TaxTMI 
TaxTMI 
2024 (9) TMI 1254
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....y) No. 1226 of 2023 & I.A. No. 4320, 4317 of 2023 Company Appeal (AT) (Insolvency) No. 1660 of 2023 & I.A. No.5986, 5987, 5988 of 2023 Company Appeal (AT) (Insolvency) No. 1050 of 2023 Company Appeal (AT) (Insolvency) No. 1051 of 2023 Company Appeal (AT) (Insolvency) No. 1361 of 2023 & I.A. No. 4843 of 2023 Company Appeal (AT) (Insolvency) No. 1385 of 2023 [ Justice Ashok Bhushan ] Chairperson And [ Barun Mitra ] Member ( Technical ) For the Appellants : Mr. Krishnendu Dutta, Sr. Advocate with Akshay Gosavi, Mr. Kumar Anurag Singh, Mr. Kartik Sandal, Ms. Raveena Devan, Mr. Avaneesh Jaiswal and Mr. Zain A. Khan, Mr. Anish Ahlawat, Advocates For the Respondents : Mr. Abhijeet Sinha, Sr. Advocate with Mr. Varun Kalra, Mr. Samir Malik, Mr. Akash Chatterjee and Mr. Pranav Khanna, Advocates for R-1. Mr. Neeraj Kishan Kaul, Mr. Arvind Nayar, Sr. Advocate with Mr. Puneet Singh Bindra, Mr. Akshay Doctor, Mr. Parag Sawant, Mr. Akshay Sharma, Mr. Akshay Joshi, Mr. Rishabh Gupta, Ms. Mehreen Garg , Advocates for SRA JUDGMENT ASHOK BHUSHAN, J. The Appeal(s) have been filed against the - (i) Order dated 23.06.2023 passed by National Company Law Tribunal, Mumbai Bench-I in IA No....
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....ved by the impugned order dated 23.06.2023. There has been several proceedings including the proceedings under Prevention of Money Laundering Act, 2002 (hereinafter referred to as the "PLMA Act") against the Corporate Debtor and its Promoters, Related Entities, which also need to be noticed. 4. The D.S. Kulkarni Developers Ltd. and Group Companies have been in the business of residential and commercial construction since last several decades. Deepak Sakharam Kulkarni, Appellant No.1 in one of the Appeals is founder of the Group. Appellant No.2 - Smt. Hemanti Deepak Kulkarni is wife of Deepak Sakharam Kulkarni. Shri Shirish Deepak Kulkarni, Appellant in Another Appeal is son of Deepak Sakharam Kulkarni and Smt. Hemanti Deepak Kulkarni. On 31.12.1984, Deepak Sakharam Kulkarni, Hemanti Deepak Kulkarni and Shirish Deepak Kulkarni, as Partners, constituted a Partnership Firm namely - D.S. Kulkarni & Company. On 18.05.1987 Deepak Sakharam Kulkarni with Hemanti Deepak Kulkarni and Shirish Deepak Kulkarni constituted another Partnership Firm namely - D.S. Kulkarni & Associates. On 20.09.1991,D.S. Kulkarni Developers Ltd. was incorporated as Public Limited Company with Deepak Sakharam Ku....
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....ate Debtor, purchased the land through their Partnership Firm and/or through their relatives. The Corporate Debtor started purchasing land through D.S. Kulkarni & Co. and its relatives. The fund for purchase of agricultural land to its relatives were given by Hemanti Deepak Kulkarni, the President of the Group. Relatives of the Deepak Sakharam Kulkarni purchased various land in their own names from the funds given by Hemanti Deepak Kulkarni. The foreign Company due to its financial constraints backed out from the Joint Venture, leading to cancellation of SEZ Project. On cancellation of SEZ Project, the Promoter decided to develop an Integrated Township Project spread over 236 acres of land at Fursungi. The Promoter informed the D.S. Kulkarni & Co. and all other Partnership Firms as well as relatives to refund the amount advanced to them for carrying out development in the land purchased by them. Consequently, the balance amount, which was advanced, was refunded. The Collector of Pune had sanctioned the proposed outlay of land of 181 acres for special township by way of order dated 21.01.2013. The land, which was referred to by the Collector, included land in the name of Corporate D....
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....nd by order dated 26.09.2019, CIRP against the Corporate Debtor commenced. It is to be noted that prior to initiation of CIRP against the Corporate Debtor, Deepak Sakharam Kulkarni and Hemanti Deepak Kulkarni were arrested in the PMLA case on 07.02.2018. Hemanti Deepak Kulkarni was released on 18.11.2022, whereas Deepak Sakharam Kulkarni was released on 09.03.2023. 8. After commencement of CIRP vide order dated 26.09.2019, Manoj Kumar Agarwal was appointed as IRP, who was subsequently confirmed as RP. RP issued publication in the newspaper as well as on the website, inviting claims from the homebuyers, some of the homebuyers, who are Appellants before us and have filed their claims in response to the publication issued by the IRP. In response to the notice issued, several homebuyers filed their claim as allotment letter issued by the Corporate Debtor in the year 2017 itself. The RP sent various communications to certain homebuyers including some of the Appellants herein, asking details of payments to the Corporate Debtor. Ultimately the RP issues list of creditors dated 09.08.2021. Claim of the homebuyers, who could not file any documents to support their payment to the Corporat....
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.... passed in I.A. No.1950/2021, approving the Resolution Plan submitted by Respondents No. 2 to 4. 14. Appellant's case in the appeal is that upon various complaints received from few depositors of the Corporate Debtor, various regulatory authorities investigating agencies took cognizance. Enforcement Directorate issued letter dated 14.02.2019 in terms of Section 5 of the Prevention of Money Laundering Act, 2002, (hereinafter referred to as `PMLA Act, 2005'). The Adjudicating Authority by subsequent order dated 05.08.2019, confirmed the provisional attachment order. The Appellants were arrested on 17.02.2018. Appellant No. 1 Deepak Skaharam Kulkarni was released from Jail on 09.03.2023 and Appellant No. 2 Hemanti Deepak Kulkarni was released from Jail on 18.11.2022. CIRP against the Corporate Debtor commenced on 26.09.2019. Appellant's case is that Appellant being lodged in Jail had no access to any of the documents prepared or drawn by the Resolution Professional (RP). After release the Appellants were in process of seeking further information from the stakeholders in respect of Corporate Debtor, when they learnt that orders on the application for approval of the Resolution Plan ....
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....ding and Resolution Plan was approved by the Adjudicating Authority on 23.06.2023. 20. In the appeal, Appellant has prayed for setting aside the order dated 23.06.2023, passed by the Adjudicating Authority in I.A. No.1950/2023. Comp. App. (AT) (Ins.) No. 1142/2023 21. This appeal has been filed by Shirish Deepak Kulkarni, one of the promoters of the Corporate Debtor and son of Deepak Sakharam Kulkarni and Hemanti Deepak Kulkarni. 22. Appellant's case in the appeal is that the Resolution Plan submitted by Respondents No. 2 to 4 takes away the assets of which the Appellant is owner. Appellant in the appeal in Paragraphs 7.1, 7.2 & 7.3 has pleaded as follows: "7.1. The Corporate Debtor i.e. D S Kulkarni Developers Limited was incorporated and it was engaged in the construction business. Print out of the Master Data of the Corporate Debtor as available on the official website of the Ministry of Corporate Affairs is annexed herewith and marked as ANNEXURE "A-5". 7.2. Property being land bearing numbers (i) Survey No. 46, Hissa No. 3 at Fursungi, (ii) Survey No. 53, Hissa No. 3B/2, (iii) Survey No. 36, Hissa No. I at Fursungi, (iv) Survey No. 47, Hi....
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....d properties are mortgaged in favour of Toyota Financial Services India Ltd. in respect of loan given to DSK Motors Private Limited. It is further submitted that proceeding under Section 95 has also been initiated against the Appellant as State Bank of India (SBI) being C.P. IB No. 199 (MB)/2021 which proceedings are still pending. The case of the Appellant is that Appellant was never given any opportunity in the CIRP of the Corporate Debtor. The Appellant who was owner of the above property cannot be compelled to transfer the same in favour of the Resolution Applicant. The owner that is the Appellant cannot be divested of the rights to enjoy the ownership rights. Appellant in the appeal has prayed for setting aside the order dated 23.06.2023. Comp. App. (AT) (Ins.) No. 1307/2023 24. The appeal has been filed by partnership firm consisting of Deepak Sakharam Kulkarni and Hemanti Deepak Kulkarni. 25. The Appellant's case is that in the Resolution Plan in Appendix IV bearing No. 10, Appellant's property being aggregate 89.35 acres survey No. 326/1 Village Bavdhan have been included in the Resolution Plan without acknowledging that the aforesaid assets are owned by the Ap....
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.... by the Appellant for commencement of school for professional courses for animation and industrial design. Lease of land for 19 acres for 99 years for the yearly rent of Rs. 1 Crore. Lessee was at liberty to mortgage the land in favour of Financial Institution Banks for obtaining of financial/loans for construction of building/structures. The Appellant has taken facility of Rs. 100 Crores and 20 Lakhs from Central Bank of India to construct and operate the institute on the said property, charge was taken in favour of Central Bank of India. The Appellant proceeded to build infrastructure on the said lease property by investing an amount more than Rs. 263 Crores. Government of Maharashtra, promulgated DSK World University Act, 2017, which came into effect on 05.05.2017, establishing the University which University is offering a variety of courses and the Resolution Plan submitted by Respondents No. 2 to 4, the rights of Appellant have sought to be extinguished. The Lease Deed executed by the Corporate Debtor for 99 years could not have been extinguished in the Resolution Plan. Corporate Debtor at no point of time, including the Resolution Professional, had ever issued a notice termin....
