Exclusion of commercial spaces from the assets of the Corporate ...

Debtor's commercial spaces not excluded from insolvency process; dissenting creditors entitled to refund or alternate option.

Case Laws     IBC

November 25, 2024

Exclusion of commercial spaces from the assets of the Corporate Debtor and the entitlement of dissenting Financial Creditors u/s 30(2)(b) of the Insolvency and Bankruptcy Code (IBC). The key points are: The allotment of commercial spaces and lease deeds do not confer ownership rights on the allottees. The Corporate Debtor continues to own the assets, and the commercial spaces cannot be excluded from the Corporate Insolvency Resolution Process (CIRP). The dissenting Financial Creditors are entitled to either 100% refund of the principal amount within 90 days or an alternate option for commercial space, as per the Resolution Plan. This satisfies the requirement u/s 30(2)(b) of the IBC, and there are no grounds to interfere with the Adjudicating Authority's order approving the Resolution Plan. The rejection of applications seeking exclusion of commercial spaces and registration of sale deeds was upheld. However, the allottees were granted liberty to file appropriate applications for claiming rent subsequent to the commencement of CIRP or as CIRP costs.

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