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TMI Blog2021 (3) TMI 169X X X X Extracts X X X X X X X X Extracts X X X X ..... Process, showing encouraging results and safeguarding the interests of all stake holders must be given one more chance of proving result oriented. We make it clear that though we are convinced about delay having been occasioned on the part of Promoter in adhering to the directions, as regards, infusion of ₹ 13.88 crores in Corporate Debtor within 30 days from the date of judgment viz. by 5th of March, 2020, we stop short of holding that the Reverse Corporate Insolvency Resolution Process contemplated in terms of the judgment dated 5th of February, 2020 has aborted due to non-compliance on this score, the single instance of default on the eve of outbreak of COVID-19 pandemic and imposition of lockdown being viewed only as an aberration. This is not with a view to condone the default but only to promote the ends of justice as giving further lease of life to the visionary step taken in pursuance of an experiment in the form of Reverse Corporate Insolvency Resolution Process must not give way to a single instance of default which happened just on the eve of imposition of lockdown due to outbreak of COVID-19 pandemic. While allowing the Application seeking extension in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Essar Steel India Limited vs. Satish Kumar Gupta and Ors. (2019) SCC OnLine SC 1478 . Taking a cue therefrom this Appellate Tribunal in Flat Buyers Association Winter Hills 77, Gurgaon vs. Umang Realtech Private Limited through IRP Ors. - Company Appeal (AT) (Insolvency) No. 926 of 2019 decided on 4th February, 2019 embarked upon an experiment to introduce the concept of Reverse Corporate Insolvency Resolution Process , which envisaged resolution in real estate sector (Infrastructure Companies) involving allottees/ home buyers as stake holders by looking beyond the dotted line of approval of third party Resolution Plan and devising ways and means of Insolvency Resolution involving all stake holders. The IRP was directed to collate the claims and based on the voting share of allottees find out whether the allottees would agree to a proposal for investment by promoter as an outsider Financial Creditor and to allow it to cooperate with IRP to complete the project. This Appellate Tribunal noticed that one of the Promoter Uppal Housing Private Limited/ Intervenor agreed to play role of a lender (Financial Creditor) while remaining outside the CIRP process. Such proposal w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Debtor) with counter signature by the Interim Resolution Professional. The Bank in which the Corporate Debtor (Company) has account the amount should be deposited only for the purpose of completion of the Project. Banks will allow the cheques for encashment only with the counter signature of the Interim Resolution Professional. ii. The flats/apartments should be completed in all aspect by 30th June, 2020. All internal fit outs for electricity, water connection should be completed by 30th July, 2020. The allottees are directed to deposit their balance amount and pay 90% without penal interest, if not deposited, by 15th March, 2020. The Allottees in whose favour possession has been offered and clearance has been given by the competent authority are bound to pay the cost for registration and directed to deposit registration cost to get the flats/apartments registered after paying all the balance amount in terms of the agreement. iii. Common area such as Swimming Pool, Club House etc. as per the agreement, be also completed by 30th August, 2020. The allottees are allowed to form Residents Welfare Association and get it registered to empower them to claim the common areas. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undertaking and making investment as Financial Creditor or not extending cooperation to the IRP/RP, the resolution process would be completed by the Adjudicating Authority. 