Supreme Court permits NCLAT's interim order, modifies for Eco Village-II. Appeals listed for final hearing July 2023.

The Supreme Court allowed the NCLAT's interim order to operate subject to final orders in the appeals, with a modification for the Eco Village-II project. The NCLAT may deal with received offers, but the entire process remains subject to the Supreme Court's orders. The appeals are to be listed for final hearing in the second week of July 2023. No interim relief was granted for Civil Appeal No. 1975 of 2023, and its maintainability will be examined later. Other pending interlocutory applications are left open for examination at an appropriate stage.

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Issues Involved:
1. Legality of project-wise insolvency resolution process.
2. Constitution of Committee of Creditors (CoC) for the entire corporate debtor versus a single project.
3. Involvement of ex-management in the Corporate Insolvency Resolution Process (CIRP).
4. Interim relief and interim arrangement during the pendency of appeals.

Summary:

1. Legality of Project-Wise Insolvency Resolution Process:
The appeals challenge the NCLAT's order converting the CIRP into a "project-wise insolvency resolution process," specifically for the "Eco Village-II" project of the corporate debtor, Supertech Ltd. The appellants argue that the IBC does not envisage project-wise resolution and that the NCLAT lacks the authority to adopt such a process.

2. Constitution of CoC for Entire Corporate Debtor vs. Single Project:
The NCLAT directed the constitution of a CoC only for the Eco Village-II project, while other projects were to continue as ongoing projects under the supervision of the IRP. The appellants contend that the CoC should be constituted for the entire corporate debtor, as the credit facilities were extended to the corporate entity as a whole.

3. Involvement of Ex-Management in CIRP:
The appellants argue against the involvement of the ex-management in the CIRP, citing violations of Section 29-A of the IBC and previous judgments. They assert that allowing the ex-management to participate would defeat the purpose of the Code. The NCLAT had directed that the ex-management assist in the completion of the Eco Village-II project.

4. Interim Relief and Interim Arrangement:
The Supreme Court considered various submissions regarding interim relief. The appellants sought to prevent the NCLAT's interim directions from being implemented, arguing that it would cause greater inconvenience and irreparable injury to home buyers if all projects were thrown into a state of uncertainty. The Court decided not to alter the NCLAT's directions for projects other than Eco Village-II, but restricted any process beyond voting on the resolution plan for Eco Village-II without its specific orders.

Conclusion:
The Supreme Court allowed the NCLAT's interim order to operate subject to final orders in the appeals, with a modification for the Eco Village-II project. The NCLAT may deal with received offers but the entire process remains subject to the Supreme Court's orders. The appeals are to be listed for final hearing in the second week of July 2023. No interim relief was granted for Civil Appeal No. 1975 of 2023, and its maintainability will be examined later. Other pending interlocutory applications are left open for examination at an appropriate stage.

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