In a first, the National Company Law Appellate Tribunal (NCLAT) has passed an order for reverse insolvency process that could set a template for stressed real estate projects.

The process will give a chance to the promoter to complete the project within a specified time frame. The resolution plan would then achieve the same objective of the insolvency process but not involve any third party approval or a resolution applicant to submit a bid.

The NCLAT has also said that if insolvency is initiated against a project, it will not extend to the entire company or any of its other projects.

The NCLAT order has come in the matter of a real estate company — Flatbuyers Association of Winter Hills-77, Gurugram, a project of Umang Realtech — to discourage the use of insolvency and bankruptcy code (IBC) as a recovery tool.

https://www.business-standard.com/article/economy-policy/nclat-orders-reverse-insolvency-process-for-stressed-realty-projects-120021101759_1.html

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