In a significant development, the National Company Law Appellate Tribunal (NCLAT) delivered a landmark order on December 9, 2023, in favor of Aquacity Consumer and Social Welfare Society (ACSWS) and the Madhya Pradesh Real Estate Regulatory Authority (MP-RERA). This victory represents a ray of hope for homebuyers who have been entangled in legal battles against builders across India, fighting for their hard-earned savings.
The battle, spanning nearly 13 years, revolves around members of the Aquacity consumer forum who invested in residential apartments between 2011 and 2017 from AG8 Ventures Ltd., a part of the Aakriti group. When the builder failed to deliver the promised apartments, the homebuyers took the matter to the National Consumer Disputes Resolution Commission (NCDRC), securing a favorable order in 2020-21. However, flaws in the order led them to approach the Supreme Court, resulting in a modification in their favor in October 2022.
The MP-RERA, for the first time, joined forces with the homebuyers, challenging the wrongful invocation of bankruptcy laws by the builder. The battle intensified when DB Corp, in collusion with Aakriti, invoked bankruptcy proceedings, claiming to be an ‘operational creditor.’ The dubious nature of their claims, including forged invoices and questionable barter agreements, came to light during the proceedings.
MP-RERA argued that DB Corp’s actions were collusive, attempting to evade obligations arising from the regulator’s orders. The NCLAT order, on December 9, upheld the stand of MP-RERA and the homebuyers, stating that the initiation of proceedings by DB Corp was contrary to the Insolvency and Bankruptcy Code (IBC).
While this victory is a step forward for homebuyers, the battle continues with penalties imposed on the resolution professional and AG8 Ventures. The glimmer of hope for homebuyers emerges as they inch closer to justice in their arduous journey against powerful corporates.