Mumbai: A Bankruptcy court allowed an application filed by Maharashtra Housing and Area Development Authority (MHADA) which sought exclusion of the 47-acre land parcel from liquidation of Guruashish Construction, stated report.
The Economic Times report stated that the division bench of Mumbai bench of National Company Law Tribunal (NCLT) said that assets not owned by the debtor cannot be included as a part of liquidation estate.
The 47.8 acres area under dispute is the land parcel in Goregaon suburb of Mumbai. The report stated that Senior Counsel Janak Dwarkadas and advocate Shilpi Jain said that MHADA is the owner of the property.
The tribunal noted that the private builder Guruashish had violated the joint development agreement and that MHADA could terminate the agreement with the latter.
MHADA terminated agreement in 2018
The development authority terminated their JDA in January 2018 since the builder failed to complete work within the agreed timeline.
The tribunal in their order also observed that the National Company Law Appellate Tribunal had also earlier said that the MHADA land was handed over to the builder for development work only and that the firm hadn't acquired any right over the land.
As per terms of the joint development agreement signed in 2008, Guruashish Construction was supposed to rehouse tenants of Patra Chawl on the 47 acre land. Since it failed to do so, the firm violated the agreement and that gave MHADA the right to terminate it. This means that the land wasn't formally transferred to Guruashish and can't be considered as one of its assets for liquidation.
Bankruptcy court says land belongs to MHADA
Division bench of Justice PN Deshmukh and Shyam Babu Gautam had in their February 10 order had upheld that the land belongs to MHADA and that it was never formally transferred to the builder and hence is not their asset.
The tribunal also observed that the company itself admitted that they had only completed 40.44 % of the work thereby violating the agreement with MHADA.
