The National Company Law Tribunal(NCLT) on Monday passed an order in favour of Mhada, allowing it to take back physical possession of a large tract of land in Goregaon, where rights for a redevelopment project were given to a city builder Guruashish Construction, HDIL’s real estate arm.
A public sector bank dragged the builder before NCLT for insolvency after it defaulted on repayment of a loan. The NCLT had put a moratorium on it. A resolution professional assigned by the tribunal to carry out the process of insolvency had last week moved to restrain Mhada from taking any coercive steps to take back possession of its land.
The 10-acre land is part of a 48-acre Mhada layout in Siddarth Nagar and is estimated to be worth over Rs1,200 cr. NCLT (Mumbai) rejected the application which also sought to restrain Mhada from implementing its recent termination notice and repossessing land from the Housing Development and Infrastructure Ltd (HDIL)’s sister company, Guruashish Constructions. Guruashish had signed an agreement with Mhada and Patra Chawl residents to redevelop the land in 2008. The project is incomplete.
Mhada counsel Janak Dwarkadas had opposed the officer’s plea and said no relief can be given to a licensee who only had right to develop the property for the benefit of 672 tennats. Guruashish was obliged to rehabilitate tenants and also give Mhada over 1 lakh sq metres of built-up space, free of cost. Based on this consideration only, they were allowed rights to the free sale component. “Since they were unable to perform their obligation and committed breaches they cannot remain in possession of the land,” argued Dwarkadas.
The resolution professional represented by counsel Navroz Seervai argued that once in possession and once the moratorium kicked in, unless resolution process has run its complete course, land cannot be taken back by Mhada. NCLT rejected the application on the ground that a moratorium granted will not be available for holding on to property because land belongs to Mhada and agreement has been terminated by Mhada on account of breaches of agreement by Guruashsish.
Also, the order could mean the project cannot be part of any resolution plan to revive the corporate debtor company, Guruashish. Meanwhile, HDIL and its director Rakesh Kumar Wadhawan has to disclose on oath before Justice S J Kathawalla of Bombay high court on April 4 all their assets, movable and immovable including personal assets, bank balance and I-T returns from 2011. Mhada had in January terminated its development agreement with Guruashish.