2022 (7) TMI 1348 - Tri - Insolvency and Bankruptcy

Seeking direction against the Respondent to handover the peaceful custody and control of the project side being real estate project Sampada Livia - also seeking directions to the Local District Administration under Regulation 30 of CIRP Regulation to provide necessary assistance to the Applicant for taking position of the project site - Whether the order initiating CIRP was obtained in a fraudulent manner? - HELD THAT - We do not think that the said question can be gone into by this Tribunal in the present IA in as much as an appeal against the order dated 18.04.2022 initiating CIRP of the Corporate Debtor is under challenge before the Hon'ble NCLAT in SLB WELFARE ASSOCIATION VERSUS M/S PSA IMPEX PRIVATE LIMITED, M/S RUDRA BUILDWELL CONSTRUCTIONS PVT. LTD. 2022 (11) TMI 294 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI and is pending for adjudication. Further, there is no order of stay granted by Ld. Appellate Tribunal in the operation of CIRP of the Corporate Debtor or restraining the IRP to proceed with the CIRP. Moreover, it is the settled law that the provision under Section 238 IBC has overriding effect over the provisions of other legislations including provisions of the RERA Act 2016. Further, the Resolution Professional is duty bound under the provisions of Section 18 of IBC, 2016 to perform certain duties and obligations as envisaged under the said provision including taking over the control and custody of the assets of the Corporate Debtor under Section 18 (f). The Respondent, SLB Welfare Association are directed to handover peaceful possession and custody of the project in question to the Applicant within two weeks and file compliance report before this Tribunal and the Local District Administration are also directed to provide necessary assistance to the Applicant for taking possession of the project site, if required. Application allowed.

Summary

Issues Involved:
1. Application under Section 60(5) of IBC seeking direction to hand over control of a real estate project.
2. Dispute regarding ownership and possession rights of the project site between the Corporate Debtor and SLB Welfare Association.
3. Conflict between RERA Act and IBC regarding the completion of the project.
4. Appointment of Authorized Representative of Financial Creditor under Section 21(6A)(b).

Analysis:

1. The first issue pertains to an application filed by the Interim Resolution Professional (IRP) seeking direction under Section 60(5) of the Insolvency and Bankruptcy Code (IBC) to hand over control of a real estate project, "Sampada Livia," to the Corporate Debtor. The IRP encountered obstruction from SLB Welfare Association, claiming ownership due to orders passed by RERA Authorities. The Tribunal held that the IBC overrides other laws, including RERA, and directed SLB Welfare Association to hand over possession within two weeks, emphasizing the IRP's duty under Section 18 of the IBC to take control of the Corporate Debtor's assets.

2. The second issue involves a dispute over ownership and possession rights of the project site between the Corporate Debtor and SLB Welfare Association. SLB Welfare Association argued that the project was transferred to them by RERA Authorities and did not belong to the Corporate Debtor. However, the Tribunal ruled in favor of the IRP, stating that the project site still belonged to the Corporate Debtor and must be handed over to facilitate the completion of duties under the IBC.

3. The third issue addresses the conflict between the RERA Act and the IBC regarding the completion of the project. SLB Welfare Association contended that the RERA order superseded the IBC proceedings. In response, the IRP highlighted the Supreme Court's judgment emphasizing the overriding effect of the IBC over other laws. The Tribunal upheld the IRP's argument, asserting that the RERA order did not grant ownership or possession rights to SLB Welfare Association, thereby directing the handover of the project site to the IRP.

4. The final issue concerns the appointment of an Authorized Representative of the Financial Creditor under Section 21(6A)(b). The IRP sought the appointment of Mr. Akarsh Kashyap as the Authorized Representative, supported by the majority of home buyers. The Tribunal, considering the circumstances, directed the appointment of Mr. Akarsh Kashyap as the Authorized Representative of the Financial Creditor in the class, thereby granting the relief sought in the application.

In conclusion, the Tribunal's judgment addressed the disputes regarding ownership, possession, and completion of a real estate project under the IBC, emphasizing the IRP's duties and the overriding effect of the IBC over conflicting laws. Additionally, the appointment of the Authorized Representative was resolved in favor of the Financial Creditor, ensuring representation in the insolvency proceedings.