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....ppellant after the rejection of their claim filed an I.A. No. 1844/2021, which was filed on behalf of Association of Allotment Letter Holders titled as DSK Anandghan (Allotment Letter Holders through its Authorised Representative Bharat Jadhav) seeking a direction to admit their claim. In the application, details of the Flat No. total consideration of Flat, total amount paid and allotment date has been mentioned. The entity who had issued a letter was also mentioned which were mostly the Corporate Debtor, with regard to few Appellants allotment letter was issued by DSK Global. In I.A. No. 1844/2021 notices were issued by Adjudicating Authority on 25.08.2021 to which a Reply was also filed by the RP. Adjudicating Authority, however, without deciding the application I.A. 1844/2021 proceeded to approve the Resolution Plan on 23.06.2023. By a subsequent order dated 01.08.2023, I.A. No.1844/2021 was dismissed by following order: "IA 2157/2021 IA 1844/2021 IA 913/2023 Mr. Rohit Gupta, Ld. Counsel for the Applicant in IA 913 of 2023 and Mr. Shyam Kapadia, Ld. Counsel for the Resolution Professional of the Corporate Debtor are present. These Interlocutory Applications hav....
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....on. In the year 2017, Corporate Debtor decided to take over the liabilities of DS Kulkarni and Company accordingly adjusted the loan of Appellant No. 2 advanced to DS Kulkarni Company and executed a registered Agreement dated 30.06.2017 for a Flat bearing No. 201 in G Wing on 2nd Floor in the project DSK Vishwa Ph-VI, Anandghan. The Corporate Debtor in the capacity of developer and DSK Global Education & Research Limited as land owner, executed registered Tripartite Agreement dated 30.06.2017 in favour of the Appellant in purchase of Flat No 201. DS Kulkarni Developers Limited by the general entry bearing No. six dated 26.06.2017 for the period from 01.06.2017 to 30.06.2017 adjusted the loan advanced by Appellant No. 2 through DS Kulkarni Company against the consideration to be paid by the purchasers for the Appellant towards the said Flat No 201. 38. Appellant made further payments towards VAT and service tax and towards stamp duties and registration charges directly to the Corporate Debtor towards purchase of the Flat. A copy of the Ledger Account of the Appellant No. 1 maintained by the Corporate Debtor along with the copy of Bank Statement has also been filed in support of t....
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.... the Appellant came to know about the CIRP, they filed their claim on 31.03.2023, which was rejected by RP on the ground of delay. I.A. No. 2114/2023 was filed by the Appellant before the Adjudicating Authority which claimed to be dismissed on 22.11.2023 against which Comp. App. (AT) (Ins) No. 192/2024, was filed by the Appellant which was dismissed by this Tribunal on 21.02.2024. The present appeal has been filed by the Appellant challenging the order dated 23.06.2023, approving the Resolution Plan by which Resolution Plan, the Appellant have not been recognised as Homebuyers. Comp. App. (AT) (Ins.) No. 1361/2023 42. This appeal has been filed challenging the order dated 01.08.2023 passed by the Adjudicating Authority in I.A. No. 2157/2021 filed by the Appellant. 43. The Appellant's case is that Appellants are Homebuyers in Project of the Corporate Debtor, namely DSK Madhukosh, situated in Village Mohili, Taluka Kurla, sub-District Bandra, Mumbai. Appellants were issued allotment letter in April 2017. All allotment letters in favour of the Appellants were issued by the Corporate Debtor dated 20.04.2017 to 29.04.2017. In allotment letter issued in favour of Appellant No. 1....
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....fter hearing both side and considering all the facts and documents on records including orders of RERA;" Comp. App. (AT) (Ins.) No. 1385/2023 45. The facts and the pleadings in this appeal is same as by the Appellant in Comp. App. (AT) (Ins.) No.1361/2023. 46. The Appellant was also one of the applicants in I.A. No. 2157/2021 filed before the Adjudicating Authority questioning the action of the RP in not executing the sale deed and rejecting the claim of the Appellant. I.A. No. 2157/2021 was listed on various dates before the Adjudicating Authority on different dates in year 2021 and 2022. On 13.06.2022, Adjudicating Authority passed following orders: "I.A. No. 1950 of 2021 This application is filed for approval of Resolution Plan. It is made clear that the present Application will be heard after disposing of all other pending Applications. Accordingly, the same is adjourned on 20.07.2022." 47. Although on various subsequent dates, all the applications including the application of the Appellant was also listed, but I.A. No. 2157/2021 was kept pending and Adjudicating Authority approved the Resolution Plan on 23.06.2023 and subsequently by the order dat....
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....n Private Limited 7,43,11,257/- 7,43,11,257/- 2,73,831/- 0.368% 2. Aryan Images 60,94,930/- 60,94,930/- 22,429/- 0.368% 3. Cosmos Construction Machinery and Equipment Private Limited 54,46,997/- 54,46,997/- 20,781/- 0.368% 4. Nikhil Transport Company 55,48,330/- 55,48,330/- 20,418/- 0.368% 5. Atharva Events 37,23,992/- 37,23,992/- 13,704/- 0.368% 52. Appellants' grievance in the appeal is that impugned order has failed to correctly consider the market value of the assets of the Corporate Debtor, which has been severely undervalued to accommodate the Resolution Plan of the SRA and deprive the various Creditors including the Appellants of their admitted dues. The commercial wisdom of CoC cannot be used to defeat rights and claims of other creditors/stakeholders. The Operational Creditors are lifeline of the Corporate Debtor and treatment of such Creditors could adversely affect functioning of various industries. The market value of the assets of the Corporate Debtor is approximately six times to the amount proposed to be paid by the SRA under the Resolution Plan. Adjudicating Authority has failed t....
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....ior Counsel appearing for the Successful Resolution Applicant. 60. Shri Krishnendu Datta, learned Senior Counsel in support of the Appeal, submits that CIRP process conducted by the RP and the CoC is in violation of the provisions of the IBC and the CIRP Regulations, 2016. It is submitted that CIRP of the Corporate Debtor came to an end on 13.06.2021, after extension and exclusion by the Adjudicating Authority.The Resolution Plan, which was submitted by SRA on 02.07.2021, was after expiry of the CIRP period. The Resolution Plans were revised and final Resolution Plan was submitted on 29.07.2021, which was approved by the CoC on 13.08.2021, i.e., subsequent to the expiry of the CIRP period, which ended on 13.06.2021. The learned Counsel for the Appellant has referred to Form-H, which has been noticed by the Adjudicating Authority in the impugned order, which itself has suggested that 13.06.2021 was the date of expiry of extended period of CIRP. Application for exclusion of time as filed on 10.06.2021, no order was passed by the Adjudicating Authority, extending the period of CIRP. Thus, the entire process of approval of Resolution Plan, so held after expiry, is in clear violation....
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.... land, whereas Valuer one has measured the land parcel of 89.66 acres, whereas Valuer two has not even valued the said parcel of land stating that the said land has been sold to third party. No objection was raised by the RP to the above discrepancies in the Report of the Valuers, nor attention of CoC was invited. The Resolution Plan has included 89.66 acres of land at Bavdhan, which was not the property of the assets of the Corporate Debtor. Audited Financial Report mentions value of the assets of the Corporate Debtor as Rs.1906 crores. Several items of the property were not included by the Valuers and several assets, which does not pertain to the Corporate Debtor has been included, making both the Valuation Report faulty and unacceptable. The Plan suffers from material irregularity and does not comply with the law. 61. Shri Abhijeet Sinha, learned Senior Counsel for the PR submits that the RP has prepared the Information Memorandum on the basis of attachment orders available from the Directorate of Enforcement. The Suspended Directors being unavailable, could not provide any inputs or documents. It is submitted that the RP conducted the proceedings in accordance with the IBC a....
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....s abandoned the Projects as well as the land and it is the SRA, who has to deal and develop the Project. The development potential of the CD is for SRA to consider. 63. Shri Krishnendu Datta, learned Senior Counsel making submissions in his rejoinder submits that the Appellant has the locus to file the Appeal. The Appellant - Promoter has right to receive the Resolution Plan. It is submitted that there is no order of extension of CIRP and submission to the contrary advanced by the Counsel for the Respondent is incorrect. It is submitted that commercial wisdom of CoC, cannot be justified when process is arbitrary. The law gives right to question the Plan. The Appellant is not relying on 2023 Valuation Report. The submission of the Appellant was that RP ignored the assets, which were part of the CD's asset. The development potential is intangible assets of the Corporate Debtor. In the Application filed by the SRA before the Stock Exchange, the value of the CD was shown as Rs.3000 crores. 64. The learned Counsel for the parties have also placed reliance on various judgments of this Tribunal as well as Hon'ble Supreme Court. Company Appeal (AT) (Insolvency) No. 1142 of 2023 - ....
