Project-Level Insolvency Mandated
The National Company Law Appellate Tribunal (NCLAT) has ruled that insolvency proceedings initiated by homebuyers against real estate firms must be strictly confined to the specific project where a financial default has occurred. This tribunal’s clarification prevents a single project’s distress from triggering legal action against an entire corporate group’s unrelated assets. The NCLAT’s stance emphasizes that extending insolvency proceedings beyond the defaulting project is counterproductive to homebuyers and stakeholders in other, financially sound developments. This approach aligns with earlier directives, including those for Raheja Developers’ ‘Raheja Shilas’ project, and reiterates that the…