https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=769494 https://www.taxtmi.com/caselaws?id=769494 Validity of allotments of residential units made by the Corporate Debtor on the date of commencement of the Corporate Insolvency Resolution Process - authority of Interim Resolution Professional (IRP) to cancel such allotments made on the date of CIRP commencement without issuing any show-cause notice or adjudicatory proceedings - HELD THAT:- The present is a case where IRP who was running the CD as a going concern under orders of this Tribunal, while going through the records of the CD, came to know about the units allotted to the Appellant(s). The RP found that allotments were claimed on 19.09.2019, on which date CIRP had already commenced and there was no authority in the CD, to make any allotment on 19.09.2019. When the CIRP has commenced on 19.09.2019, the jurisdiction of the Suspended Director clearly came to an end and no allotment letter could have been issued on 19.09.2019. The allotment, which is claimed on 19.09.2019 appeared to be unusual, since it was made without receiving any payment in the account of the CD and the payments were received in the account of the CD on 07.12.2019 to 15.01.2020 with regard to the Appellant(s) herein. The IRP is duty bound to protect the assets of the CD and if it is found that allotment claimed by the Appellant(s) is void, the allotment was impermissible in view of the moratorium imposed on 19.09.2019 and it required no adjudication for treating the allotment as void and impermissible. The submission of the Appellant is that allotments and payments made by the Appellant are reflected in records of the CD, hence, the allotment was actually made and could not have been declared invalid by the IRP. The materials on the record, including the letter of allotment dated 19.09.2019 in favour of the Appellant without any payment to the designated account, which payment according to the materials on record is claimed to be made only in December 2019 and January 2020, clearly prove that allotment made in favour of the Appellant(s) is non-est and without any authority. Conclusion - i) The allotment letters dated 19.09.2019, the same day CIRP commenced, were issued by the Suspended Management without any approval or consent of the IRP. The Suspended Management had no authority to allot units on or after the date of CIRP commencement. ii) The IRP did not exercise adjudicatory powers but acted within his duty to protect the assets of the Corporate Debtor under the moratorium. The cancellation communicated to the Appellants was a protective administrative act and not an adjudicatory decision. iii) The Applications filed by the Appellants challenging the cancellation of allotments were rightly rejected by the Adjudicating Authority as the allotments were void ab initio and payments made were not in accordance with the terms and moratorium provisions. There are no error in the order of the Adjudicating Authority rejecting Applications filed by the Appellant(s). There is no merit in the Appeal. The Appeals are dismissed. Case-Laws IBC Wed, 23 Apr 2025 00:00:00 +0530