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.... the family, directly from farmers, for which the consideration was paid to family Members by Hemanti Deepak Kulkarani and out of the said consideration, the individual family Members have purchased the land from farmers directly. Purchase by family Members of the Deepak Sakharam Kulkarni were all on the basis of money received from the Corporate Debtor/ its sister companies. Hence, the land did not belong to the individual family Members in whose name Sale Deeds were purchased. When individual family Members were not the rightful owner of the assets, they have no right to gift the assets to the Appellant. Further, the entire land covered by the Gift Deed is part of the integrated township project and included in the order issued by the Collector, granting permission of township, hence, it is not open for the Appellant to now claim right in the assets, which do not really belong to the Appellant. 69. IA No.5185 of 2023 has been filed by the Toyota Financial Services India Ltd. ("TFSIL"), who claimed to have extended credit facility of Rs.103.60 crores to DSK Motors Pvt. Ltd. ("DSK Motors"), in which, the Appellant was the Director. It is a case of the Toyota Financial Services I....
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....rties not being taken over even the assets cannot be taken over. Shri Sandeep Bajaj, further submits that challenging the order passed by this Tribunal, affirming the rejection of the claim of the Appellant, Civil Appeal No.4354 of 2024 was filed by the Appellant, which Appeal was dismissed on 01.04.2024 clarifying that order dated 01.04.2024 in no way affect the rights of third party, if any, in proceedings before the NCLT and NCLAT or before Hon'ble Supreme Court. 72. Shri Abhijeet Sinha, learned Senior Counsel for the RP submits that property S. No.326/1 was considered as part of the assets of the Corporate Debtor as the same was specified in the schedule of the Provisional Attachment Order dated 14.02.2019 passed by Enforcement Directorate. It is submitted that the Appellant or its Promoters have never approached the RP to raise its grievance. The Appellant has never approached the NCLT also raising any grievance. All contentions are sought to be raised in this Appeal for the first time. Respondent No.1 was never shown the purported Sale Deed or any documents, hence, Respondent No.1 had justified reason to believe that property was owned by the Corporate Debtor, as the same ....
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....istrict Pune with granting lessee right to construct buildings and structures. The Appellant has constructed educational institution after taking facility from Central Bank of India of Rs.100 crores. The Resolution Plan contemplates extinguishment of rights of the Appellant in the building, which was constructed on the lease land. The lease provided that the for terminating the lease, the CD was required to assess the building and make payment spent towards construction. The ownership of building is of the Appellant. Under Section 18, the RP cannot take the assets of subsidiary company. The CD or RP never terminated the lease. The Appellant has paid rentals and even if any rental is due, it could have been adjusted. The Appellant has not filed its claim, since it had not arisen. The claim of the Appellant, would only arise when CD terminate the lease. The Central Bank has filed its claim during CIRP. The lease was never terminated, it is only in the Resolution Plan the building has now been transferred. The building cannot be owned by the lessor. 76. The learned Counsel for the RP replying to the submissions of the Appellant, submits that as per the Lease Deed dated 24.09.2008 e....
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....und that no proof of payments to the Corporate Debtor has been filed by the Appellants. It is submitted that the Corporate Debtor having acknowledged the payments by the Appellants, there was no occasion for the Resolution Professional not to accept the payments. The list of creditors published by the Resolution Professional on 25.05.2021 mentioned reason for rejection of the claim and the only reason was that Appellants had not submitted proof of payment to the Corporate Debtor. It is submitted that the Appellants have filed their IA No.1844 of 2021 before the Adjudicating Authority on 06.08.2021 questioning the decision of Resolution Professional which application remains pending before the Adjudicating Authority and was never decided before approval of the Resolution Plan. It was only on 01.08.2023 that application was rejected as infructuous. When application has questioned the Resolution Professional's decision rejecting their claims, it was incumbent on the Adjudicating Authority to decide the application prior to approval of the Resolution Plan. Appellants who had given their life savings for allotment of flat and having paid 90% consideration rejection of the claims by the ....
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....nt. 84. Submissions advanced by Counsel for the Appellants in both the above appeals being similar are noticed together. 85. Counsel for the Appellants submits that the Appellants have paid amount to sister concern which amount was acknowledged and adjusted towards consideration of flat at the time of adjustment. Corporate Debtor admittedly took money in its account towards Stamp Duty, Registration, Service Tax and VAT. Appellants in support of his submissions referred to ledger filed along with the appeals. In the RERA disclosures made by the Corporate Debtor the flat allotted to the Appellants were sold. It is submitted that a Tripartite Agreement was entered between the Appellants, Corporate Debtor and its sister concern dated 30.06.2017 allotting the flats to the Appellants in the Project- 'DSK Vishwa'. The Corporate Debtor who was a developer has acquired development rights in the land mentioned in Schedule II (a) of the Agreement dated 30.06.2017 by executing a Development Agreement dated 31.12.2013. 'DSK Global Education & Research Limited' being land owner also was a part of the Agreement. Allotment of flats to the Appellants cannot be denied by the Resolution Profess....
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.... the Successful Resolution Applicant submits that the appeal filed by the Appellants having been dismissed by order dated 21.02.2024 where the Appellants have challenged the order of the NCLT dated 22.11.2023 rejecting their applications, the Appellants have no locus to file these appeals. In the order dated 21.02.2024 passed by this Tribunal rejection of the claim of the Appellants has been upheld. It is submitted that the Appellants have not made any challenge to the Resolution Plan before the Adjudicating Authority now they cannot be allowed to challenge the Resolution Plan. Appellants cannot be held to be homebuyers. Appellants have filed their claims before the Resolution Professional with great delay. They having filed claims only in March 2023 i.e. after the order was reserved in the plan approval application, Adjudicating Authority has rightly rejected their claims. Company Appeal (AT) (Insolvency) No. 1361 of 2023 & Company Appeal (AT) (Insolvency) No. 1385 of 2023:- 88. We have heard Shri Gaurav S. Sethi, Shri Varun Garg and Shri Harsh Pandya, Learned Counsel for the Appellants in Company Appeal (AT) (Insolvency) No. 1361 of 2023 and Shri Kunal Cheema, Learned Couns....
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....pprove the Resolution Plan on 23.06.2023 and kept the application of the Appellants pending which action of the Adjudicating Authority is contrary to its own order and unsustainable. Appellants who have paid the total consideration and are in possession of their flats, they cannot be given a treatment as has been given by the Resolution Professional and the Adjudicating Authority. The action of the Resolution Professional in rejecting the claim is wholly uncalled for and unjustified. After receiving the claims by the Appellants, Resolution Professional has sent an e-mail to the Appellants where it was noticed that the Appellants are in possession of the flats. In IA No.2157 of 2021, reply was also filed in which Resolution Professional has reiterated its stand that amount having not been received in the account of the Corporate Debtor, the claim cannot be admitted. 91. Counsel for the Resolution Professional replying the submissions of the Appellants submits that the Appellants have failed to attach any proof of actual payments made to the Corporate Debtor. Payments made by the Appellants were not reflected in the books of accounts of the Corporate Debtor, therefore, the Resolut....
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....te Debtor and protection of the interest of all stakeholders of the Corporate Debtor. Respondents have failed to protect the interest of the Appellants Receivables due to the Corporate Debtor are more than Rs.200 Crores and the Successful Resolution Applicant's proposal to make payment of Rs.866 Crores within seven years defeats logic and commercial wisdom. The value of the Corporate Debtor is approximately six times the amount proposed to be paid by the Successful Resolution Applicant under the Resolution Plan. 96. Counsel for the Successful Resolution Applicant submits that the Appellants being Operational Creditors are not entitled to be paid any amount beyond their entitlement under Section 30(2)(b) of the IBC. Appellants did not take any measure to contest the Resolution Plan before the Adjudicating Authority. They failed to file any objection before the Adjudicating Authority. Appellants have no locus standi to challenge the approval of the Resolution Plan based on commercial wisdom of the CoC. Company Appeal (AT) (Insolvency) No. 1226 of 2023:- 97. We have heard Shri Krishnendu Dutta, Learned Senior Counsel for the Appellants, Shri Abhijeet Sinha, Learned Senior Cou....
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....mentioned as last date on which CIRP expired. It is submitted that although in the Form H it was noticed that an application for extension was pending but no orders were passed for extension of CIRP, CIRP period came to an end. 102. Learned Counsel for the Respondent refuting the above submissions has placed before the Court the copy of the order dated 11.01.2022 passed by the Adjudicating Authority in I.A. No. 2017/2021 and the order dated 20.06.2022 passed in I.A. No. 1563/2022. 103. We now proceed to consider the grounds as urged by the Counsel for the Appellant. The Resolution Plan was approved by the CoC on 13.08.2021 and thereafter RP filed the application before the Adjudicating Authority on 18.02.2022 along with Form H. Form H, which was filed by RP has been extracted by the Adjudicating Authority in Paragraph 14 of the impugned order. Column Nos. 13 to 17 of Form H which is relevant for the present purpose is as follows: "FORM H COMPLIANCE CERTIFICATE (Under Regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 I, Manoj Kumar Agarwal, an Insolvency P....
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.... 24.03.2021 had allowed the exclusion for period of 24.03.2020 to 23.03.2021 for one year. The present Application now seeks exclusion from 24.03.2021 to 22.05.2021. This Bench allows the exclusion of 60 days from the CIRP period. Accordingly, IA 2017/2021 is allowed and disposed of." 106. Subsequently, an application was filed by the RP being I.A. No. 1563/2022 for rectification of the order dated 11.01.2022, where it was prayed that another 2 days time be allowed to complete the Resolution Process. The Adjudicating Authority while noticing the order dated 11.01.2022 has noticed that exclusion of time was granted extending the CIRP period till 24.08.2021. Adjudicating Authority vide order dated 20.06.2022 granted exclusion of two more days time i.e., from 22.05.2021 till 24.05.2021. The order dated 20.06.2022 is as follows: "IA 1563/2022 This is an Application filed by the Applicant, Mr. Manoj Kumar Agrawal, RP of the Corporate Debtor, seeking rectification of order dt. 11.01.2022, whereby exclusion of time was granted w.e.f. 24.05.2021, extending the CIRP period till 24.08.2021. Counsel appearing for the Applicant submits that time granted by this Bench to co....
