Homebuyers were left scrambling after The Wave Group’s Wave Mega City Centre Private Limited filed for voluntary bankruptcy on March 26, 2021.
On January 5, the National Company Law Appellate Tribunal (NCLAT) rejected the Wave Group’s request for insolvency.
“We don’t think the appeal has any validity. The appeal is turned down. No expenses, according to the ruling by Justice Ashok Bhushan, the chairman, and Member Barun Mitra.
“We’ve won with this. We already have the land bank in place. The ruling tells real estate investors to pay their taxes and follow the rules, according to Ritu Maheshwari, CEO of Noida Authority.
A representative for Wave Mega City Centre declined to comment when reached.
“The NCLAT judgement maintaining the NCLT’s decision and rejecting Wave Megacity’s petition is a positive result since it protects homeowners’ rights and doesn’t allow the builder evade the legal system. The homebuyers would have been left high and dry because of the moratorium under the IBC, and their judgements before RERA and consumer courts could not have been carried out, according to Piyush Singh, founding partner of PSP Legal.
In March 2021, Wave Megacity Center contacted NCLT in accordance with Section 10 of the Insolvency and Bankruptcy Code (IBC). If there has been any default, a debtor may start an insolvency resolution process against themselves under Section 10 of the IBC. The real estate company stated in its appeal submitted in 2021 that it owed the Noida Authority Rs. 1,222.64 crore and was unable to settle the debt.
The NCLT had rejected Wave Megacity Centre’s request to commence bankruptcy proceedings against itself in June of last year and ordered that an investigation into the claims of fund misappropriation by the real estate business be carried out by a national government body.
“We have come to the conclusion that Wave Group, the corporate debtor, attempted to defraud thousands of homeowners, the Noida Authority, and the government authorities by filing the application under section 10 of the Indian Bankruptcy Code 2016 (IBC). If the CIRP was activated, significant additional bias must have resulted. The NCLT ruling from June 2022 stated, “Therefore, we are imposing Rs 1 crore penalty on corporate debtor, which will be submitted in the Prime Minister’s relief fund in the following 15 days.
There were “severe suspicions against the corporate debtor about diverting funds obtained from homeowners,” according to the report. Additionally, homeowners have provided proof that the corporate debtor was defrauding them of a substantial sum of money. It is astonishing to see that the corporate debtor neglected to transfer ownership or return funds despite collecting the whole sum from homeowners. We order the central government to conduct the required inquiry into the business of the corporate debtor in light of the aforementioned facts.
Homebuyers were left in the dark after Wave Mega City Centre Private Limited of The Wave Group filed for voluntary bankruptcy on March 26, 2021.
This was the first time a Noida real estate business has requested voluntary insolvency proceedings through the NCLT.
In Noida’s sectors 25A and 32, The Wave Group began developing residential and commercial complexes in 2011–2012 with the promise of completion in 2014. Due to the company’s failure to pay outstanding land cost debt of Rs 2,700 crore, the Noida authorities terminated the company’s land allocation in February 2021.
In Sector 32, 1,08,421.13 square metres of land that had been given to Wave Mega City Centre Private Limited were taken over by the authority in March 2021.
