Project-completion driven real estate insolvency permits promoter funding as outsider lender under supervised reverse CIRP.

In a real estate insolvency, the resolution framework was moulded around completion of the project as a going concern through a reverse corporate insolvency process. The promoter was permitted to fund completion from outside the corporate debtor as an outsider lender, not as promoter, while the Tribunal supervised the process to balance allottee and creditor interests. Amounts generated during the process were directed to be used only for project completion, payment to allottees opting for possession or refund, and satisfaction of institutional and operational dues within the stated timeline.

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Issues: Whether, in a real estate insolvency proceeding, the project could be continued through a reverse corporate insolvency resolution process with the promoter funding completion as an outsider lender, and whether directions could be issued for completion of the project, refund to opting allottees, and payment of institutional dues.

Analysis: The order applied the earlier approach adopted for real estate projects and treated the completion of the concerned project as the central objective of the insolvency process. It recognised that the allottees had substantially supported the proposal and that the promoter had undertaken to infuse funds from outside the corporate debtor as a lender, not as promoter, so that the company could continue as a going concern. The order further directed that amounts generated during the process be used only for completing the project, satisfying the claims of allottees opting for possession or refund, and paying financial institutions and operational creditors within the stated time frame.

Conclusion: The appeal was disposed of with directions permitting continuation of the project through promoter funding and supervised completion, while preserving the claims of allottees and other creditors in the manner directed.

Final Conclusion: The insolvency process was moulded into a project-completion driven resolution, with the promoter required to cooperate and fund the project from outside the corporate debtor under the Tribunal's supervision.

Ratio Decidendi: In a real estate insolvency, the resolution process may be structured to preserve and complete the project as a going concern, with the promoter permitted to fund completion as an outsider lender and with the Tribunal issuing supervisory directions to balance the interests of allottees and other creditors.

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