Bombay HC appoints senior lawyer to represent Orbit flat buyers
The Bombay High Court on Monday appointed senior advocate Shiraz Rustomjee to represent aggrieved buyers of flats and commercial properties and tenants of Orbit projects, in the company’s meeting of creditors, when it is called. Justice SJ Kathawalla, who has been hearing the high-profile case filed by flat-purchasers of the stuck Orbit Terraces project passed the order appointing Rustomjee after all parties, including the banks, gave a no-objection.
While the move was welcomed by many, all claims cases related to Orbit Corp, filed before the HC, are likely to come to a standstill if the National Company Law Tribunal (NCLT) admits insolvency proceedings filed by State Bank of India against Orbit.
Orbit Corp had borrowed Rs 135 crore from the consortium of SBI and Union Bank of India by creating a charge on the project in their favour. It had re-paid around Rs 76 crore before it stopped work on the project in 2014.
The creditors’ meet, for which Rustomjee has been appointed, will happen only after the NCLT admits the case and appoints an Insolvency Resolution Professional (IRP). The IRP will then call for a Creditors’ meeting. Once an IRP is appointed, the board of the concerned company is suspended. The IRP is given a period of 180 days, which is extendable up to 270 days, to turn the company around. If the IRP is unable to manage this within the given time frame, the company goes into liquidation – meaning its assets would be sold off to pay of its debts – automatically.
But the appointment of IRP by the NCLT will automatically bring to a halt all claims filed against Orbit before all courts, even as a few purchasers were pooling in money and hoping to reach a resolution.
In the case of Orbit Terraces, the aggrieved flat buyers had initially offered Rs 45 crore to the banks and later increased the amount to Rs 60 crore by way of final settlement for the balance debt on Orbit.