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....utta, learned Sr. Counsel for the Appellant questioning the valuation of the Corporate Debtor as obtained by the RP. Appellant submits that RP did not have relevant records of the Corporate Debtor and the Appellant being behind the prison could not give any documents or assistance to the RP leading the RP to obtain valuation of the assets on incomplete information which lead valuation of the assets which is not the correct valuation and is much lower than the correct valuation of the assets of the Corporate Debtor. It is further submitted that in the financial statements prepared by the RP assets of the Corporate Debtor were valued as Rs. 1,906 crores, whereas two valuers pointed out by RP gave much lower valuation. 111. It is on the record that in the Meeting of the CoC held on 08.11.2019 two registered valuers were appointed. The RP issued letter to the two valuers, namely Puneet Tyagi and Deepak Bansal to value the land and building of the Corporate Debtor. Appellant by Additional Affidavit dated 29.02.2024 has brought on the record Valuation Reports Submitted by both the valuers. Valuation Report was submitted by Puneet Tyagi dated 22.10.2020 and the Addendum Report was also....
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....4 18,29,000 13,72,000 2 Ground Floor 192.94 14 24,39,000 18,29,000 3 First Floor 192.94 14 24,39,000 18,29,000 4 Second Floor 192.94 14 24,39,000 18,29,000 772 91,46,000 68,59,000 I have incorporated the valuation of land and building development and the updated final summary can be read as follows : S No. Properties Fair Value (INR) Liquidation Value (INR) 1 Property 01: Dream City 5,40,04,59,456 3,74,30,55,674 2 Property 02: DSK Nandanvan 13,04,42,627 9,13,09,839 3 Property 03: DSK Mayurban 19,42,26,699 13,59,58,689 4 Property 04: DSK Goldleaf 7,51,85,214 5,26,29,650 5 Property 05: Land at Balewadi 75,24,02,039 52,66,81,427 6 Property 06: DSK Anandghan 67,18,51,245 47,02,95,872 7 Property 07: DSK Meghmalhar Flats 9,99,46,000 7,88,83,200 8 Property 08: DSK Madhukosh 48,04,91,434 33,63,44,004 9 Property 09: Land at Bavdhan 5,82,79,000 7,07,95,300 10 Property 11: DSK Chandrdeep Flat 2 11,90,000 1,69,52,000 11 Property 12: Land & Building in ....
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.... subject to the basis of valuation mentioned in main report and respective annexures. Transactions Costs pertaining to the sale /purchase of the assets has not been considered while estimating the fair & liquidation value. The valuation is not intended for general circulation or publication and is not be reproduced without our prior written consent, or used for any purpose other than for the purposes stated above and cannot be relied upon the third parties. We will not accept any responsibilities to any other party to whom the report may be shown or who may acquire a copy of this report." 113. Learned Counsel for the Appellant submitted that there are lot of discrepancies in the Valuation Report submitted by above two valuers, several properties which does not belong to the Corporate Debtor has been valued whereas some properties which ought to have been valued has been left out for the valuation. Learned Counsel has further submitted that there is variance in the area of the assets taken by both the valuers. 114. Learned Counsel for the Appellant has referred to Notification dated 11.09.2014 issued by Urban Development Department Mantralaya, Mumbai, under w....
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....he second valuer has not valued the said parcel of land stating that sale has been sold to the third-party. The Appellant further stated that in the Bavdhan land, Corporate Debtor is having only 6.27 acres of land. 119. It is relevant to notice that the Valuation Report were shared by the RP with the CoC and no Member of the CoC raised any question with regard to Valuation Report and the CoC proceeded to examine the Resolution Plan accordingly. Valuation Reports obtained by RP is for the benefit of the CoC to examine the offers made in the Resolution Plan. It is also relevant to notice that before the Adjudicating Authority at no point of time, any objection was raised with regard to valuation conducted by two registered valuers. The CIRP regulation provides for a mechanism for value of the assets of the Corporate Debtor, which mechanism was followed by the RP. The Valuation Report having not been objected by any Member of the CoC and all proceeded to evaluate the Resolution Plan as per valuation, we at the instance of the promoters of the Corporate Debtor are not inclined to entertain objections raised regarding the Valuation Reports submitted by the expert valuers. 120. Lea....
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....by which the application seeking approval of a resolution plan for ACIL Ltd. (hereinafter referred to as either "ACIL" or "the corporate debtor") being IA No. 1636 of 2019 in CP (IB) No. 170(PB)/2018 (hereinafter referred to as "the approval application") was kept in abeyance while directing the Official Liquidator (hereinafter referred to as "the OL") to carry out a revaluation of the assets of the corporate debtor and to provide exact figures/value of the assets and exact valuation details." 122. The order of this Tribunal affirming the order of Adjudicating Authority was challenged before the Hon'ble Supreme Court, where Hon'ble Supreme Court after noticing the contention of the parties noticed the provision of Regulations 27 and 35 of the CIRP Regulations, 2016. The Hon'ble Supreme Court laid down following in Paragraph 30 : "Analysis, reasoning and conclusion 30. Having considered the matter in depth, the Court is unable to uphold the decisions rendered by the adjudicating authority - NCLT as also Nclat. The moot question involved is the extent of the jurisdiction and powers of the adjudicating authority to go on the issue of revaluation in the background ....
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....n as IRIDIA in the matter of M/s Horizon Buildcon Pvt. Ltd.; c) Pass any other or further orders/directions as this Hon'ble Tribunal may deem fit and appropriate in the present circumstances of the matter and in the interest of justice." 125. This Tribunal, following Judgment of the Hon'ble Supreme Court in `Ramkrishna Forgings Ltd.' (Supra), upheld the order of the Adjudicating Authority in Paragraphs 8 and 9, are as follow: "8. The learned Senior Counsel in this connection submitted that there was no occasion for NCLT to embark upon a totally alien procedure of getting the OL involved in such valuation, for which a mechanism is already provided under the Code and which, as per him, was strictly adhered to in the present case. It was contended that NCLT had limited power of judicial review given the supremacy of the CoC under the Code. At best, the learned Senior Counsel contended, that it could have disapproved the resolution plan on cogent ground(s) relevant for doing so after testing whether it complies with the requirements of Section 30(2) of the Code, but it could not have acquired jurisdiction, where no such residuary or equity based jurisdiction is ava....
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....he Directorate of Enforcement, which, in all documents pertaining to title obtained from the agencies were given to the valuers, which was basis of the valuers to proceed to value the land and building of the Corporate Debtor. In the facts of present case, we are not inclined to interfere with the Resolution Plan approved by the Adjudicating Authority on the ground of valuation as contended by the Appellant. 127. Learned Counsel for the Appellant has contended that certain assets which belong to the promoters of the Corporate Debtor has been included in the Resolution Plan, which is a ground to set aside the Resolution Plan because in the Resolution Plan properties of promoters cannot be included. Learned Counsel for the Appellant has referred to Section 18(1)(f) of the Code and submit that in the Resolution Plan, third-party assets cannot be included. The assets which have been referred to in appeal are according to the Appellant has been wrongly included are assets which have been dealt in Paragraph 13.8 in the Resolution Plan as well as assets admeasuring 89.35 acres situated at Village Bavdhan. In the brief synopsis, in Paragraph XIII under the heading C, following has been ....
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....ith regard to land at Bavdhan, the Comp. App. (AT) (Ins.) No. 1307/2023 by DS Kulkarni & Company, where the DS Kulkarni & Company is claiming title to the land by virtue of two Sale Deeds executed in the year 2002. The above ground thus also, need to be considered in the appeal while considering the appeal filed by DS Kulkarni & Company, hence, in the present appeal, the above grounds need no consideration. 129. The submission of learned Counsel for the Appellant is that Book value of the assets of the Corporate Debtor was Rs. 1,906 crores, whereas the fair value and liquidation value has been pegged at much lower value by two valuers. We have noticed above that Book Value of the Corporate Debtor was also noticed by the second valuer. Learned Counsel for the SRA is right in his submission that the Book value has been looked into in conjunction with the liabilities of the Corporate Debtor and mere Book Value do not reflect the value of the Corporate Debtor. 130. Learned Counsel for the Appellant has also advanced submission that RP had no access to the Corporate Office or the records of the Corporate Debtor which are still under attachment, it has proceeded to prepare Informat....
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.... Property Description a . 29.09.2009 Gift Deed as executed by Ms. Shilpa Makrand Kulkarni in favour of Mr. Shirish Deepak Kulkarni for land bearing Survey No. 46, Hissa No. 3 at Fursungi. b 29.09.2009 Gift Deed as executed by Ms. Swarupa Makarand Kulkarni in favour of Mr. Shirish Deepak Kulkarni for land bearing Survey No. 53, Hissa No. 3B/2 and Land Bearing Survey No. 36, Hissa No. 1 at Fursungi. c 29.09.2009 Gift Deed as executed by Ms. Sai Prakash Kulkarni (Sai Kedar Vanjape) in favour of Mr. Shirish Deepak Kulkarni for land bearing Survey No. 47, Land Bearing Survey No. 48, Hissa No. IA and Land Bearing Survey No. 44, Hissa No. 7/1 at Fursungi Copy of the Gift Deed dated 29.09.2009 executed by Ms. Shilpa Makrand Kulkarni in favour of Mr. Shirish Deepak Kulkarni for land bearing Survey No. 46, Hissa No. 3 at Fursungi is annexed herewith and marked as ANNEXURE "A-6". Copy of Gift Deed dated 29.09.2009 as executed by Ms. Swarupa Makarand Kulkarni in favour of Mr. Shirish Deepak Kulkarni for land bearing Survey No. 53, Hissa No. 3B/2 and Land Bearing Survey No. 36, Hissa No. l at Fursungi is annexed herewith and marked as ANNE....
