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TMI Blog2024 (8) TMI 158X X X X Extracts X X X X X X X X Extracts X X X X ..... THAT:- If not in so many words, then by necessary implication, that until entire gamut of the CIRP process is completed, and whatever be the final outcome, the 4th Respondent s members must continue to suffer. They will not receive transit rent. They will not see any construction activity on site. The statutory promise of redeveloped premises will be denied to them and this will continue for an indefinite period of time. All this because the corporate debtor s asset must be preserved . At whose cost, we have to ask? And for what fault of the slum dwellers? The provisions of the IBC are not meant to defeat slum redevelopment and similar or allied statutes. To hold otherwise would simply be unthinkable. It would mean that a Writ Court would put a premium on corporate wrongdoing and that even a defaulting corporate debtor who had not complied with the terms of a LoI could now use the golden parachute of the IBC to secure through the RP a restraint against the welfare of slum dwellers. The fact cannot be lost sight that in the RP s anxiety to protect the asset of the corporate debtor not a thing is being said in this Petition about how that asset or its preservation can ever, let alone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ming from a Petitioner. 4. Mr Chinoy appears for Respondent No 4, the slum society. It has filed an Affidavit in Reply. The other Respondents, namely, the SRA and the State Government do not think that an Affidavit in Reply is necessary. 5. What this Petition seeks is an order of this Court at the instance of this RP staying an acquisition process under the Slum Rehabilitation Act, 1995. The developer, Truly Creative Developers Pvt Ltd ( Truly Creative ) is a corporate well known for all the wrong reasons. It has, over the years, managed to do everything humanly possible to betray its chosen name. In that negative sense, it has been truly creative. There are, to our knowledge, at least four other projects where this developer has utterly failed to perform. This is just one more. 6. The plot in question is CTS Nos 87, 87/1 to 87/3 of Village Magathane, Taluka Borivali (East). It is a sizeable plot of just over 14,000 sq mts. Truly Creative bought this plot on 21st March 1997. Until now its name is not on the property card. There is no explanation for this but we will let this pass. 7. There were already slums on the plot when Truly Creative bought it. Truly Creative sought to implem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... society by majority of more than 70% rejected this proposal and appointed one Western Habitat as the developer. There is a report of the Assistant Registrar. Meanwhile, Truly Creative challenged the AGRC order of 25th October 2019 in Writ Petition (L) No 3512 of 2019. On 18th December 2019, a Single Judge of this Court declined any interim relief. Truly Creative did nothing. Ultimately, its Writ Petition was dismissed on 17th January 2024 for a failure to cure filing defects. 10. Now this was a peculiar situation. Truly Creative was not only a developer but also was an owner. Consequently, the society had to ensure that title to the property was validly acquired to continue with slum rehabilitation. Therefore, the society applied on 18th November 2021 to the SRA to initiate steps in acquisition and for a declaration of the slum plot as a slum rehabilitation area (a distinct concept) under the provisions of Section 3C of the Slum Act. Shortly thereafter, SRA issued a Notification dated 23rd May 2022 saying that there was a policy decision to declare all slums on public and private lands and which existed prior to 1st January 2011 and which had been declared as slums under Section 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erstanding that the acquisition would not proceed. When the society disputed this position, we permitted an amendment. That has been carried out. 16. The only two points are these. First, can it ever be suggested that the provisions of the IBC and specifically the pendency of a CIRP meant to protect the assets of a potentially insolvent corporate debtor can ever prevail over the considerations of a welfare statute and the concerns of individual citizens for whom that welfare statute is intended, such as the Slum Act? We note this because it is solemnly being suggested, if not in so many words, then by necessary implication, that until entire gamut of the CIRP process is completed, and whatever be the final outcome, the 4th Respondent s members must continue to suffer. They will not receive transit rent. They will not see any construction activity on site. The statutory promise of redeveloped premises will be denied to them and this will continue for an indefinite period of time. All this because the corporate debtor s asset must be preserved . At whose cost, we have to ask? And for what fault of the slum dwellers? 17. This is by no means the first time that we have had these submis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f companies can come at the cost of residents of the city and of persons who have without homes, shelter and without financial means to acquire temporary alternate accommodation. We will not accept this under any circumstances. Corporate resuscitation will not be permitted at the cost of individual city residents rights to have a redeveloped home and to receive transit rent. 8. The Government itself is alive to this situation. It has taken policy decisions in that regard. We need not visit those at this stage. 9. AA Estates itself is no stranger to this either. It has taken precisely this argument in an even more dramatic scenario, that of the collapse of an entire building called Govinda Tower many decades ago in 1998. AA Estates was before us as a Respondent in Interim Application (L) No 26072 of 2022 that we disposed of by our order and judgment dated 13th December 2023, reported as Nagesh Madhava Surana Ors v State of Maharashtra Ors. We dealt with precisely these submissions including the question of vested rights if any in AA Estates, Section 14 of the IBC and the consideration of justice and equity inter alia from paragraph 43 onwards. Even there it was argued that possessio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it of those persons for whom the Slum Act is intended and for whose benefit essentially Truly Creative obtained an LoI in the first place. 22. This is the cardinal point that the RP has completely missed. it is not merely a question of ownership. The moment Truly Creative applied for an LoI it assumed an obligation to provide rehabilitation units and, in the meantime, transit rent or transit accommodation to eligible slum dwellers. That was a condition precedent to its acquiring free sale rights. The value of the land today to any resolution professional is not of the land being in its present state of slum encroachment. If there is a resolution applicant interested in it, it is only because of the free sale development potential that it represents. Truly Creative continues to believe that despite breaching the terms of the LoI it is still entitled to that free sale benefit as a slum project. It is not. 23. The last argument on behalf of the RP is that it ought to have been given a preferential right to self-redevelop. The argument is so unstatable that we can scarcely credit that it is being made. This is understandable where no LoI is issued at all or has been issued to somebody ..... X X X X Extracts X X X X X X X X Extracts X X X X
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