NCLAT Restricts Insolvency Proceedings Against Vatika to Gurgaon Project ‘Aspirations’

NCLAT Restricts Insolvency Proceedings Against Vatika to Gurgaon Project ‘Aspirations’​

Appellate Tribunal Modifies NCLT Order, Limits CIRP Scope​

New Delhi, March 30: In a partial relief to NCR-based real estate firm Vatika, the National Company Law Appellate Tribunal (NCLAT) has restricted the Corporate Insolvency Resolution Process (CIRP) against the company to a single Gurgaon-based project, ‘Project Aspirations’.

Modifying an earlier order by the National Company Law Tribunal (NCLT), the appellate tribunal clarified that the insolvency proceedings cannot extend to all projects of the corporate debtor.

CIRP Valid but Limited to Specific Project​

The NCLAT upheld the initiation of insolvency proceedings, stating that the debt and default had been established by IDBI Trusteeship Services. However, it ruled that the CIRP must remain confined to the project located in Sector 88 B, Gurgaon.

A two-member bench comprising Chairperson Justice Ashok Bhushan and Member Technical Barun Mitra stated that the February 3, 2026 order stands modified only to the extent of limiting the process to ‘Project Aspirations’.

Background of the Case​

The Chandigarh bench of the NCLT had admitted a plea by IDBI Trusteeship Services on February 3, 2026, initiating CIRP against Vatika and appointing an Interim Resolution Professional (IRP), along with imposing a moratorium.

This order was challenged by Surender Singh, a director from Vatika’s suspended board, before the NCLAT, leading to the partial modification.

Directions to Interim Resolution Professional​

The appellate tribunal directed the IRP to issue a revised public announcement reflecting the limited scope of the insolvency process. It also clarified that the commencement date of CIRP will remain February 3, 2026.

Stakeholders associated with ‘Project Aspirations’ have been asked to update and submit their claims along with supporting proof.

Financial Dispute and Default Details​

The dispute traces back to June 30, 2017, when Vatika raised Rs 146 crore through fully secured, redeemable, non-convertible debentures under a Debenture Trust Deed with IDBI Trusteeship acting on behalf of Indiabulls India Opportunities Fund and Indiabulls High Yield Fund.

The debentures were issued for a tenure of 48 months, later extended until June 30, 2024. Despite repeated reminders, no repayment was made.

Subsequently, IDBI Trusteeship approached the NCLT on January 24, 2024, citing a default of Rs 274.13 crore, including additional coupon rates.

Tribunal’s Observations on Project-Specific Financing​

In its detailed 58-page order, the NCLAT noted that the debenture agreement was tied specifically to a project on land measuring 12.212 acres in Sector 88 B, Gurgaon, identified as ‘Project Aspirations’.

The securities provided were also linked exclusively to this project.

The tribunal concluded that insolvency proceedings should remain confined to the concerned project and cannot be extended to other developments undertaken by the company across Haryana or elsewhere.