9911796707
TMI Blog2023 (3) TMI 1175X X X X Extracts X X X X X X X X Extracts X X X X ..... rs. Rachna Singh and Mr. Ajay Singh, who were Homebuyers/ Allottees in the project being developed under name "Winter Hills 77 Gurgaon" by M/s. Umang Realtech Pvt. Ltd. (Corporate debtor), for initiation of the 'Corporate Insolvency Resolution Process' (in short 'CIRP'). The Application was admitted in terms of Section 7(5) (a) of the I & B Code, 2016 by the 'Adjudicating Authority' (National Company Law Tribunal, New Delhi, Principal Bench) in the matter of 'Rachna Singh & Anr. Vs. Umang Realtech Pvt. Ltd.' in CP (IB) 1564 (PB)/2018 dated 20.08.2019. By the same order, the 'Adjudicating Authority' declared moratorium in terms of Section 14 of the I & B Code, 2016. 3. Subsequently, an appeal was filed before this 'Appellate Tribunal' in CA (AT) (Insolvency) No. 926 of 2019 which was disposed off vide order dated 04.02.2020 with suitable observations and directions regarding 'Reverse CIRP'. 4. The 'Appellant' has, sought clarification arising out of this 'Appellate Tribunal' order dated 04.02.2020 with the following prayers :- "(i) pass an appropriate order clarifying that the original order dated 04.02.2020 (Annexure A-1) passed by this Hon'ble Appellate Tribunal in Company App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion Application bearing No. 3171-2020 and "HARERA" passed order dated 12.02.2021 for attachment of three bank account of the 'Corporate debtor' for recovery of decretal amount of Rs. 76,68,788/-. 9. The 'Corporate Debtor' through the 'IRP' filed an 'Appeal', bearing No. 134 of 2021 (RERA Appeal) before "RERA Appellate Tribunal" which is pending. While hearing the 'Appeal', the "RERA Appellate Tribunal" vide order dated 27.07.2021, directed the IRP/ Respondent to file an 'Affidavit' to clarify whether the 'CIRP' also cover the project "Monsoon Breeze-II". The 'Appellant' states that IRP/Respondent filed his 'Affidavit' dated 28.08.2021 before 'RERA Appellate Tribunal' stating that the 'CIRP' is applicable only to "Winter Hills" but the moratorium is imposed against the 'Corporate Debtor'. 10. The 'Appellant' has alleged that despite specific directions contained in this 'Appellate Tribunal' order dated 04.02.2022, the IRP/ Respondent enlarged the scope of 'CIRP' to the other projects of the 'Corporate Debtor'. The 'Appellant' has further alleged that IRP/Respondent has misinterpreted the order of this 'Appellate Tribunal' contained in para 21 which confine 'CIRP' only to a partic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " are not de-linked with the existing proceedings, their right will be adversely affected which is not the intent of I & B Code, 2016 and also not intended by this 'Appellate Tribunal' in its order dated 04.02.2020. 14. The 'Appellant' also took pains to explain the rational for the present application on the premise that once the CIRP/ Reverse CIRP is restricted only for one project i.e. "Winter Hills-77", there is no question of continuing CIRP and consequently moratorium on other projects of the 'Corporate Debtor'. As per the 'Appellant', this 'Appellate Tribunal' in its order dated 04.02.2020 had in fact clarified the same aspect by suitable illustration. The 'Appellant' therefore requested that his prayers may be allowed and it may be clarified that the 'Reverse CIRP' shall be limited to only "Winter Hills-77" and not to any project and therefore other projects of the 'Corporate Debtor' are free from the moratorium and consequently the 'Corporate Debtor' should be allowed to go on to complete the projects. The 'Appellant' pleaded that this will be just, fair and based on equity, taking care of all the stakeholders of the 'Corporate Debtor' as per intent of I & B Code, 2016 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The 'Appellant' emphasised that since this 'Appellate Tribunal' order dated 04.02.2022 contained all details regarding who will invest, how and when distribution will be made, time frame within which project will be completed and possession will be handed over, payments to the 'Financial Creditors', 'Operational Creditors', etc., thus, truly speaking this tantamount to approval of the 'Resolution Plan', accordingly in a manner CIRP ended. The 'Appellant' urged that his prayers may be allowed. 