TaxTMI 
TaxTMI 
2022 (3) TMI 283
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..... Dharmaprabhas Law Associates, AOR JUDGMENT M.R. SHAH, J. 1. Interlocutory Application No. 105732/2021(for impleadment) is allowed in terms of the prayer made and they are ordered to be impleaded as respondents in the instant appeal. 1A. Feeling aggrieved and dissatisfied with the impugned judgment and order dated 09.11.2020 passed by the National Company Law Appellate Tribunal, New Delhi (hereinafter referred to as the 'NCLAT/Appellate Authority') in Company Appeal (AT) (Insolvency) No. 1380 of 2019, by which the Appellate Authority has dismissed the said appeal preferred by the appellant herein - Promoter/Majority Shareholder of the Corporate Debtor - Jasmine Buildmart Pvt. Ltd. and has confirmed the order passed by the National Company Law Tribunal, New Delhi (hereinafter referred to as the 'NCLT/Adjudicating Authority') in admitting the petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 (for short, 'IBC'), the appellant - Promoter/Majority Shareholder of the Corporate Debtor has preferred the present appeal. 2. That respondent no. 4 herein - Corporate Debtor - Jasmine Buildmart Pvt. Ltd. had come out with a Gurgaon based housing project, namely....
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....er is passed in the present proceedings, it may affect them as home buyers. Three other home buyers, namely, Sanjiv Puri, Akshat Seth and Kaustav Mukherjee have preferred IA No. 105732 of 2021 for impleadment. 2.4 The present appeal was adjourned from time to time on the ground that the dispute between the appellant and respondent Nos. 1 to 3 herein (original applicants) is being settled and that the appellant/Corporate Debtor is prepared to complete the project within a period of nine months, if the home buyers make payments, as scheduled. 2.5 When the present appeal was taken up for further hearing on 04.02.2022, it was reported by the learned Senior Advocates / counsel for the respective parties including the impleaders and the Association that the original applicants/respondent Nos. 1 to 3 herein as well as 79 other home buyers have settled the dispute with the Corporate Debtor and a settlement has been entered into, under which, it is agreed that the Corporate Debtor shall complete the entire project and hand over the possession to the home buyers (who want the possession), within a period of one year. It was also submitted on behalf of the original applicants that they ....
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....2,000/- along with applicable interest, out of the amount deposited by the appellant in the Registry of this Court. It is also further prayed to dismiss all matters pending between the appellant and respondent Nos. 1 to 3 herein (original applicants) mentioned in paragraph 7 of IA No. 18679 of 2022 and close the CIRP proceedings of respondent No. 4 - Corporate Debtor initiated by respondent Nos. 1 to 3 herein (original applicants). 3. Shri Kapil Sibbal, learned Senior Advocate has appeared on behalf of the appellant, Shri Lokesh Bhola, learned Advocate has appeared on behalf of respondent Nos. 1 to 3 herein, Shri K.V. Vishwanathan, learned Senior Advocate has appeared on behalf of the three impleaders (IA No. 105732/2021), Shri Nakul Diwan, learned Senior Advocate has appeared on behalf of the Krrish Provence Flat Buyers Association, Mr. Yogesh Mittal, learned Advocate has appeared on behalf of the Resolution Professional and Ms. Radhika Gupta, learned Advocate has appeared on behalf of the intervenors. 3.1 Shri K.V. Vishwanathan and Shri Nakul Diwan, learned Senior Advocates appearing on behalf of the three impleaders - respective home buyers and the Association and Shri Kap....
