Resolution Professional cannot include subsidiary assets in holding company insolvency without proper authorization and lessor approval

Greater Noida Industrial Development Authority (GNIDA) Versus Roma Unicon Designex Consortium, Earth Infrastructures Limited, Alfa Corp Development Pvt. Limited, Sh. Sanjay Bhalla (Representative) Member of Monitoring Committee, Roma Unicon Designex Consortium, Earth Towne Flat Buyers Association, HDFC Bank Limited, Monitoring Committee

Greater Noida Industrial Development Authority (GNIDA) Versus Roma Unicon Designex Consortium, Earth Infrastructures Limited, Alfa Corp Development Pvt. ... Issues Involved:
1. Whether the assets of the land-holding subsidiaries can be treated as assets of the Corporate Debtor in its CIRP.
2. Whether the Resolution Plans could legally include the transfer of leasehold rights without prior permission from the Appellant.
3. Whether assets of subsidiary companies can be dealt with in the CIRP of the holding company.
4. Whether the Appellant was required to be made a party to the CIRP proceedings and heard before approval of the resolution plan.
5. Whether the Resolution Professional acted within the ambit of the IBC in certifying the Resolution Plans.
6. Whether the Appellant was aware of the development carried out by the Corporate Debtor before the CIRP.
7. What is the way out in the facts and circumstances of the present caseRs.

Issue-wise Detailed Analysis:

1. Whether the assets of the land-holding subsidiaries can be treated as assets of the Corporate Debtor in its CIRP:
The Tribunal noted that assets of the Corporate Debtor and its subsidiaries are distinct. Section 18(1) of the IBC and its explanation clarify that assets of subsidiaries are not included in the assets of the Corporate Debtor. The Tribunal relied on the Supreme Court's judgment in 'Embassy Property Developments Pvt. Ltd. vs. State of Karnataka' and other precedents to conclude that the assets of the land-holding subsidiaries cannot be treated as assets of the Corporate Debtor in its CIRP.

2. Whether the Resolution Plans could legally include the transfer of leasehold rights without prior permission from the Appellant:
The Tribunal found that the Resolution Plans included provisions for transferring leasehold rights without the Appellant's permission, which is impermissible. The lease deeds required prior approval for any transfer, and the Resolution Plans could not override these contractual obligations. The Tribunal emphasized that the Appellant's approval was necessary for any transfer of leasehold rights.

3. Whether assets of subsidiary companies can be dealt with in the CIRP of the holding company:
The Tribunal held that assets of subsidiary companies cannot be dealt with in the CIRP of the holding company without the permission of the lessor. The Tribunal reiterated that the IBC and relevant case law distinguish between the assets of a holding company and its subsidiaries, and the Resolution Plans could not include the assets of the subsidiaries without proper authorization.

4. Whether the Appellant was required to be made a party to the CIRP proceedings and heard before approval of the resolution plan:
The Tribunal concluded that the Appellant was a necessary party to the CIRP proceedings and should have been heard before the approval of the resolution plans. The Resolution Professional's failure to include the Appellant in the process was a significant oversight, and the Appellant's interests should have been considered.

5. Whether the Resolution Professional acted within the ambit of the IBC in certifying the Resolution Plans:
The Tribunal found that the Resolution Professional did not act within the ambit of the IBC. The Resolution Professional was aware that the project land belonged to the subsidiaries and not the Corporate Debtor, yet the plans included provisions for transferring the leasehold rights. The Tribunal directed the Insolvency and Bankruptcy Board of India (IBBI) to examine the conduct of the Resolution Professional.

6. Whether the Appellant was aware of the development carried out by the Corporate Debtor before the CIRP:
The Tribunal acknowledged that the Appellant was aware of the development activities carried out by the Corporate Debtor on the leased land. However, this awareness did not equate to consent for the transfer of leasehold rights as stipulated in the Resolution Plans.

7. What is the way out in the facts and circumstances of the present case:
The Tribunal emphasized the need to protect the interests of the homebuyers who had invested significant amounts in the projects. The Tribunal directed the Resolution Professional to publish a fresh Form-G inviting new Resolution Plans, ensuring that the Appellant's dues are addressed and permission is obtained for transferring the leasehold rights. The Tribunal extended the CIRP period and outlined steps for recalculating dues and involving the Appellant in the process.

Conclusion:
The Tribunal set aside the orders approving the Resolution Plans and directed a fresh process to ensure compliance with the IBC and protection of all stakeholders' interests. The Appellant was made a party to the CIRP, and the Resolution Professional was instructed to recalibrate the process with the Appellant's involvement.