17. Per-contra IRP/Respondent has denied all the averments made by the 'Appellant' labelling these averments as false, misleading and mischievous and termed the present I.A. No. 2187 of 2021 as gross misuse and abuse of process of law, which is liable to be dismissed devoid of any merits with cost. 18. The IRP/ Respondent submitted that by present I.A No. 2187 of 2021 seeking clarification, the 'Appellant' is trying to obtain reliefs which is otherwise not entitled under law. The IRP/ Respondent further submits that the 'Adjudicating Authority' vide its order dated 20.08.2019 admitted Section 7 application against the 'Corporate Debtor' and initiated 'CIRP' and also declared moratorium in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their flats and not to set aside the 'Adjudicating Authority' order dated 20.08.2019 or terminate/ suspend other provisions of order of the 'Adjudicating Authority'. 22. The IRP/ Respondent submits that intent of this 'Appellate Tribunal' in order dated 04.02.2020 again becomes clear where it has been held that in case the 'Promoter' failed to comply with the undertaking to invest funds or it fails to co-operate with the 'IRP', then the process of the 'CIRP' under I & B Code, 2016 would continue, which makes it clear that in case of failure of 'Reverse CIRP', the 'CIRP' of the 'Corporate Debtor' will automatically get assumed. Thus, moratorium of the Section 14 of the 'Corporate Debtor' as a whole has to be continued. 23. As per IRP/ Respondent, the 'Adjudicating Authority' in its order dated 20.08.2019, in Para-26 has authorised him to perform all functions as stipulated in Section 15, 17, 18, 19, 20 & 21 of the I & B Code, 2016. The IRP/ Respondent submitted that in terms of Section 17 of the I & B Code, 2016, the management of the 'Corporate Debtor' stands suspended and the 'IRP' has taken over day to day affairs of the 'Corporate Debtor'. The IRP/ Respondent also mentioned th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e concept of CIRP only in the project "Winter Hills-77" and not on other projects which are continued on going concern basis. The IRP/ Respondent claimed that no adverse impact on the rights of home allotees of Monsoon Breeze-II has been caused due to 'Reverse CIRP' in terms of this 'Appellate Tribunal' order dated 04.02.2020. The IRP/ Respondent emphasised that any modification on the order of this 'Appellate Tribunal' dated 04.02.2020 based on 'Appellant's claim on lifting of CIRP/ moratorium on other projects and assets of the 'Corporate Debtor' may impact chances of putting the 'Corporate Debtor' back on the rails. The IRP/ Respondent amplified that for argument sake, if moratorium is lifted on other projects of the 'Corporate Debtor' and in case the present 'Reverse CIRP' fails for want of adequate finances by the 'Corporate Debtor' or due to non-cooperation of the 'Corporate Debtor' or due to any other reason, there will be no remedies available to the IRP/ Respondent to carry out its obligations as stipulated under I & B Code, 2016 read with the order of the 'Adjudicating Authority' dated 20.08.219 and this 'Appellate Tribunal' order dated 04.02.2020. 27. Summarising, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case may be within thirty days of the commencement of the said Act, failing which the application shall be deemed to be withdrawn before its admission.] Explanation. - For the purposes of this sub-section, a default includes a default in respect of a financial debt owed not only to the applicant financial creditor but to any other financial creditor of the corporate debtor. (2) The financial creditor shall make an application under sub-section (1) in such form and manner and accompanied with such fee as may be prescribed. (3) The financial creditor shall, along with the application furnish - (a) record of the default recorded with the information utility or such other record or evidence of default as may be specified; (b)the name of the resolution professional proposed to act as an interim resolution professional; and (c) any other information as may be specified by the Board. (4) The Adjudicating Authority shall, within fourteen days of the receipt of the application under sub-section (2), ascertain the existence of a default from the records of an information utility or on the basis of other evidence furnished by the financial creditor under sub-section (3): [Pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y or in the possession of the corporate debtor. [Explanation.