Fresh insolvency application barred during ongoing CIRP, but project-wise resolution permitted for an unfinished real estate project.
A fresh Section 7 insolvency application was not maintainable where CIRP against the same corporate debtor was already underway, so the refusal to admit the second application was upheld. In a real estate insolvency, however, project-wise CIRP was permitted for an unfinished project that had not been included in the earlier limited process, and the resolution professional could proceed with a fresh Information Memorandum and Form G for that project in accordance with the insolvency framework and CIRP Regulations.
Issues: (i) Whether a fresh application under Section 7 of the Insolvency and Bankruptcy Code, 2016 was maintainable when CIRP against the corporate debtor was already in progress; (ii) Whether the resolution professional could be directed to proceed with project-wise CIRP for the unfinished project NCR Green and issue fresh Information Memorandum and Form G.
Issue (i): Whether a fresh application under Section 7 of the Insolvency and Bankruptcy Code, 2016 was maintainable when CIRP against the corporate debtor was already in progress.
Analysis: CIRP had already commenced against the corporate debtor and continued to remain in process. The impugned order refused admission of another Section 7 application filed by a financial creditor claiming in respect of one project of the same corporate debtor. The existing insolvency process was already seized of the corporate debtor, and the Tribunal found no error in the Adjudicating Authority declining a second CIRP application in those circumstances.
Conclusion: The refusal to admit the fresh Section 7 application was upheld, against the applicant.
Issue (ii): Whether the resolution professional could be directed to proceed with project-wise CIRP for the unfinished project NCR Green and issue fresh Information Memorandum and Form G.
Analysis: The dispute involved a real estate corporate debtor with distinct projects. The Tribunal reiterated that project-wise resolution was permissible in such a case and noted that the earlier proceedings had already confined CIRP to Project Estella. Since Project NCR Green remained unfinished, the resolution professional was held free to proceed with the CIRP of that project in accordance with the insolvency framework and the CIRP Regulations, including issuance of the Information Memorandum and Form G.
Conclusion: The applicant was entitled to the directions sought for Project NCR Green.
Final Conclusion: The appeal challenging non-admission of the fresh insolvency application failed, while limited directions were issued permitting project-wise continuation of insolvency steps for the unfinished project.
Ratio Decidendi: Where CIRP against a corporate debtor is already underway, a fresh Section 7 application by a creditor of one project need not be admitted, and in a real estate insolvency the resolution process may proceed project-wise for an unfinished project in accordance with the insolvency framework.
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