TaxTMI 
TaxTMI 
2025 (6) TMI 24
X X X X Extracts X X X X
X X X X Extracts X X X X
.....11.2022 passed by the National Company Law Tribunal, New Delhi Bench (Court-II) ("Adjudicating Authority") in CP (IB) No. 419(ND)/2022. 2. IndusInd Bank Limited, who is the Financial Creditor, is the Respondent No. 1 herein. 3. Hacienda Projects Pvt. Ltd., who is the Corporate Debtor, is the Respondent No. 2 herein. 4. Lotus 300 Apartment Owners' Association (Intervenor), is the Respondent No. 3 herein 5. The Appellant submitted that the Corporate Debtor, Hacienda Projects Pvt. Ltd., is a financially viable entity undergoing a temporary phase of distress caused by circumstances beyond its control. The Lotus 300 Project, launched in July 2011 at Sector-107, Noida, faced significant delays due to protracted litigation over land acquisition. Between 2011 and 2014, the Hon'ble Allahabad High Court quashed notifications under the Land Acquisition Act, 1894, halting construction until 2016, when the NOIDA Authorities settled with landowners by paying 64.7% enhanced compensation. Further disruptions, including demonetization and COVID-19-induced lockdowns, impeded progress, yet the project achieved 90-100% completion by March 2020, with all 330 units sold. 6. The Appellant submitted....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t efforts, constitutes a miscarriage of justice. 10. The Appellant further submitted that the initiation of CIRP causes irreparable prejudice to the Corporate Debtor, its stakeholders, and homebuyers, given the project's near-completion and the company's ability to realize significant receivables. The Impugned Order overlooks the Corporate Debtor's reply to the Section 7 application, which highlighted its temporary hardship and ongoing efforts to fulfil obligations, as well as the Financial Creditor's rejoinder, which failed to refute the Corporate Debtor's solvency or the impact of external delays. 11. Concluding his arguments, the Appellant requested this Appellate Tribunal to set aside the Impugned Order and allow its appeal. 12. Per contra, the Respondent No.1, the main contesting Respondent, denied all averments made by the Appellants as misleading and baseless. 13. The Respondent No. 1, Indusind Bank Ltd., submitted that the present appeal filed by the Appellant against the Impugned Order dated 11.11.2022, lacks merit and is based on incorrect and unsubstantiated averments. The Adjudicating Authority rightly admitted the Section 7 application under the Code, initiating CI....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Impugned Order dated 11.11.2022, admitting the Section 7 petition against Hacienda Projects Pvt. Ltd., suffer from misrepresentation and suppression of facts, prejudicing the rights of homebuyers who have invested over Rs. 636 Crores in the Lotus 300 Project. 21. The Respondent No. 3 contended that the Corporate Debtor's promoters siphoned off Rs. 190 Crores and sold 27,941.95 sq. mtrs. of land (worth Rs. 236 Crores) in 2012 without homebuyers' consent, reducing the project plot from 67,941.95 sq. mtrs. to 40,000 sq. mtrs. in violation of the UP Apartments Act, 2010. The Respondent No. 3 submitted that this fraudulent sale, executed with Noida Authority's collusion, deprived homebuyers of 41.126% of their land value. 22. The Respondent No. 3 submitted that the project, fully funded by homebuyers, required no external loan. The Rs. 64.5 Crores loan from IndusInd Bank in 2017 appears collusive, as the project was reduced to 40,000 sq. mtrs., and receivables were mortgaged based on the original plot size. The Bank's failure to account for the sold land or pursue promoters' personal guarantees suggests an intent to siphon funds. 23. The Respondent No. 3 contended that homebuyers, th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ettle the dues of Corporate Debtor and another projects. The Appellant also argued that he is still willing to negotiate with the Financial Creditors and complete the project. 31. While facts and the ratio of Vidarbha Industries Power Ltd. (Supra) are well known. It is suffice to note that in Vidarbha Industries Power Ltd. there was more money likely to be made available to the therein Appellant which was pending final adjudication before the Hon'ble Supreme Court of India after Vidarbha Industries Power Ltd. won its case at other legal fora and such money was much more than the dues payable by the Vidarbha Industries Power Ltd. (Supra) as such the Hon'ble Supreme Court of India gave the judgment stipulating the viability of the Corporate Debtor in the matter of Vidarbha Industries Power Ltd. (Supra). In contrast to this, in the present appeal there is no material available that the Appellant was in position to repay the financial obligations to the financial creditors. In fact, we note that in IndusInd Bank Limited, the Respondent No. 1 herein, has strongly refuted that the Appellant tried to settle the dues and indicated that the Appellant is just not in position to settle the o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ere admission of a company into CIRP does not directly result in its instant liquidation or dissolution under the Scheme of IBC. 11. It is further contended by the Respondent that a security/comfort letter amounting to Rs. 20 Crore has been issued by a Company namely, Three C Residency Private Limited (third party) in lieu of the outstanding dues of the Respondent. However, the Applicant, through its rejoinder, has shown no confidence in that undertaking and has considered it only a speculative undertaking. 12. We further observe that despite the claim of selling the most of the units (301 out of the 330 units as pleaded by the Respondent in its Reply) in the Project, the Respondent has failed to repay its financial debt, therefore, there is no exceptional case made out whereby despite default, the CIRP shall not be initiated against the Respondent." (Emphasis Supplied) 37. Thus, we note that the Adjudicating Authority has taken into consideration all the facts and law into consideration and came to the conclusion that the Appellant has failed to make out any case for not initiating CIRP. 38. We are not convinced with the arguments of the Appellant that the Appellant is in ....