Court Passes Sweeping Interim Orders in Renox Thrive Dispute; Bank Accounts Frozen, Construction and Financial Activities Restricted

New Delhi/Greater Noida: In a significant development likely to have major implications for homebuyers, investors, lenders, contractors and vendors associated with the Renox Thrive housing project in Sector-10, Greater Noida, the court has passed a series of stringent interim orders against Nivas Promoters Private Limited, Renowned Buildtech Private Limited, Rahul Chamola and Shailender Sharma in proceedings involving allegations of fraudulent transfer of shareholding, suppression of material facts before statutory authorities, unauthorized borrowings and dishonoured financial commitments amounting to several crores of rupees.

The dispute originates from the project initially launched as One Leaf Troy, which was subsequently de-registered and replaced by the project now being marketed as Renox Thrive. According to the proceedings, the shareholder alleged that its 11% shareholding comprising 1,540 equity shares was illegally and fraudulently transferred without consent, authorization or execution of any transfer documents despite the original share certificates remaining in possession of the shareholder at all times.

The allegations further state that the transfers were reflected in statutory records and annual filings without authority and formed part of a larger attempt to defeat contractual shareholder protections and facilitate a complete takeover of the project company.

Following discovery of the alleged fraudulent transfer of shares, an FIR was registered in relation to the allegations concerning illegal transfer of shares and manipulation of corporate records. The criminal proceedings continue to remain pending and involve allegations against the company and persons associated with its management and control, including Rahul Chamola and Shailender Sharma.

The proceedings further disclose that multiple cheques issued under a settlement arrangement running into several crores of rupees were dishonoured. Significantly, several cheques were returned with the banking endorsement “Account Closed”, resulting in multiple cheque dishonour proceedings currently pending against the company and its directors. The existence of multiple cheque bouncing cases, coupled with the alleged fraudulent transfer of shares, has substantially increased the legal exposure surrounding the project and its promoters.

One of the most serious allegations concerns the manner in which the earlier RERA registration for One Leaf Troy was withdrawn and a fresh RERA registration was subsequently obtained for Renox Thrive. According to the proceedings, the fresh registration was allegedly procured by suppressing material facts, concealing pending disputes and litigation, withholding information regarding existing shareholder rights and failing to disclose contractual restrictions governing the project land and affairs of the company.

The shareholder has specifically alleged that the fresh registration of Renox Thrive was obtained by furnishing incorrect information and by making disclosures that failed to reveal the true status of the disputes surrounding the project and the company. According to the allegations placed before the court, had the regulatory authorities been informed of the pending litigation, shareholder disputes and contractual restrictions attached to the project, the fresh registration could not have been granted in the manner in which it was obtained.

As a result, the validity of the RERA registration of Renox Thrive itself has now come under challenge and the continuation of the registration may ultimately depend upon the outcome of the ongoing judicial and regulatory proceedings. Legal observers note that where regulatory approvals are alleged to have been obtained through suppression of material facts or incorrect disclosures, the approvals themselves become vulnerable to scrutiny and possible cancellation.

Another important aspect of the dispute concerns an alleged unauthorized borrowing undertaken by the company. According to the shareholder agreement, the company was prohibited from taking loans or creating charges over company assets exceeding ₹1 crore without obtaining prior written consent of the shareholder.

Despite this restriction, Nivas Promoters Private Limited allegedly obtained financial facilities of approximately ₹60 crore from Bajaj Housing Finance Limited and created charges over the project assets without obtaining the mandatory approval of the shareholder and without even informing the shareholder of the transaction. The validity of the borrowing and the charge created over the project assets have therefore also become part of the ongoing dispute.

After considering the material placed before it, the court granted extensive interim protection and passed a series of sweeping interim directions designed to preserve the subject matter of the dispute and protect the rights of the shareholder pending adjudication of the proceedings.

Among the interim protections granted, the court restrained the defendants from developing, constructing, marketing or commercially exploiting projects on the project land in violation of the shareholder agreement and existing contractual obligations. The defendants have further been restrained from collecting money from prospective purchasers in relation to the project and from creating third-party rights in favour of purchasers, investors or other parties.

Significantly, the court also directed freezing and restrictions on operation of the relevant bank accounts and restrained withdrawal of funds corresponding to the outstanding settlement liability, thereby preventing diversion or dissipation of project funds during the pendency of the proceedings.

The interim orders further restrain the defendants from transferring, mortgaging, alienating, disposing of or creating third-party interests in the assets of the company. The defendants have also been restrained from taking further loans, creating additional charges over company assets, entering into substantial contracts, changing the board of directors or altering the shareholding structure of the company without compliance with the shareholder rights and contractual restrictions governing the company.

The cumulative effect of these interim directions is that the ability of the defendants to continue construction activities, raise finances, collect sale proceeds, market inventory, create third-party rights or commercially exploit the project stands substantially restricted during the pendency of the proceedings.

The developments are expected to create significant concern among prospective homebuyers, investors, banks, financial institutions, contractors, suppliers and channel partners dealing with Renox Thrive, Nivas Promoters Private Limited, Rahul Chamola, Shailender Sharma and associated entities.

Persons proposing to purchase units, provide financing, undertake contracting work or enter into commercial arrangements connected with the project have been advised to undertake extensive legal due diligence and independently verify the status of the ongoing proceedings and court directions before entering into any transaction.

The matter is being closely watched within legal and real estate circles as a significant dispute involving allegations of fraudulent share transfers, procurement of regulatory approvals through suppression of material facts, unauthorized borrowing, cheque dishonour proceedings and misuse of corporate structures in relation to a major housing development project in Greater Noida.

The allegations and claims remain subject to final adjudication before the competent courts and authorities.