NCLT Directs Immediate Compliance with Financial Obligations in Jatayupara Tourism Project Dispute

Strict Penalties Imposed for Non-Compliance; License Cancellation Looms for Guruchandrika Builders

In a significant ruling, the National Company Law Tribunal (NCLT) Kochi Bench has issued stringent directives to Guruchandrika Builders and Property Private Limited and associated respondents concerning the Jatayupara Tourism Project (JTP). The tribunal has mandated the deposit of Rs. 38,32,744 into the common pool account, with a stern warning of an 18% interest penalty for non-compliance within the stipulated timeframe. This amount includes an unpaid security deposit of Rs. 10,00,000 and pending revenue share dues of Rs. 28,32,744.

The tribunal's decision comes in response to the failure of the respondents to fulfill their financial obligations under a commercial agreement dated January 1, 2024. The tribunal rejected the respondents' plea for a set-off of loans extended to cover operational expenses, emphasizing that obligations under the license agreement cannot be offset against unrelated claims.

The tribunal further instructed that any future dues must be deposited by the 7th of each succeeding month. It warned that continued non-compliance could result in the cancellation of the license and replacement of the licensee, underscoring the seriousness of adhering to contractual and tribunal directives.

The ruling also highlighted the tribunal's broader role in overseeing the JTP operations to prevent revenue pilferage and ensure compliance with its orders. The tribunal appointed an administrator and chartered accountant to oversee the project's financial operations, reflecting the significance of maintaining transparency and accountability in managing the project's finances.

This decision marks a crucial step in resolving the ongoing financial management issues at JTP and serves as a warning to corporate entities regarding the importance of adhering to legal and contractual obligations. The stakeholders involved in the JTP have been urged to act in accordance with the tribunal's directives to avoid further legal repercussions.

Bottom Line:

Directions issued to ensure compliance with contractual obligations, deposit of dues to the common pool account, and consequences of non-compliance in the context of a project administered under the Companies Act.

Statutory provision(s): Companies Act, 2013 Sections 241, 242, 213

Shawn Jeff Christopher v. Guruchandrika Builders and Property Private Limited, (NCLT)(Kochi Bench) : Law Finder Doc Id # 2807642