Project-specific CIRP in real estate insolvency confined to one project, while debt, default and separate creditor proceedings were upheld.

A Section 7 petition based on allottee claims was supported by particulars of payment, default dates and acknowledgements, so debt and default were treated as established and CIRP was justified. The process was confined to the Raheja Shilas (Low Rise) project because project-specific real estate insolvency should not extend to distinct projects of the same developer, and other projects were excluded from the CIRP scope. CIRP was not closed merely because many units had been delivered, as disputes and liabilities remained; withdrawal would lie through the statutory procedure if the parties settled. Creditors of other projects could continue their independent proceedings unaffected by the modified order.

---

---

Issues: (i) Whether debt and default on part of the corporate debtor have been proved so as to initiate CIRP under Section 7 of the Insolvency and Bankruptcy Code, 2016; (ii) Whether the CIRP initiated against the corporate debtor ought to be confined to the project Raheja Shilas (Low Rise); (iii) Whether CIRP should be closed because allottees have received possession of their units; (iv) Whether intervention applications by financial creditors of other projects are entitled to prosecute their Section 7/9 applications independently.

Issue (i): Whether debt and default on part of the corporate debtor have been proved so as to initiate CIRP under Section 7 of the Insolvency and Bankruptcy Code, 2016.

Analysis: The Section 7 petition set out particulars in Part IV and supporting documents in Part V showing amounts paid, amounts claimed in default and dates of default for each allottee. The Adjudicating Authority found possession obligations were due in 2012-2014 with a six month grace, debt was acknowledged in communications, and default was continuing. Those findings were considered and not shown to be vitiated on appeal.

Conclusion: The Adjudicating Authority's finding that debt and default have been established is affirmed; initiation of CIRP under Section 7 is justified.

Issue (ii): Whether the CIRP initiated against the corporate debtor ought to be confined to the project Raheja Shilas (Low Rise).

Analysis: Precedents of this Tribunal and Supreme Court principles recognise that when allottees or financial creditors of a single real estate project initiate CIRP, the process should be project specific to protect stakeholder interests and avoid affecting distinct projects of the same developer. The facts show the Section 7 petition pertains to allotments in Raheja Shilas (Low Rise) only and other projects have separate stakeholders and approvals.

Conclusion: The impugned order admitting CIRP is modified to confine CIRP to the project Raheja Shilas (Low Rise) only; other projects are excluded from the scope of this CIRP.

Issue (iii): Whether CIRP should be closed because allottees have received possession of their units.

Analysis: Although occupancy certificates and possession of many units were obtained and handed over, certain disputes remain (including contested delay compensation calculations and outstanding project liabilities). Respondent financial creditors opposed closure. The Tribunal noted settlement and statutory withdrawal mechanisms exist for concluding CIRP.

Conclusion: No order for closure of the CIRP is made; if parties settle, respondents may apply for withdrawal under the statutory procedure (Section 12A of the Insolvency and Bankruptcy Code, 2016).

Issue (iv): Whether intervention applications by financial creditors of other projects are entitled to prosecute their Section 7/9 applications independently.

Analysis: The modification confining CIRP to the Raheja Shilas (Low Rise) project removes that CIRP as a bar to independent proceedings by creditors of other projects. Principle of project wise CIRP permits creditors of distinct projects to pursue separate remedies.

Conclusion: Financial creditors and institutions relating to other projects are free to prosecute their independent proceedings in accordance with law; the Adjudicating Authority may proceed to examine applications relating to other projects unimpaired by the modified order.

Final Conclusion: The appeal is disposed by modifying the Adjudicating Authority's order to confine the CIRP to the Raheja Shilas (Low Rise) project; the admission of CIRP on grounds of debt and default stands affirmed, CIRP is not closed, and creditors of other projects retain the right to pursue independent proceedings.

Ratio Decidendi: Where a Section 7 petition by allottees or financiers relates to a single real estate project, the corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016 is confined to that project and does not extend to other separate projects of the same corporate debtor.

---