Joint development co-promoter liability and unchallenged recovery certificates permit auction despite pending insolvency proceedings under real estate regulation.
Landowners entering a Joint Development Agreement are co-promoters under the Real Estate (Regulation and Development) Act, 2016 where the developer and seller are different persons, and share statutory functions and liabilities. A pending Corporate Insolvency Resolution Process does not automatically bar enforcement under another law; questions on the moratorium, insolvency estate, and protection of the resolution process fall within the National Company Law Tribunal's jurisdiction. A public auction issued to execute an unchallenged Recovery Certificate may proceed because the certificate remains valid and enforceable unless stayed, modified, or set aside by a competent forum.
Issues: (i) Whether landowners who entered a Joint Development Agreement with the developer are co-promoters responsible under the Real Estate (Regulation and Development) Act, 2016; (ii) Whether the pending Corporate Insolvency Resolution Process and Sections 14 and 238 of the Insolvency and Bankruptcy Code, 2016 bar enforcement of the Recovery Certificate and consequential auction; (iii) Whether the consequential public auction notice can be interdicted where the underlying order and Recovery Certificate remain unchallenged and operative.
Issue (i): Whether landowners who entered a Joint Development Agreement with the developer are co-promoters responsible under the Real Estate (Regulation and Development) Act, 2016.
Analysis: Section 2(zk) deems both the person developing property and the person selling apartments or plots to be promoters where they are different persons, and makes them jointly responsible for statutory functions and liabilities. A landowner enabling development under a Joint Development Agreement cannot disclaim the statutory consequences of that arrangement by treating the developer alone as concerned with the project.
Conclusion: The landowners are co-promoters subject to responsibilities under the Real Estate (Regulation and Development) Act, 2016. Against the petitioners.
Issue (ii): Whether the pending Corporate Insolvency Resolution Process and Sections 14 and 238 of the Insolvency and Bankruptcy Code, 2016 bar enforcement of the Recovery Certificate and consequential auction.
Analysis: The overriding effect of Section 238 operates where an inconsistency arises, but commencement of the Corporate Insolvency Resolution Process does not, by itself, invalidate every proceeding under another enactment. Questions concerning the applicability of the moratorium, whether property forms part of the insolvency estate, and the need for protection of the resolution process lie within the jurisdiction of the National Company Law Tribunal during the insolvency process.
Conclusion: The pending Corporate Insolvency Resolution Process did not furnish a basis to restrain enforcement in writ jurisdiction; any protection concerning the insolvency process must be sought before the National Company Law Tribunal. Against the petitioners.
Issue (iii): Whether the consequential public auction notice can be interdicted where the underlying order and Recovery Certificate remain unchallenged and operative.
Analysis: The auction notice was a consequential execution measure under Section 41 of the Real Estate (Regulation and Development) Act, 2016. As the underlying Recovery Certificate had neither been challenged nor stayed, modified, or set aside, the executing authority was required to proceed with its enforcement in accordance with law.
Conclusion: The public auction notice could not be quashed while the Recovery Certificate remained valid and enforceable. Against the petitioners.
Final Conclusion: Enforcement of the Recovery Certificate may continue unless modified or restrained by a competent forum, while any insolvency-related protective relief lies before the National Company Law Tribunal.
Ratio Decidendi: A writ court will not interdict execution of an unchallenged Recovery Certificate merely because a Corporate Insolvency Resolution Process is pending; questions regarding the insolvency estate and moratorium fall for determination by the National Company Law Tribunal.