2024 (3) TMI 1465

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... Kunal Waghmare, ORDER 1. Rule. Appearing respondents waive service. 2. This is by no means an isolated case. We are seeing this again and again. A developer company undertakes redevelopment. It commits default. It falls into arrears of transit rent. It then has accumulated debt. It finds itself in a Corporate Insolvency Resolution Process ("CIRP") under the Insolvency and Bankruptcy Code 2016 ("IBC"). When the society in question or in a given case the owner, terminates the Development Agreement and this often happens before the developer is in CIRP, as has happened in this particular case, the developer then comes forward and says that there is a moratorium under Section 14 of the IBC and therefore no further redevelopment can take pl....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....s obligations under the DA, viz., to provide transit rent in a timely fashion and not to be in arrears and to construct and complete the construction of the redeveloped building on a prescribed time schedule. If it has failed in these two obligations, then there is a complete failure of consideration, and no rights accrue to it. The entire argument of the RP is predicated on a false assumption that there are vested rights in the free sale component which can be delinked from obligations under the DA. This is an inconceivable position in law. 5. The second argument that militates against AA Estates is one that is purely in equity. What we have been told is that while AA Estates grinds its way through a CIRP, the result of which may be entir....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....me and to receive transit rent. 8. The Government itself is alive to this situation. It has taken policy decisions in that regard. We need not visit those at this stage. 9. AA Estates itself is no stranger to this either. It has taken precisely this argument in an even more dramatic scenario, that of the collapse of an entire building called Govinda Tower many decades ago in 1998. AA Estates was before us as a Respondent in Interim Application (L) No 26072 of 2022 that we disposed of by our order and judgment dated 13th December 2023, reported as Nagesh Madhava Surana & Ors v State of Maharashtra & Ors. 2023 SCC OnLine Bom 2849.2) We dealt with precisely these submissions including the question of vested rights if any in AA Estates, Secti....