-For the purposes of this sub-section, it is hereby clarified that notwithstanding anything contained in any other law for the time being in force, a licence, permit, registration, quota, concession, clearance or a similar grant or right given by the Central Government, State Government, local authority, sectoral regulator or any other authority constituted under any other law for the time being in force, shall not be suspended or terminated on the grounds of insolvency, subject to the condition that there is no default in payment of current dues arising for the use or continuation of the license or a similar grant or right during moratorium period;] (2) The supply of essential goods or services to the corporate debtor as may be specified shall not be terminated or suspended or interrupted during moratorium period. [(2A) Where the interim resolution professional or resolution professional, as the case may be, considers the supply of goods or services critical to protect and preserve the value of the corporate debtor and manage the operations of such corporate debtor as a going concern, then the supply of such goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the corporate debtor." 26. The Interim Resolution Professional shall perform all his functions religiously and strictly which are contemplated, interalia, by Sections 15, 17, 18, 19, 20 & 21 of the Code. He must follow best practices and principles of fairness which are to apply at various stages of Corporate Insolvency Resolution Process. His conduct should be above board & independent; and he should work with utmost integrity and honesty. It is further made clear that all the personnel connected with the Corporate Debtor, erstwhile directors, promoters or any other person associated with the Management of the Corporate Debtor are under legal obligation under Section 19 of the Code to extend every assistance and cooperation to the Interim Resolution Professional as may be required by him in managing the affairs of the Corporate Debtor. In case there is any violation committed by the ex-management or any tainted/illegal transaction by ex- directors or anyone else the Interim Resolution Professional/ Resolution Professional would be at liberty to make appropriate application to this Tribunal with a prayer for passing an appropriate order. The Interim Resolution Professional/ Res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed them to pay their respective outstanding dues. (ii) There are 453 number of allottees who have paid their respective consideration amount in full and have taken possession. The list of 453 Allottees who have taken the possession after making payment as per the demand notice issued has been annexed and marked as Annexure -1. There are 26 allottees who have paid the consideration amount in full, but have not taken possession of their respective apartment/flat from the Corporate Debtor through IRP. The list of these 26 Allottees who have paid the amount as per the demand notice issued has been annexed and marked as Annexure-2. (iii) There are 142 allottees who have defaulted in making payment of their instalments due to the Corporate Debtor. The IRP has issued demand notices to make the payment of the outstanding amount. However, they have neither paid the outstanding amount not have come to take possession. The list/ details of the defaulter-allottees along with date of default, amount in default and percentage of default has been annexed and marked as Annexure-3. (iv) As on 16.01.2020, the Corporate Debtor has received NOC in respect 123 number of allottees for execution of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recovery proceedings and the Corporate Debtor and/or Uppal Housing Private Limited may not be burdened with additional amount in satisfying the order passed by the Court/Consumer Forum/ RERA Authority till the works mentioned are complete. Further, necessary directions is required so that the amount deposited by the allottees is utilized exclusively for the purpose of providing amenities, facilities and Completion of work in the respective projects. It is stated that some of the allottees are adopting arm twisting tactics against Uppal Housing for recovery of the amount as they are not willing to take possession of their flats/apartments. 20. We have already noticed that the Financial Creditors like 'JM Financial Credit Solutions Ltd.', their claim is also satisfied at the time of final registration of the flats. Mr. Manoj Kr. Singh, learned counsel appearing on behalf of 'Uppal Housing Pvt. Ltd.', on instructions from Mr. Sanjeev Jain, Director Finance of Uppal Housing Pvt. Ltd., assured that the dues of the 'Financial Institutions' such as 'JM Financial Credit Solutions Ltd.' and others, if any, with regard to the present project i.e. Winter Hills - 77, Gurgaon will be also sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... frastructure companies in the interest of the allottees and survival of the real estate companies and to ensure completion of projects which provides employment to large number of unorganized workmen. 