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....rand Kulkarni has been given, which is as follows : Purchase of Land by Swarupa Makarand Kulkarni (niece of Deepak S. Kulkarni) from Agriculturist Sale of the same Land By Swarupa Makarand Kulkarni to DSKDL Sr. No. Sale Deed No. Date Total Amount - Sr. No. Sale Deed No. Date Total Amount - 1 6700 29-08-2007 6737500 - 1 1529 16/02/2008 94250000 - 2 6834 30-08-2007 7081250 - 2 3820 05-02-2008 38268750 - 3 6838 30-08-2007 9040625 - 3 3963 05-07-2008 5200000 - 4 9027 14-11-2007 5775000 - 4 7874 10-04-2007 26325000 - 5 9694 11-12-2007 7287500 - 5 8504 13/10/2008 15925000 - 6 9852 15-12-2007 5637500 - 6 5890 07-08-2008 43550000 - 7 6797 29-08-2007 11825000 - 7 6477 28/07/2008 26325000 - 8 6024 01-08-2007 3231250 - 9 6022 01-08-2007 8387500 10 6293 10-08-2007 11137500 ....
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.... by SaekedarVanjape (niece of Deepak S. Kulkarni) from Agriculturist Sale of the same Land By SaekedarVanjape to DSKDL Sr. No. Sale Deed No. Date Total Amount - Sr. No. Sale Deed No. Date Total Amount - 1 5728 21-07-2007 8250000 - 1 2235 13-10-2008 28275000 - 2 6682 24-08-2007 2337500 - 2 3737 29/04/2008 19880000 - 3 6684 24-08-2007 2337500 - 3 3818 05-02-2008 20800000 - 4 7143 10-09-2007 8800000 - 4 4576 28/05/2008 96850000 - 5 7359 17-09-2007 3712500 - 5 5766 07-04-2008 15000000 - 6 8289 19-10-2007 17393750 - 6 7418 18/09/2007 70037500 - 7 8046 11-10-2007 38981250 - 7 8344 22/10/2008 47450000 - 8 5967 31-07-2007 17531250 - 8 - 9 5965 31-07-2007 3300000 - 9 - 10 5372 10-07-2007 4400000 - - 11 5370 10-07-2007 4400000 - - 12 ....
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....rni & Company 52,73,250 Total 4,46,87,000 5 Hemanti D Kulkarni Wife 47,43,750 DSKDL 10,93,750 Saptashrungi Oil Mills Pvt Ltd 12,25,000 D S Kulkarni and Company 24,25,000 Total 47,43,750 6 Makarand Kulkarni Brother 4,87,25,000 DSKDL 3,88,54,000 D S Kulkarni & Associates 29,07,000 D S Kulkarni & Company 69,64,000 Total 4,87,25000 7 Shirish Deepak Kulkarni Son 9,11,63,375 DSKDL 5,93,39,777 DSK Motors Pvt Ltd 18,12,500 Ambiance Venture Estates & Dev Pvt Ltd. 1,17,66,124 Saptashrungi Oil Mills Pvt Ltd 1,17,66,124 D S Kulkarni & Company 64,78,850 Total 9,11,63,375 8 SAI Vanjape Niece 12,50,43,750 DSKDL 6,91,34,063 DSK Motors Pvt Ltd 48,86,500 Saptashrungi Oil Mills Pvt Ltd 23,80,000 D S Kulkarni & Company 4,21,43,187 D S Kulkarni Const. Pvt Ltd 65,00,000 Total 12,50,43,750 142. The plot of land which was purchased by Agriculturists, utilising the funds of sister companies of the Corporate Debtor, as noted above clearly indicate that land purchased by family members of the Deepak Kulkarni were not out of their o....
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....nd 7.33 acres of land situated at Fursungi, Pune be deleted from the Resolution Plan. We thus are satisfied that no error has been committed in dealing the aforesaid land 7.33 acres in the Resolution Plan and no exception can be taken by the Appellant to the Clause 13.8 in the facts of the present case as noted above. 146. We thus do not find any ground as urged by the Appellant to interfere with the order of the Adjudicating Authority approving the Resolution Plan. The appeal filed by Shirish Kulkarni deserves to be dismissed. Company Appeal (AT) (Insolvency) No. 1308 of 2023 - DSK Global Education and Research Private Limited 147. The Appellant challenges Clauses of the Resolution Plan under which the rights of the Appellant has been extinguished with respect to the buildings erected on the lease land by the Lessee. 148. For appreciating the submission, we need to notice certain terms and conditions of the Lease Deed as well as the pleadings of the parties. 149. The Lease Deed was executed by the Corporate Debtor on 24.09.2008 in favour of the Appellant for Survey No.53, 54, 55 and 56 with respective Hissa numbers totalling to 19 acres. The Lease Deed was registere....
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....land/s") hereunder written together with the right to construct structure/s and building/s thereon and shown in blue wash delineated by red coloured boundary line on the plan thereof hereto annexed TO HOLD the demised land unto Lessee and it's administrators and assigns for the term of 99 years commencing from the 1st day of July, 2008 for the term of 99 years ( Ninety-Nine years) yielding and paying the yearly rent of Rs. 1, 0 ,00,000/- (Rupees One Crore only), and which rent shall be payable by the Lessee to the Lessor on or before 10th day of every quarter in advance. First quarter will commence from 1st July, 2008 to 30th September 2008. In addition to above rent the Lessee agree to deposit with Lessor Rs.25,00,000/- (Rs. Twenty Five Lacs Only) as a deposit." 151. The lease further granted right to the Lessee to construct building upon demised land, a new building for its requirements of School, Hostels, other buildings etc. Clause 2, sub-clause (c) of the Lease Deed is as follows: "(c) That, the Lessee shall at it's own efforts, expense and cost be entitled to construct and complete upon the demised land, a new building or buildings for its requirements of Scho....
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....ayable on each quarter till 2013. 154. The lease specifically empowered the Lessor to re-enter on the breach of Covenants, after giving notice in writing, under which Lessee is to make good such breach, failing which Lessor shall be entitled to re-enter. 155. The pleadings on record indicate that lease was never terminated by the Corporate Debtor, either before commencement of the CIRP on 26.09.2019 or subsequent to commencement of the CIRP. The Lessee has constructed the building on the said premises. For construction of building on the premises, the Appellant has obtained financial assistance from Central Bank of India of Rs.100 crores and Rs.20 lacs in the year 2008. The Appellant's case is that it made construction of several buildings and apart from running various educational facilities, it established a University under DSK World University Act, 2017 and the Appellant claims to have running a University with effect from 05.05.2017 of an international repute. 156. It is also on the record that for the Central Bank of India, charge was created separately for the land as well as the building. 157. The case of the RP as appears from the records, indicate that the App....
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.... a yearly rent of 1,00,00,000/-. b. DSK Global constructed a college building on the said leased parcels of land. The said college was functional till around the year 2017 and has been vacant and non-operational thereafter. The building however continues to stand on the said Land. c. Clause 3 of the Lease Deed, which has also been quoted by the Applicant in their present application on pages 5 and 6 of the Application under reply, makes the following provision in the event of termination of the Lease Deed for breach thereof by the Lessee: "....If the Lessee fails to make good such breach within Three months of the date of service of such notice, the Lessor shall be entitled to re-enter upon the demised premises... And in this event Lessor shall be liable to pay to the Lessee cost of construction incurred by the Lessee for constructing buildings/structure, etc. on the said premises..." (...Emphasis supplied) d. Thus, if the Corporate Debtor wishes to terminate the Lease Deed with DSK Global, the Corporate Debtor would be required to pay DSK Global the cost of construction of the building standing thereon. 4. I say that from the above arra....
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....he Lease Deed the Corporate Debtor cannot re-possess the said Land without paying for the cost of construction of the building thereon. A copy of this letter dated April 22, 2021 is annexed hereto and marked as Exhibit C." 159. The above affidavit of RP clearly states that in event Corporate Debtor wishes to terminate the Lease Deed, the Corporate Debtor would be required to pay the Appellant, cost of construction of the building standing thereon, which have been an additional expense during the ongoing CIRP. Hence, the RP has not terminated the Lease Deed. The RP in paragraph 3 has also extracted Clause 3 of the Lease Deed, which contemplates payment to Lessee the cost of construction incurred by the Lessee in event the Lessor decides to re-enter upon the demised premises, after giving three months' notice to the Lessee. The RP has also stated that land, which is the subject matter of the lease is the assets of the Corporate Debtor, whereas the building constructed by the DSK Global is the property of the Appellant. 160. Now, we come to the relevant Clauses of the Resolution Plan, which are questioned by the Appellant. In the Resolution Plan in Schedule-3, 'Extinguishment of....
