regarding this matter reads, “The petition establishes that the corporate debtor is in default of a debt due and payable and that the default is for an amount which is more than the minimum amount of pecuniary threshold stipulated under section 4 (1) of the Code. The instant petition… for initiating CIRP (Corporate Insolvency Resolution Process) against Imperia Structures Limited, the corporate debtor, stands admitted and CIRP of Imperia Structures Limited is initiated.”

As part of this process, Gaurav Katiyar has been appointed as the Interim Resolution Professional, and the board of Imperia Structures has been suspended, based on the order issued on August 31, 2023.

Imperia Structures had launched the ‘Imperia Byron/Mindspace’ project in Gurugram in 2011, offering a ‘guaranteed assured return’ to buyers. Under this scheme, buyers paid an upfront sale consideration for their units, and the company promised to provide monthly guaranteed assured returns until the units were leased out. However, Imperia Structures failed to fulfill these agreements, leading to the insolvency proceedings.

The buyers argued that they were entitled to possession of their units within two years of receiving building plan approval, which they received on May 15, 2014. However, as of the filing of the plea, they had not received possession, and the building plans were only approved in August 2019. The company not only failed to provide the assured returns but also received the full sale consideration from the buyers, leading to a total default of Rs 36.79 crore.

Imperia Structures contended that it applied for the Occupation Certificate, granted on June 2, 2020, after completing construction. However, NCLT rejected this argument, affirming that the assured returns were considered financial debt under the Insolvency & Bankruptcy Code.

NCLT also noted that buyers had paid the sale consideration upfront and that the company’s liability to pay the assured return was recorded in the Memorandums of Understanding. Despite more than a decade since booking, Imperia Structures had not completed the project, obtained the Occupation Certificate, or leased out the units, leading to gross default

In conclusion, the NCLT found substantial evidence of default with respect to the debt, justifying the initiation of insolvency proceedings against Imperia Structures Limited.