Promoter settlement proposals in CIRP may fail without binding funding, while substantially complete projects may proceed subject to creditor approval.

A promoter's revised settlement proposal for Project Estella was rejected because CIRP was ongoing, a resolution plan had already been approved by the CoC, and stakeholders opposed the proposal; the alleged support of an outside developer was found non-binding and financially uncertain. For Project NCR Greens, the promoter was permitted to complete the substantially finished project and hand over the balance units within six months, because prior undertakings, partial possession already given, and homebuyer interests supported that course, but only subject to approval by the majority of the financial creditors, including the concerned bank.

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Issues: (i) Whether the promoter's revised settlement proposal for Project Estella could be accepted in view of the ongoing CIRP, the approved resolution plan, and the objections of the stakeholders; (ii) Whether the promoter could be permitted to complete Project NCR Greens and hand over the balance units within the time proposed, subject to stakeholder approval.

Issue (i): Whether the promoter's revised settlement proposal for Project Estella could be accepted in view of the ongoing CIRP, the approved resolution plan, and the objections of the stakeholders.

Analysis: Project Estella was already proceeding in CIRP after revival, and a resolution plan had been approved by the Committee of Creditors with substantial majority and was pending consideration before the Adjudicating Authority. The promoter's repeated settlement proposals had been considered and rejected by the CoC on earlier occasions, and the homebuyers had also opposed the proposal in a fresh meeting. The alleged support from an outside developer was found insufficient because the arrangement was non-binding and conditional upon availability of funds and further approvals. In these circumstances, the revised settlement proposal did not inspire confidence and could not displace the ongoing resolution process.

Conclusion: The revised settlement proposal for Project Estella was rejected and not accepted.

Issue (ii): Whether the promoter could be permitted to complete Project NCR Greens and hand over the balance units within the time proposed, subject to stakeholder approval.

Analysis: Project NCR Greens had earlier been kept outside the CIRP on the basis of the promoter's undertaking that it was substantially complete and would be handed over. The record showed that most towers were complete, possession had already been delivered in many units, and the remaining work was limited. The promoter's revised proposal also contemplated completion within six months and included payment to the concerned bank and protection of homebuyers' interests. In that backdrop, the promoter was to be given an opportunity to complete the project, but only on approval by the majority of the financial creditors including the concerned bank.

Conclusion: The promoter was permitted to complete Project NCR Greens within six months, subject to approval by the majority of the financial creditors including the concerned bank.

Final Conclusion: The application succeeded only to a limited extent: the proposal was declined for Project Estella, while the promoter was allowed an opportunity to complete Project NCR Greens, with stakeholder approval and further directions left to the relevant forum if such approval was not secured.

Ratio Decidendi: A promoter's settlement proposal cannot be accepted for a project already under an approved CIRP resolution process when it lacks a binding and financially credible commitment and has been rejected by the relevant stakeholders, but a substantially complete project may be allowed to be finished by the promoter where prior undertakings and stakeholder interests justify such a course.

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