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....truction, which would have burdened additional cost in the CIRP. When the Lease Deed has not been terminated by the RP, whether the SRA by the Clauses as indicated above could have terminated the Lease Deed, denying the consequence of Clauses of the Lease Deed as contemplated therein. The Appellant's case is that the Appellant has spent more than Rs.262 crores for construction of the building and in paragraph 2.6, it has stated the amount, which also include the loan amount of Rs.100 crores from Central Bank of India. It is useful to extract paragraph 2.6 of the synopsis given in the Appeal, which is to the following effect : "2.6. The Appellant had thus relying on the said rights created in favour of the Appellant especially the long tenure of the lease terms, proceeded to build infrastructure at the Said Property by investing an amount of around INR 263,38,46,334/-(including the loan amount). 2.6.1. DSK International Campus, Pune was set up in 2008 through a partnership agreement with Chamber of Commerce & Industry Grand Hainaut and the Appellant comprising of an Animation, Video Game & Industrial Design Institute with state of the art facilities. DSK Internatio....
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.... which the corporate debtor has ownership rights which may be located in a foreign country; (ii) assets that may or may not be in possession of the corporate debtor; (iii) tangible assets, whether movable or immovable; (iv) intangible assets including intellectual property; (v) securities including shares held in any subsidiary of the corporate debtor, financial instruments, insurance policies; (vi) assets subject to the determination of ownership by a court or authority; (g) to perform such other duties as may be specified by the Board. Explanation. - For the purposes of this [section, the term "assets" shall not include the following, namely: - (a) assets owned by a third party in possession of the corporate debtor held under trust or under contractual arrangements including bailment; (b) assets of any Indian or foreign subsidiary of the corporate debtor; and (c) such other assets as may be notified by the Central Government in consultation with any financial sector regulator." 164. The learned Counsel for the Appellant, in support of his submission has relied on various judgments of this....
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....of law that whatever is affixed or built on the soil becomes a part of it, and is subjected to the same rights of property as the soil itself." In the case of Vallabhdas Naranji v. Development Office,),, Bandra (3) the Privy Council once again referred to Sir Barnes Peacock's observation as stated above. The Privy Council also quoted the following observation of Couch, C. J., in the case of Narayan v. Bholagir (4):........... We cannot, however, apply to cases arising in India the doctrine of the English law as to buildings, viz., that they should belong to the owner of the land. The only doctrine which we can apply is the doctrine established in India that the party so building on another's land should be allowed to remove the materials." 7. Normally, under Section 108 of the Transfer of Property Act, before the expiry of the lease, a lessee can remove all structures and buildings erected by him on the demised land. All that was necessary for him to do was to give back the land to the lessor, on the termination of the lease, in the same condition as he found it. The ownership, therefore, of the building in this case was not with the lessors but was with the lessee....
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....es in the cited decisions including those in Embassy Property [Embassy Property Developments (P) Ltd. v. State of Karnataka, (2020) 13 SCC 308] that the assets belonging to a third party cannot be utilised towards resolution of a corporate debtor remain fundamental and beyond cavil. Equally, the reference to the maxim actus curiae neminem gravabit, and to the decision in ONGC [ONGC v. Assn. of Natural Gas Consuming Industries, (2001) 6 SCC 627] has been rather unnecessary because the said principle is essentially employed for the purpose of restitution and putting a party in the position where he would have been but for intervention or lapse of the Court. [ This principle has been succinctly explained by this Court in South Eastern Coalfields Ltd. v. State of M.P., (2003) 8 SCC 648 in the following words : (SCC p. 664, para 28)"28. That no one shall suffer by an act of the court is not a rule confined to an erroneous act of the court; the "act of the court" embraces within its sweep all such acts as to which the court may form an opinion in any legal proceedings that the court would not have so acted had it been correctly apprised of the facts and the law. The factor attracting app....
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....ial Development Authority vs. Roma Unicon Designex Consortium - (2023) SCC OnLine NCLAT 1612, wherein in paragraphs 44, following was held: "44. ....Thus, assets of the Corporate Debtor and assets of subsidiary of the Corporate Debtor have been separately recognised and dealt with. Section 18, sub- section (1), Explanation further clarifies the law when it says that assets shall include the assets, meaning thereby assets of the Corporate Debtor, shall not include assets of any Indian subsidiary. In the CIRP of Corporate Debtor, thus, assets of subsidiary Company, i.e., Earth Towne were not to be taken into consideration or treated as the assets of the Corporate Debtor. As regards, the law relating to resolution process of a corporate person is concerned, the law is concerned with assets of the Corporate Debtor and its liabilities, so as to focus the resolution on the assets of the Corporate Debtor. The natural corollary to the above provision is that the assets of the subsidiary Company cannot be dealt with, in CIRP of a holding Company. Holding Company and subsidiary Company have separate legal status and the assets of subsidiary Company cannot be taken into consideration....
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....sel for the Appellant has also relied on the judgment of this Tribunal in UCO Bank vs. Sudip Bhattacharya Resolution Professional of Reliance Naval & Engineering Ltd. - (2021) SCC OnLine NCLAT 3047, where in paragraph 11 of the judgment, following was laid down : "11. The intent of the Code was not to terminate Agreements that have created legal rights in favor of third parties without adhering to due process of Law. Such a termination of legally binding Agreements would be in violation of the provisions of Section 30(2)(e). The Hon'ble Supreme Court in a Catena of Judgements has laid down that margin money acquires the character of 'Trust' when it is given against the Bank Guarantee issued to the beneficiary and asset held under 'Trust' cannot be considered as an asset of the 'Corporate Debtor'. It is significant to mention that in the instant case even the margin money was put in by the Bank and not by the 'Corporate Debtor'. 172. The IBC does not contemplate termination of all contractual agreements, creating legal rights in favour of third parties. There can be cases, where Corporate Debtor even during currency of the CIRP can terminate contractual agreements as....
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....ises in relation to the insolvency, a party can be restrained from terminating the contract only if it is central to the success of CIRP. Crucially, the termination of the contract should result in the corporate death of corporate debtor. In Gujarat Urja [Gujarat Urja Vikas Nigam Ltd. v. Amit Gupta, (2021) 7 SCC 209 : (2021) 4 SCC (Civ) 1] , this Court held thus : (SCC pp. 309-10, paras 176-177) "176. Given that the terms used in Section 60(5)(c) are of wide import, as recognised in a consistent line of authority, we hold that NCLT was empowered to restrain the appellant from terminating PPA. However, our decision is premised upon a recognition of the centrality of PPA in the present case to the success of CIRP, in the factual matrix of this case, since it is the sole contract for the sale of electricity which was entered into by corporate debtor. In doing so, we reiterate that NCLT would have been empowered to set aside the termination of PPA in this case because the termination took place solely on the ground of insolvency. The jurisdiction of NCLT under Section 60(5)(c) of IBC cannot be invoked in matters where a termination may take place on grounds unrelated to the in....
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.... challenge the approval of Resolution Plan. It is sufficient to notice that filing of claim did not arise by the Appellant before the RP, since the lease was never terminated, giving any entitlement of cause to the Appellant. Further, Directors of the Corporate Debtor were all in prison, much before the commencement of CIRP and were released in November 2022 and March 2023. The Directors of the Corporate Debtor, who were also Promoters of the Corporate Debtor, could not participate in the CIRP, nor had an opportunity to appear as Suspended Directors/ Promoters of the Corporate Debtor. 176. The Resolution Plan extinguishes the right of the Appellant to the building on the lease land. Hence, by approval of Resolution Plan by the Adjudicating Authority, the Appellant can very well file the Appeal in exercise of its right as granted under Section 61, sub-sections (1) and (3). The Appellant, who feels aggrieved by the order passed by the Adjudicating Authority, approving the Resolution Plan, can very well maintain the Appeal and the locus of the Appellant to file the Appeal cannot be questioned by the SRA. It is further submitted that the Appellant did not challenge the inclusion of ....
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....s entitled for relief in the Appeal. Company Appeal (AT) (Insolvency) No. 1307 of 2023 - DS Kulkarni and Company Vs. Mr. Manoj Kumar Agarwal, Resolution Professional of D.S. Kulkarni Developers Limited and Ors. 179. The Appellant, which is a Partnership Firm and sister concern of the Corporate Debtor has questioned inclusion of property owned by the Appellant in the Resolution Plan. The Appellant's case is that in the CIRP of the Corporate Debtor, only assets of the Corporate Debtor can be included and third party assets, including the assets of the subsidiaries, cannot be included in the CIRP of the Corporate Debtor. The Appellant's case is that by two Sale Deeds executed on 07.06.2002 by Shivaji Ingale and Shivaji Vithalrao Ingale conveyed 20.5 R each of Survey No.326/1 at Village Bavdhan. The Appellant's case is that the Appellant's name is recorded in the Extract 7/12 and continues upto to the date. The said land did not belong to the Corporate Debtor and could not have been included in the assets of the Corporate Debtor. The Appellant, thus, questions the inclusion of the Appellant's land in Appendix IV of the Resolution Plan, which contains description of the properties....
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....Class B Total B 0.00.00 Total A+B 0.90.40 Assessment 5.40 Judi Special Ass. (6334) Outstanding Mutations - No. Last Mutation No.6334 Date: 30.06.2018 Boundaries and Land Measurement Marks Old Mutations: (1273), 1370, 1584, 1627, 1967, 2006, 3067, 3203, 3204, 3986, 5922, 5969, 6117 This Village Form No.7 is digitally signed on date 23/06/2019: 08:42:25 PM and since data of Village Form 12 is self certified, no signature stamp is required on 7/12 Record. 7/12 Download Date: 06.07.2023; 13:33:05 AM. A No.2506100001033402 should be used on the website https://digitalsatbara.mahabhumi.gov.in/DSLR for valid verification." 181. We may now notice the relevant Appendix IV, where the description of the properties have been mentioned, where at Item No.11, land situated at Village Bavdhan, has been included ....
