Group insolvency for an integrated township project may proceed with a common resolution plan to preserve completion and allottee interests.

In a jointly developed township project secured by corporate guarantees and co-borrower arrangements, group insolvency resolution may be pursued against land-owning corporate debtors where the project is operationally integrated with the principal borrower and cannot be effectively resolved in isolation. A common resolution professional and consolidated resolution plan were treated as necessary to preserve the project as a going concern and protect allottees. For remaining corporate debtors, the record was insufficient to conclusively establish the same common development structure, so those matters were remitted for fresh consideration with liberty to produce additional agreements and materials.

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Issues: (i) Whether, on the facts of a jointly developed township project secured by corporate guarantees and co-borrower arrangements, group corporate insolvency resolution process could be directed against the land-owning corporate debtors along with the principal borrower. (ii) Whether the applications against the remaining corporate debtors, for whom the record did not clearly establish a common development arrangement with the principal borrower, were liable to be remitted for further consideration.

Issue (i): Whether, on the facts of a jointly developed township project secured by corporate guarantees and co-borrower arrangements, group corporate insolvency resolution process could be directed against the land-owning corporate debtors along with the principal borrower.

Analysis: The record showed that the principal borrower and several corporate debtors had entered into collaboration and development arrangements for a unified township project, with their lands consolidated for development and with guarantees executed in support of the loan. The project could not be effectively resolved in isolation because completion of the township depended upon proceeding against the associated land-owning entities together with the already admitted insolvency of the principal borrower. In these circumstances, a common resolution professional and a consolidated resolution plan were necessary to preserve the project as a going concern and to protect the interests of allottees.

Conclusion: Yes. Group insolvency proceedings were required against the identified land-owning corporate debtors along with the principal borrower, and the dismissal of those applications was set aside.

Issue (ii): Whether the applications against the remaining corporate debtors, for whom the record did not clearly establish a common development arrangement with the principal borrower, were liable to be remitted for further consideration.

Analysis: As to the remaining corporate debtors, the available material did not conclusively establish that their lands formed part of the same development structure in the same manner as the other projects. The record was insufficient to finally determine their joinder for group insolvency on the basis of the documents then produced, so further examination by the adjudicating authority was required, with liberty to place additional agreements and materials on record.

Conclusion: The matters concerning the remaining corporate debtors were remitted for fresh consideration.

Final Conclusion: The judgment accepted a group-insolvency approach for the identified integrated project entities, while leaving the other connected matters open for reconsideration on additional evidence.

Ratio Decidendi: Where multiple corporate entities have jointly developed a project as an integrated consortium and the insolvency of the project depends on collective resolution, group insolvency with a common resolution professional and consolidated resolution plan may be directed to achieve effective resolution.

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