Another Real Estate Battle at Noida: Ajnara Builder Dragged into Insolvency

Intense real estate disputes continue to plague Noida, a prominent industrial hub near Delhi. Following the demolition of the Twin Towers and the ongoing Amrapali insolvency proceedings, the National Company Law Tribunal (NCLT) has now...

Intense real estate disputes continue to plague Noida, a prominent industrial hub near Delhi. Following the demolition of the Twin Towers and the ongoing Amrapali insolvency proceedings, the National Company Law Tribunal (NCLT) has now initiated insolvency proceedings against Ajnara Builder.

How did the COVID-19 lockdown affect the functioning of the NCLT? A quantitative analysis Image: How did the COVID-19 lockdown affect the functioning of the NCLT? A quantitative analysis

The NCLT's Delhi bench has taken this action in response to a petition filed by 128 homebuyers who had invested in Ajnara Builder's project, Ajnara Ambrosia. The court has appointed an Insolvency Resolution Professional (IRP) to oversee the proceedings.

The petition alleges that the builder had failed to deliver the project as per the agreed-upon terms and had defaulted on the debt owed to the homebuyers. The total financial debt from the applicants alone amounts to Rs 50,47,48,426/-. The NCLT ruling states that the allottees (homebuyers) had requested the initiation of Corporate Insolvency Resolution Process (CIRP) against Ajnara Builders.

What Led to the Petition?

In 2021, 113 homebuyers of Ajnara Ambrosia approached the NCLT with their grievances. The builder responded to the notice from the NCLT bench in April 2021, raising objections, but the NCLT rejected them. The court acknowledged the petition and appointed an expert to oversee the resolution process.

According to the petition, the builder had received advance payments but had failed to fulfill its promises and deliver possession of the houses as per the project deadline. The objections raised by the builder, claiming that the petition was time-barred and the petitioners didn't qualify as financial creditors, were dismissed by the NCLT.

The Legal Implications

The NCLT ruling on September 20, 2022, accepted the application under Section 7(5) of the Insolvency and Bankruptcy Code 2016. As per the Code, a moratorium is announced for a period of 180 days from the date of the order, during which the builder cannot be subjected to any legal action.

To cover immediate expenses, the NCLT has ordered the developer to pay Rs 2 lakh.

About Ajnara Group and Ajnara Ambrosia Project

Ajnara Group, founded in 1991, is a prominent real estate developer in Noida. Ajnara India Ltd. has six active projects, including Ajnara Ambrosia. The project was supposed to be a group housing residential project with a Spanish lifestyle ambiance, located in Noida's Sector 118.

AJNARA AMBROSIA - a fusion of Indian-Spanish style Image: AJNARA AMBROSIA - a fusion of Indian-Spanish style

Construction on the residential complex began in 2014, with an architectural layout consisting of 14 towers to be built in phases. The project gained attention due to its location on the Faridabad-Noida-Ghaziabad Expressway. However, in 2017, work on the project came to a halt, leading to dissatisfaction among the homebuyers.

Allegations and Ongoing Challenges

Apart from the insolvency proceedings, Ajnara Group is facing numerous complaints. According to UP-RERA's website, Ajnara India Ltd. has received 308 complaints, while Ajnara Realtech Ltd. is the target of 150 complaints. Ajnara Ambrosia alone has received almost 99 complaints.

The residents of Ajnara Le Garden and Ajnara Homes staged a protest against the builder due to maintenance difficulties, inadequate security, and increased maintenance costs. The Yamuna Expressway Industrial Development Authority revoked the land allocation for the Ajnara Panorama housing project due to unpaid debts of Rs 46.8 crore.

The Fate of Noida Builders

Several Noida-based developers, including Jaypee Infratech, Supertech, Logix, Mascot Soho Homes, and La Residentia Developers, are facing insolvency proceedings initiated by homebuyers who paid for properties they never received.

The current situation highlights the urgent need for expedited legal processes to address disputes and protect the interests of homebuyers. Only time will tell the fate of Ajnara Group and other builders caught in the web of real estate battles.

Edited by Prakriti Arora

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