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....constituted on 23.11.2020 by the IRP, no further steps are taken either by the IRP and/or even the COC and even the first meeting of the COC has also not been convened and before any further CIRP proceedings are proceeded, this Hon'ble Court has stayed the impugned order. It is submitted therefore that there shall not be any impediment in permitting the original applicants to withdraw the CIRP proceedings. 4.2 Learned counsel for the respective parties have heavily relied upon paras 82 to 87 of the decision of this Court in the case of Swiss Ribbons Private Limited and Another v. Union of India and others, reported in (2019) 4 SCC 17 and one another order passed by this Court in the case of Kamal K. Singh v. Dinesh Gupta & Another (Civil Appeal No. 4993 of 2021, decided on 25.08.2021), in which this Court has permitted the original applicants before the Adjudicating Authority to withdraw the CIRP proceedings in view of the settlement entered into between the parties. 5. We have heard learned counsel for the respective parties at length. 5.1 The original applicants (respondent Nos. 1 to 3 herein) now have moved before this Court by way of an interlocutory application No. 18....
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....for withdrawal of CIRP was granted. [....] Thus, it was agreed that once CIRP is initiated, it is no longer a proceeding only between the applicant creditor and the corporate debtor but is envisaged to be a proceeding involving all creditors of the debtor. The intent of the Code is to discourage individual actions for enforcement and settlement to the exclusion of the general benefit of all creditors." 7. It is true that the procedure for preferring an application under Section 12A of the IBC is contained in Regulation 30A of the CIRP Regulations, 2016. However, as per the decision of this Court in the case of Brilliant Alloys Pvt. Ltd. v. S. Rajagopal, 2018 SCC Online SC 3154, the said provision is held to be directory, depending on the facts of each case. 7.1 In the case of Swiss Ribbons Pvt. Ltd. (supra), it is held that at any stage before a COC is constituted, a party can approach NCLT/Adjudicating Authority directly and the Tribunal may in exercise of its powers under Rule 11 of the NCLT Rules, allow or disallow an application for withdrawal or settlement. Therefore, in an appropriate case and where the case is being made out and the NCLT is satisfied about the settleme....
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....pany has to go into liquidation as per Section 33 of the IBC. The homebuyers being unsecured creditors of the builder company stand to lose all their monies that are either hard earned and saved or borrowed at high rate of interest, for no fault of theirs. 11. Even the legislative intent behind the amendments to the IBC is to secure, protect and balance the interests of all home buyers. The interest of home buyers is protected by restricting their ability to initiate CIRP against the builder only if 100 or 10% of the total allottees choose to do so, all the same conferring upon them the status of a financial creditors to enable them to participate in the COC in a representative capacity. Being alive to the problem of a single home buyer derailing the entire project by filing an insolvency application under Section 7 of the IBC, the legislature has introduced the threshold of at least 100 home buyers or 10% of the total home buyers of the same project to jointly file an application under Section 7 of the IBC for commencement of CIRP against the builder company. The Insolvency Bankruptcy Code (Second Amendment) Bill, 2019 that proposed the amendment to Section 7 contained a statem....
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....the NCLT/Adjudicating Authority) is allowed. As agreed, respondent Nos. 1 to 3 shall be paid an amount of Rs. 3,36,02,000/- along with accrued interest, out of the amount deposited by the appellant, pursuant to the earlier order passed by this Court dated 3.12.2020. Respondent Nos. 1 to 3 herein (original applicants before the Adjudicating Authority) are permitted to withdraw the application filed by them under Section 7 of the IBC, 2016 bearing CP No. 1722/ND/2018 pending before the NCLT, New Delhi. Hence, CP No. 1722/ND/2018 pending before the NCLT, New Delhi stands dismissed as withdrawn. Consequently, all the orders passed by the NCLT, New Delhi, including appointment of IRP and constitution of COC are hereby quashed and set aside. Consequently, the impugned judgment and order passed by the NCLAT also stands quashed and set aside. As agreed between respondent Nos. 1 to 3 herein, the appellant and the corporate debtor, Consumer Case bearing CC No. 984 of 2019, filed by respondent Nos. 1 to 3 herein, which is pending before the National Consumer Disputes Redressal Commission, New Delhi and Criminal Complaint being Case No. 540/2021 filed by respondent Nos. 1 to 3 herein, pending ....