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....uary 14, 2019. I say that due to the voluminous nature of the said Order, the complete copy is not annexed herewith. Therefore, I crave leave to file the complete copy of the said Order as and when directed by this Hon'ble Tribunal." 183. Provisional Attachment Order was subsequently confirmed by the Adjudicating Authority under the PMLA Act. Provisional Attachment Order mentions at Sl. No.40, Survey No.326/1, which was in the name of Shirish D Kulkarni. It is relevant to notice Item No.40 of the Schedule, which is part of the order dated 05.08.2019, which is as follows: Sl No. Name of the owner Place where property situated Nature of property Description of the property Area Documents details Value Rs. in Lakhs Remarks 40. Shirish D Kulkarni Bavdhan Land Survey No.326/1 at Village Bavdhan Tal. Mulshi Dist.Pune Area 0 H 39 R 0 H 39 R Sale Deed 860/2015 22/01/2015 11728/2015 & 7/12 Extract 497.65 Value as per Sale 184. The Provisional Attachment Order did include area of Survey No.326/1, area 39 R in the name of Shirish D Kulkarni. The order dated 05.08.2019 referred to Bavdhan property, in which area of 41 R is mentione....
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.... the Appeal and he included the entire Survey number on the basis of PAO. Firstly, the PAO does not include the entire Survey No.326/1, it only includes area of 39R in the name of Shirish D Kulkarni and area of 41R in the name of Corporate Debtor, whereas the area, which is recorded in the name of Appellant 20.5 and 20.5 till continues in Extract 7/12 and is different area from the area, which was attached from Shirish D Kulkarni and the Corporate Debtor. We have already noticed that Sale Deed, which was executed in favour of the Appellant on 07.06.2002, clearly mentions the total area of 326/1 admeasuring an area of about 1 H 21.4 R, which is clear from the following part of the Sale Deed, executed by Shivaji Vithalrao Ingale, which is as follows: "SHRI SHIVAJI VITHALRAO INGALE, Age : Adult, Occupation: Business, Residing at-S. No.326, H. No.1, Bavdhan Budruk, Taluka - Mulshi, Dist. Pune Hereinafter referred to as the "VENDOR" (which expression unless repugnant to the context or meaning thereof shall mean and include his heirs, administrators, executors and assigns etc.) THE PARTY OF FIRST PART M/S. D. S. KULKARNI & COMPANY, ....
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....1R, which is recorded in the name of the Appellant was neither attached in PAO, now can be part of the assets of the Corporate Debtor. We have already noticed the provisions of Section 18(1)(f) and (g) Explanation and precedent of the Hon'ble Supreme Court and this Tribunal, while considering the Company Appeal (AT) (Insolvency) No.1308 of 2023, which annunciation, fully supports the submission of the Appellant. 188. Learned Senior Counsel appearing for Respondent Nos.2 to 4 in their reply sought to raise objection on the ground of delay and latches. The Partners of the Appellant Deepak Kulkarni and Hemanti Kulkarni were confined to prison and could be released only in November 2022 and March 2023. Partners of the Appellant were not part of the CIRP. The fact that they have filed the Appeal challenging the order approving the Resolution Plan including the assets of the Corporate Debtor, cannot be thrown out on the ground of delay and latches as contended by Respondent Nos.2 to 4. The learned Senior Counsel for Respondent Nos.2 to 4 has also referred to the orders passed by this Tribunal as well as the Hon'ble Supreme Court, where the Appeals filed by the Appellant in this Tribun....
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....relief. Company Appeal (AT) (Insolvency) No.1660 of 2023 191. The above Appeal has been filed by 25 Appellants whose claims were not accepted by the Resolution Professional on the ground that apart from allotment letters, they have not filed any other documents to prove payments to the Corporate Debtor. Appellants have filed their claims immediately after publication. The claims were filed by the Appellants in October, 2019 and were entertained but rejected on 25.05.2021. In the Appeal, Appellants have filed the list of creditors as issued by the Resolution Professional dated 25.05.2021. The rejection of the claims of the Appellants were basically on two grounds. Firstly, apart from allotment letters issued by the Corporate Debtor no supporting documents have been provided to prove that the payments have been received in books of the Corporate Debtor. The entry with regard to Appellant No.1 in the list of creditors is as follows:- " Claim is rejected as claim is based on just the allotment letter and no other supporting documents provided and amount is also not received in the books of accounts of the Corporate Debtor " 192. The claim of some of the Appellants was....
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....arges, VAT, LBT, GST, Service Tax, Share Capital and Entrance Fees if applicable and any other expenses, taxes and levies as may be required and demanded from time to time. You are aware that, K-52 (SCP) in Lower ground floor is allotted to you. You are also aware that, said allotment will be finalized as per rules and regulations of proposed society or apartment condominium. It is informed to you to execute and register the agreement immediately. However on your specific request we have agreed to execute and register necessary agreement under section 4 of the Maharashtra Ownership Flat Act 1963 in respect of the said flat on or before APRIL-2021 or completion of flat or possession is flat whichever is earlier by paying the balance consideration, required duties, charges, taxes and expenses within the prescribe period. The possession of flat will be handed over after registration of agreement on completion of formalities of required documentations. A request letter dated 25/04/2017 is furnished by you and relying on the undertaking mentioned in the request letter, this allotment letter is issued to you. For D.S.Kulkarni Developers Ltd. President"....
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....ited' is land owner with regard to which a Development Agreement was executed in favour of the Corporate Debtor on 31.12.2013 and in the Resolution Plan, Resolution Applicant has accepted to allot flats to 'DSK Global Education and Research Limited'. In the application which was filed before the Adjudicating Authority by the Appellant through 'DSK Aanandghan (Association of Allotment Letter Holders)' being IA No. 1844 of 2021, the details of date of allotment, payments, total consideration, amount paid, allotment date as well as issuance of allotment letters have been mentioned. The list contains details of 32 homebuyers which included all the Appellants. 196. 'DSK Global Education and Research Limited' is a Pvt. Ltd. Company consisting of the directors who were also directors of the Corporate Debtor. We have already noticed above that the Corporate Debtor with its sister concern, firms, partnership firms all engaged in Real Estate Development. 'DS Kulkarni and Company' and 'DS Kulkarni Associates' were partnership firms which were registered much prior to incorporation of the Corporate Debtor and was carrying business. The financial statement which was filed by the Resolution P....
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.... access the records of the Corporate Debtor for verifying the claims and only document which have been relied by the Resolution Professional were the documents received from Investigation Agencies and Directorate of Enforcement. Issuance of allotment letters by the corporate debtor to the Appellants were more than two years before initiation of the CIRP. There can be no reason to dispute the issuance of allotment letters or the admission contained therein of the payment. 'DS Kulkarni and Company' is a partnership firm of the consisting of partners Deepak Sukharam Kulkarni, Hemanti Sukharam Kulkarni and Sirish Deepak Kulkarni who were all directors of the corporate debtor. Rejection of the claims was on the foundation that no payments have been proved to the corporate debtor. When the corporate debtor itself has acknowledged the payments by issuing allotment letters, it was not open for the Resolution Professional to take stand that no payments have been made. Acknowledgment of the corporate debtor in the allotment letters is sufficient to bind the corporate debtor including the Resolution Professional. Along with the rejoinder-affidavit, copy of the common compilations dated 17.04.....
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....17-2018/11637 4. The Profile of the three professionals is available on the website http://dskcirp.com/ We would like to inform you that Form CA can be downloaded from the website of http://dskcirp.com/ or https://ibbi.gov.in/home /downloads. The Home Buyers should fill the Form and scan all the documents mentioned above along with the Form CA. Thereafter, kindly submit your claim through MAIL ONLY NO PHYSICAL COPY OF CLAIM WILL BE ACCEPTED at the email id [email protected] After receiving the mail the team of Interim Resolution Professional will verify the documents and admit the claim accordingly and same will be uploaded on www.dskcirp.com." 198. When we look into the aforesaid directions issued by the Resolution Professional, it was mentioned that other relevant documents including any in Clause 2(b) one of the documents mentioned was letter of allotment. The claim filed by the Appellants was in category of letter of allotment and the Resolution Professional took too technical views to reject their claims. Homebuyers who have paid the amount to sister company which was acknowledged by the corporate debtor in the allotment letters cannot be washed ....
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....nal cannot be accepted in view of the wide canvas of clause 5(8)(f) which provides for "any amount raised under any other transaction" when the homebuyers have paid amount to DS Kulkarni and Company, which payment has been acknowledged and accepted by the Corporate Debtor, the said amount is an amount raised from an allottee under Real Estate Project. When allotment letter has been issued by the corporate debtor, the Appellants have to be treated as an allottee within the meaning of Section 5(8) explanation. We, thus, do not find any substance in the submission that the Appellants are not allottees and there is no disbursement to the corporate debtor for time value of money. Resolution Professional has taken stand in paragraph 7 of the reply that Appellants had made an agreement with the group entity of the corporate debtor i.e. DSK Global Education and Research Ltd. and payments made to DS Kulkarni and Company on the basis of allotment letter was never deposited or encashed by the corporate debtor and the amount was paid by the allottees to DS Kulkarni and Company, the sister concern of the Corporate Debtor. The fact that amount was not deposited by the corporate debtor or encashe....