26. The 'Uppal Housing Pvt. Ltd.' - Intervenor (One of the Promoter) is directed to cooperate with the Interim Resolution Professional and disburse amount (apart from the amount already disbursed) from outside as Lender (financial creditor) not as Promoter to ensure that the project is completed with the time frame given by it. The disbursement of amount which has been made by 'Uppal Housing Pvt. Ltd.' and the amount as will be generated from dues of the Allottees (Financial Creditors) during the Corporate Insolvency Resolution should be deposited in the account of the Company (Corporate Debtor) to keep the Company a going concern. The amount can be utilized only by issuance of cheque signed by the authorised person of the Company (Corporate 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 Winter Hill - 77 Gurgaon Project. Banks ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to set aside the order dated 20.08.2019. This 'Appellate Tribunal' also notes that accordingly while disposing the appeal against the order dated 20.08.2019 in CP (AT) (Ins.) No. 926 of 2019, the order of 'Adjudicating Authority' did not set aside and similarly no error was found therein in the 'impugned order' 20.08.2019 passed by the 'Adjudicating Authority'. This 'Appellate Tribunal', taking the support of the ratio as laid down by the Hon'ble Supreme Court of India in the case of Committee of Creditors of Essar Steel India Limited vs. Satish Kumar Gupta & Ors. [(2020) 8 SCC 531], regarding economic experimentation, took on challenge for finding new dynamic solution and laid down for the first time the concept of 'Reverse CIRP' along with other aspect related to the case in Para Nos. 13, 15, 20, 21, 25, 26, 29, 30 & 31 of (04.02.2020) as discussed in preceding paragraphs. 33. Similarly, Section 14 of the I & B Code, 2016, is explicit and without any ambiguity which prescribes that once CIRP has been admitted, the entire 'Corporate Debtor' is placed under management of the 'IRP' who shall conduct day to day affairs of the 'Corporate Debtor' and moratorium automatically find it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate Debtor' and cannot affect other projects of the same 'Corporate Debtor'. 37. This 'Appellate Tribunal' also notice that even the Hon'ble Supreme Court of India in the Civil Appeal titled as Narendra Singh vs. M/s Umang Realtech Pvt. Ltd. bearing Civil Appeal No. 2942 of 2020 vide Diary No. 13889 of 2020, dismissed the Appeal filed by Mr. Narendra Singh challenging order dated 04.02.2020 passed by this 'Appellate Tribunal' holding that there is no ground to interfere with the 'impugned orders' passed thereby acknowledging the concept of 'Reverse CIRP' to be Project Specific. 38. This 'Appellate Tribunal' also amplified that for balancing the rights and obligations of all the stakeholders, endeavour need to be made to maximise the assets of the particular project rather than all the assets of the 'Corporate Debtor' involving different projects. This order also laid down the concept of 'Reverse CIRP' on a project basis given in particular context and based on relevant parameters in contrast to other project of the 'Corporate Debtor' involving different stakeholder as well as different approval obtained from different authorities. Even further, this 'Appellate Tribunal' clarifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t can inferred that other projects are out of bound of its order dated 04.02.2020. Although, the aspects of moratorium and impact of 'Reverse CIRP'/ moratorium has not been discussed, amplified or elaborated in the above discussed order dated 04.02.2020, the intent becomes more clear where it has been stipulated that once the project is completed, the 'IRP' was put under obligation to move an application before the 'Adjudicating Authority' (NCLT, New Delhi) with the report of completion and asking for disposal of application under Section 7 filed by 'Rachna Singh' and 'Ajay Singh'. The order took prudent caveat only in case of failure on the part of the 'Promoter/Uppal Finance Limited' in bringing finance, non-compliance of the undertaking given by the Promoters' or non-cooperation with the 'IRP', the IRP/ Respondent was authorised to take the 'CIRP' toward logical conclusion as per provision of the I & B Code, 2016. 41. This 'Appellate Tribunal' consciously notes that Section 14 of the I & B Code, 2016 recognise moratorium of the 'Corporate Debtor' implying that under such moratorium all assets and liabilities are covered by provision of moratorium and protected from any detrimen ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