4. I.A. No.2166 of 2020 has been filed by Shri Rajesh Goyal seeking extension of timelines laid down in the judgment dated 5th of February, 2020 rendered by this Appellate Tribunal in Company Appeal (AT) (Insolvency) No.1056 of 2019 (hereinafter referred as the Appeal ) purportedly in light of the change in circumstances caused by outbreak of COVID-19 pandemic and lockdowns imposed in various parts of the Country after the aforesaid judgment. It is submitted that due to imposition of nationwide lockdown after outbreak of COVID-19 pandemic, the restrictions imposed resulted in unprecedented financial crisis, loss of lives, disruption of construction activity and operations of the corporate sector more particularly the financial as well as the real estate sectors. It is further submitted that the Central Government and various instrumentalities of State, have recognized the hardship and extended timelines for completion of projects. It is submitted that the aforesaid judgment was delivered just before outbreak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... culated as per BBA as regards receivables from allottees of Greater Noida Project and the additional area. As regards receivables from projects situated in Delhi, it suggested that Shri Rajesh Goyal be directed to provide and utilize money in addition to ₹ 5.06 crores already invested by him for construction purpose. It was suggested that IIFL Home Finance Limited may be directed to release the fund immediately. It was further suggested that M/s AGS Developers Private Limited, M/s GBS Marketing Private Limited and M/s Neel Builders Private Limited may be directed to release the funds immediately as per their LOI s. It was lastly suggested that Indiabulls may be directed to amicably settle the dispute and surrender 70% of the sale proceeds of the said property in favour of general balances of the creditors to be utilized for completion of the real estate project. 8. Indiabulls Commercial Credit Private Limited has filed affidavit stating therein that IIFL Home Finance Limited was obligated to disburse an amount of ₹ 15 crores in favour of the Corporate Debtor in three tranches of ₹ 5 crores each, disbursement of first tranche within 30 days from the date of judg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry No.22398 dt. 29.9.2020) indicated that the Applicant failed to comply with the directions as contained in judgment dated 5th of February, 2020. This has been projected in a tabular form, which is reproduced hereinbelow: - Sno. Particulars Timeline as per order dated 5.2.2020 Complied/ Not Complied 1. ₹ 13.88 Crs, to be invested in the Corporate Debtor within 30 days i.e. by 5.3.2020 Not Complied 2. ₹ 25.94 Crs, to be invested in the Corporate Debtor within 60 days by 5.4.2020 Not Complied 3. ₹ 30.15 Crs, to be invested in the Corporate Debtor within 90 days by 5.5.2020 Not Complied 4. Construction of flats/ apartments to be completed By 30.6.2020 Not Complied 5. All internal fit outs for electricity water connection to be completed B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 5.24 crores and he undertakes to infuse balance within two weeks. 16. The Applicant has given proposed/ revised extended timeline (filed vide Diary No.24606 dt. 12.1.2021), which is extracted herein below: - Sl. No. Event Original Timelines as per order dated 05.02.2020 Revised timelines (exclusion upto 15.01.2021) Proposed extended timelines (90 days) 1 Flat should be completed in all aspects (Page 62 paragraph 20(ii)) 30.06.2020 15.06.2021 15.09.2021 2 All internal fit-outs for electricity, water connection (Page 62 paragraph 20 (ii)) 30.07.2020 15.07.2021 15.10.2021 3 Common area such as Swimming Pool, Club house etc. as per agreement (Page 62 paragraph 20 (iii)) 30.08.2020 15.08.2021 15.11.2021 4 Refund of 30% of the Principal amount to the Allottees (Page 62, paragrap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... timelines envisaged in the judgment dated 5th of February, 2020 without altering, substituting or modifying its structural terms. This, we believe, will create a win-win situation for all stake holders, though extension of time would result in further delay of delivery of flats to the Home Buyers awaiting to step in into their dream homes. We make it clear that though we are convinced about delay having been occasioned on the part of Promoter in adhering to the directions, as regards, infusion of ₹ 13.88 crores in Corporate Debtor within 30 days from the date of judgment viz. by 5th of March, 2020, we stop short of holding that the Reverse Corporate Insolvency Resolution Process contemplated in terms of the judgment dated 5th of February, 2020 has aborted due to non-compliance on this score, the single instance of default on the eve of outbreak of COVID-19 pandemic and imposition of lockdown being viewed only as an aberration. This is not with a view to condone the default but only to promote the ends of justice as giving further lease of life to the visionary step taken in pursuance of an experiment in the form of Reverse Corporate Insolvency Resolution Process must not give ..... X X X X Extracts X X X X X X X X Extracts X X X X
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