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....r Before Commencement of 8th Slab Rs. 91680/- On or Before Commencement of 9th Slab Rs. 91680/- On or Before Commencement of 10th Slab Rs. 91680/- On or Before Commencement of 11th Slab Rs. 91680/- On or Before Commencement of 12th Slab Rs.91680- On or Before Commencement of 13th Slab Rs. 91680/- On or Before Commencement of Brick Work Rs. 68760/- On or Before Commencement of Internal Plaster Rs. 687601/- On or Before Commencement of Flooring Rs. 68760/ At the time of obtaining completion certificate or at the time of possession whichever is earlier Rs. 2292000/- Total" 203. The above Agreement also clearly dispels the stand taken by the Resolution Professional that all payments have to be shown in the books of account of the corporate debtor. Corporate debtor itself has entered into Registered Agreement with the Appellants where payments have to be made to 'DSK Global Education and Research Ltd.'. Present is a case where in the Registered Agreement both 'DSK Global Education and Research Ltd.', Corporate Debtor and the Appellants are party. 204. In the present case, the Appellants could not file the claim since their case....
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....hat reliance on the judgment in K V Developers Private Limited is clearly misplaced and does not help the Appellants in the present case." 207. In the present case, Appellants have brought on record the Registered Agreement dated 30.06.2017 entered with the Corporate Debtor which is a relevant record for consideration of the claim of the Appellants. The proceeding which arose from the order dated 21.11.2023 was the proceeding in which the claim was rejected of the Appellants as barred by time and also on the ground that the Resolution Plan has already been approved on 13.08.2021 whereas claim was filed by the Appellants on 29.03.2023. We are of the view that the order passed by the Adjudicating Authority on 22.11.2023 as well as this Tribunal on 21.02.2024 shall not operate against the Appellants in consideration of their claims which is raised in the appeal filed challenging the order approving the Resolution Plan. While considering the Company Appeal (AT) (Insolvency) No.1660 of 2023, we have already taken the view that the stand of the Resolution Professional that only those claims were accepted whose payments were reflected in the records of the corporate debtor has not been....
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....00.00 16- Apr- 15 HDFC BANK-0148 100 0018132 CH. NO. 000397- HDFC BANK LTD. CAMP BRANCH, PUNE 411 001 Payment 25,00,000.00 23- May- 15 HDFC BANK-0148 100 0018132 CH. NO. 000445- HDFC BANK LTD. CAMP BRANCH, PUNE 411 001 Payment 25,00,000.00 Closing Balance 60,00,000.00 60,00,000.00 60,00,000.00 60,00,000.00 1- Apr- 16 Opening Balance 60,00,000.00 28- Jul- 16 Kotak Bank A/c No.- 6311761128 CH. No.- 634399- BOM, BUDHWAR PETH Receipt 10,00,000.00 29- Jul- 16 Kotak Bank A/c No.- 6311761128 CH. No.- 634399- BOM, BUDHWAR PETH- CHEQUE RETURNED Payment 10,00,000.00 30- Jul- 16 Kotak Bank A/c No.- 6311761128 RTGS RECEIVED FROM DSK (BANK OF MAHARASHTRA- UTR NO. MAHBR5201607300 2644693) Receipt 10,00,000.00 Closing Balance 70,00,000.00 20,00,000.00 50,00,000.00 70,00,000.00 70,00,000.00 Apr- 17 Opening Balance 50,00,000.00 ....
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.... You have paid the total consideration of RS. 76,00,000/- (Rupees Seventy Six Lakhs Only) for the sald Flat. Apart from total consideration you have also agreed to pay Stamp Duty, Registration Fees, Initial Maintenance charges, VAT, Service Tax, GST, LBT, Share Capital and Entrance Fees if applicable and any other expenses, taxes and levies as may be required and demanded from time to time. You are aware that, a Car park No: 97 (SCP) on I basement floor is allotted to you. You are also aware that, said allotment will be finalized as per rules and regulations of proposed society or apartment condominium. It is informed to you to execute and register the agreement immediately. However on your specific request we have agreed to execute and register necessary agreement under section 4 of the Maharashtra Ownership Flat Act 1963 in respect of the said flat on or before September 2017 within the prescribe period by complying required formalities and paying Stamp duty, Registration charges and other expenses as mentioned herein above. A request letter dated 20-04-2017 is furnished by you and relying on the undertaking mentioned in the request letter, this allotme....
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....ng. 4. In view of above, this Authority is of the view that since there is no agreement between the complainant and the respondent, section 18 of the Real Estate (Regulation and Development) Act, 2016 is not applicable to this case and therefore, the complainant can not seek interest for the delayed possession. However, since the respondent has given the undertaking to register the agreement and the complainant has also accepted the same, nothing survives in this complaint. Hence the complaint stands disposed of." 212. When before Maharashtra RERA corporate debtor has acknowledged that it shall execute the agreement of sale in favour of the appellants, there can be no denial that appellants are allottees within the meaning of IBC. Resolution Professional after receiving of the claims by the Appellants has also sent a communication to homebuyers dated 17.07.2020 where again it was observed that the claim will be admitted subject to verification of the books of accounts of DSDKL. The allotment letter which was issued in April 2017 clearly acknowledges the receipt of the entire payment and it was not appropriate for the Resolution Professional to reject the claims of the a....
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.... be justified. The plan having been approved by the Adjudicating Authority on 23.06.2023 against which order these appeals have been filed, there is no occasion now for directing the Adjudicating Authority to consider the IA No.2157 of 2021 on merits. Hence, we have proceeded to examine the claim of the Appellants on merits. We are fully satisfied that appellants claim was not liable to be rejected on the ground that they have not submitted any document to prove the payment to the corporate debtor when the corporate debtor itself in the allotment letter has acknowledged the payment of entire consideration. We, thus, are satisfied that the claim of the appellants deserves consideration. The Resolution Professional erred in not accepting the claims. 214. Learned Counsel for the RP as well as for the SRA tried to condemn the allotment letter issued by the Corporate Debtor in favour of the Appellants, Homebuyers as fraudulent exercise, without any payment to Corporate Debtor. We need to look into the background facts under which allotment letters were issued by the Corporate Debtor in April 2017 in favour of the Appellants, which were more than two years prior to initiation of CIRP.....
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....by the employees being Company Appeal (AT) (Insolvency) No.1226 of 2023, their case is that the payment of the amount to the appellants is less than 1% of their claims. Employees in their appeal have also raised issue of valuation. We have already considered the question of valuation of the corporate debtor while considering the Company Appeal (AT) (Insolvency) No.63 of 2024. Hence, we see no reason to consider the question of valuation at the instance of the employees. The Resolution Professional has filed reply in both the appeals. It is submitted by the Resolution Professional that the plan has been approved by 83.37% of the vote share. It is submitted that the operational creditors have not filed any objection before the Adjudicating Authority. When we look into the pleadings in the appeals filed by the operational creditors as well as the employees, no grounds have been made out that payments which have been offered to them is less than their entitlement as per Section 30(2)(b). It is now well settled that plan which is approved by the CoC, can be interfered with only when there is non- compliance of the provisions of Section 30(2). Operational creditors in which employees wer....
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....ng an order for approval of resolution plan under this sub-section, satisfy that the resolution plan has provisions for its effective implementation. 218. While considering Company Appeal (AT) (Insolvency) No. 1307 of 2023 - DS Kulkarni and Company and Company Appeal (AT) (Insolvency) No. 1308 of 2023 - DSK Global Education and Research Pvt. Ltd., we have come to the conclusion that the Resolution Plan, includes the assets, which do not belong to the Corporate Debtor and under Section 18(1)(f) and (g) explanation, the assets of only Corporate Debtor can be taken control by the RP. We have already held that Resolution Plan cannot include the assets of third party, which are although in possession of the Corporate Debtor, but not owned by the Corporate Debtor. Inclusion of assets of Appellant in Company Appeal (AT) (Insolvency) Nos. 1307 and 1308 of 2023 is, thus, clearly in violation of law. While considering the Company Appeal (AT) (Insolvency) No. 1308 of 2023, we have held that the lease, which was granted to the Appellant DSK Global Education and Research Pvt. Ltd. was never terminated and the building, which was constructed by the Appellant, was owned by the Appellant and th....
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.... This Appeal is partly allowed. Excluding the area of 41R recorded in the name of Appellant in Survey No.326/1, the Resolution Plan at Appendix-IV, Item No.10, is required to be modified and substituted to make the Resolution Plan compliant. Thus, Appendix-IV, Item No.10 stand substituted by following : - Sr. No. Survey No 10 * 326/1 (excluding area of OH41R recorded in the name of DS Kulkarni and Company). 3. Company Appeal (AT) (Insolvency) No.1308 of 2023 * This Appeal is partly allowed. Clauses 13.4, 13.5 and 13.6 of the Resolution Plan are deleted from the Resolution Plan to make the Resolution Plan compliant. The Appellant's (DSK Global Education and Research Pvt. Ltd.) rights and building standing on the lease land, shall not be treated to have extinguished. 4. Company Appeal (AT) Insolvency Nos.1361, 1385, 1660 of 2023 * These Appeal(s) filed by Homebuyers are allowed. The claims of the Appellant(s) are accepted as allottees of the Corporate Debtor. The order of RP, rejecting their claims is set aside. The Appellant(s) name shall be treated to be included in the list of Homebuyers, whose claim have been accepted and they ....