NEW DELHI: The NCLAT has provided partial relief to NCR-based real estate firm Vatika by limiting the ongoing insolvency proceedings to a specific project, “Project Aspirations,” located in Gurgaon.
The National Company Law Appellate Tribunal (NCLAT) modified the earlier order from the National Company Law Tribunal (NCLT), clarifying that “CIRP cannot encompass all other projects” of Vatika.
On February 3, following a plea from IDBI Trusteeship Services, the NCLT initiated the Corporate Insolvency Resolution Process (CIRP) against Vatika and appointed an Interim Resolution Professional (IRP) while enforcing a moratorium.
This decision was subsequently challenged by Surender Singh, a director of the suspended board, before the NCLAT, which subsequently limited the CIRP to one project.
Nonetheless, the NCLAT ruled that the Debenture Trustee had substantiated the debt and default, affirming that initiation of the CIRP against Vatika was justified.
The NCLAT panel, consisting of Chairperson Justice Ashok Bhushan and Member (Technical) Barun Mitra, stated, “The CIRP against Vatika is confined solely to the project located in Sector 88 B, Gurgaon, ‘Project Aspirations’; the order dated February 3, 2026, is modified accordingly.”
The NCLAT has also directed the IRP to issue an updated publication following this ruling while maintaining that the commencement date for the CIRP remains February 3, 2026. All stakeholders associated with ‘Project Aspirations’ must update their claims with supporting documents.
Vatika had issued fully secured renewable and non-convertible debentures, totaling Rs 146 crore through a Debenture Trust Deed (DTD), with IDBI Trusteeship serving as the Debenture Trustee on behalf of two funds from Indiabulls as of June 30, 2017.
The debenture had a term of 48 months from the investment date, but the redemption deadline was extended to June 30, 2024. However, no payments were made despite multiple reminders, leading IDBI Trusteeship to approach the NCLT on January 24, 2024, asserting a default of Rs 274.13 crore, which includes the additional coupon rate.
The NCLAT’s extensive 58-page ruling specified that the DTD dated June 30, 2017, associated the debenture amount of Rs 146 crore to a specific project located on a property in Sector 88 B, measuring 12.212 acres.
The securities offered to the Debenture Trustees were connected to the registered project “Aspirations.” The NCLAT concluded, “In this case, the CIRP against the corporate debtor should have been limited solely to the project in question, Aspirations; extending the CIRP to other projects in Haryana and other locations is not applicable.”
