TaxTMI 
TaxTMI 
2025 (7) TMI 1211
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....GMENT ASHOK BHUSHAN, J. This Appeal has been filed challenging order dated 24.07.2024 passed by National Company Law Tribunal, New Delhi Bench (Court-II) in IA No.3926 of 2023 and other connected IAs (six in numbers). The Appellant aggrieved by order of the Adjudicating Authority in the aforesaid IAs, has filed this Appeal praying for limited relief as sought in the Appeal, which we shall notice hereinafter. By the impugned order the Adjudicating Authority has permitted for withdrawal of IA No.3926 of 2023 as well as IA No.3325 of 2020 and IA No.3330 of 2020. 2. Brief facts of the case necessary to be noticed for deciding the Appeal are: (i) The Corporate Debtor ("CD") was made allotment of Plot No.GH-005 in Sector-110, having an area of 1,64,120 square meters, for development of a Group Housing Project named Lotus Panache on the said land by Noida. (ii) The CD approached the Appellant, which is registered Company for sale of undeveloped area of Plot measuring 2500 square meters with right to construct, promote, advertise and sell the shops located at upper ground floor and lower ground floor of the commercial block for consideration of Rs.32 crores. An A....
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....for avoidance of transaction with the Appellant. Another IA No.3330 of 2020 was filed by the erstwhile RP under Section 74(1) read with Section 60(5). The Appellant also filed IA No.3025 of 2022 raising objections to the Resolution Plan and praying for rejection of the same. (ix) Correspondence took place between the Appellant and the CD to resolve the issues between them. A Settlement Agreement dated 30.05.2023 was entered between the Appellant, SRA (Respondent No.3 herein) and the RP, where the Appellant offered to pay an amount of Rs.50 crores and to construct the school at Project 'i-Ring'. The settlement was placed before the CoC in its 25th Meeting held on 06.06.2023 and the CoC by requisite vote share approved the Settlement Agreement dated 30.05.2023. (x) IA No. 3926 of 2023 was filed jointly by the Appellant and RP for accepting the settlement entered between the parties dated 30.05.2023. IA No.3588 of 2023 was filed by Respondent No.2 - Ashmeet Singh Bhatia, objecting to settlement dated 30.05.2023. Another IA No. 3596 of 2023 was filed by Ashmeet Singh Bhatia, objecting to settlement as well as Resolution Plan. (xi) The then RP executed Shop Bu....
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....the order of the Adjudicating Authority, specially directions under paragraph 79, relating to the Appellant submits that Appellant has executed an Agreement to Sell with the CD on 22.04.2016, much before initiation of CIRP on consideration of Rs.32 crores. The CD has granted all advertisement rights, including right to construct entire Panache Arcade, including school, shop to the buyer without any additional cost to the CD. The entire advertisement rights were transferred to the Appellant, who started construction in the year 2017. The entire construction of commercial complex of upper ground floor and lower ground floor have been constructed by the Appellant. The Appellant also has agreed to construct the nursery school on 1st Floor of the commercial complex with its own cost and handover it to the CD. An Agreement was also entered with M/s Lotus Panache Flat Buyers Association, who has also agreed that construction be carried on and for sale of shops in shopping arcade in Lotus Panache by the Appellant for a total sale consideration of Rs.32 crores. The Appellant has also deposited necessary compounding charges for conversion of the land used into commercial complex and has also....
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....validation charges have already been deposited by the Appellant. 5. Learned Counsel for the RP submits that the then RP after lot of correspondence and deliberations has placed the Settlement Agreement dated 30.05.2023 before the CoC in 25th Meeting, which was approved with requisite majority. It is submitted that in the CIRP, the erstwhile RP appointed two Valuers to value the assets and the under construction retail block named 'i-Ring' was valued as Rs.58 crores and a liquidation value of Rs.43.5 crores as on 10.01.2019 (insolvency commencement date). The Appellant having offered Rs.50 crores for the commercial complex and offered to construct a school, the CoC has accepted the offer with its overwhelming majority of 96% vote share. Subsequent to approval of Settlement Agreement by the CoC, the then RP filed an Application No. 3926 of 2023 jointly making prayers to dispose of IA 3325 of 2020 and 3330 of 2020 in terms of Settlement Agreement. It is submitted that Respondent No.2 a single Homebuyer, who is an allottee of Flat No.2502 in Tower 19 of the Lotus Panache Project, has no locus to file any objections, either to the Settlement Agreement or to the Plan. A single Homebuy....
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.... filed an Application before the Adjudicating Authority seeking discovery of documents regarding the commercial structure. It is submitted by Respondent No.2 that Appeal filed by the Appellant deserves to be dismissed. 7. We have considered the submissions of learned Counsel for the parties and have perused the record. 8. The CIRP commenced against the CD on 10.01.2019. The Appellant claims to have entered into an Agreement to Sell dated 22.04.2016, which is part of the Appeal. In the Agreement, Clause-C, 3.1 and 5.1 are as follows: "C. AND WHEREAS the Buyer has approached the Seller and proposed to buy all retail shops situated at LGF & UGF admeasuring super area of 64,000 sq. ft. (equivalent to 5945.79 sq. meters) out of the said Lotus Panache Arcade (hereinafter referred to as the "Retail Shops") and for that purpose, the Seller has (i) agreed to sell, allot and assign to the Buyer, the Retail Shops (duly detailed out in Annexure- B) with uninterrupted, exclusive, full and free right to construct (entire Panache Arcade including School for the Seller without additional cost to the Seller), promote. advertise and market the Retail Shops in such manner it deems fit ....
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....n 65217 sq.ft. of the shops the settlement amount shall also increase on per sq.ft. basis. The settlement amount shall be payable in accordance with the payment milestones reflected in Annexure A of this Settlement Agreement. It is specifically agreed and understood that the entire factual and legal position surrounding the insolvency proceedings and pending dues/dispute with Noida Authority are well within the knowledge of SFL and SFL will pay the settlement amount in accordance with the payment milestones provided in Annexure A, without any demur or protest. 6. It is agreed and understood that the shops are being allotted to SFL and/or its nominees on 'as is where is' and the entire cost of completion of balance Infrastructure to make the shops market ready shall have to borne by SFL and/or its nominees from its/their own sources without any liability being fastened on GGPPL. Possession of the complex already vest with SFL, and SFL can move ahead for completion of balance construction/infrastructure works provided payments are made as per the Payment Plan annexed as Annexure A. It is agreed and understood that SFL shall be solely responsible for arranging infrast....
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....ttlement Agreement shall become binding and enforceable against the parties, only pursuant to the same being approved by the committee of creditors of GGPPL and followed by the Hon'ble NCLT taking cognizance of the same and disposing of the above-stated pending applications in terms thereof." 12. It is also relevant to notice that CoC in its 25th Meeting approved the Settlement Agreement with 96% vote share. The resolution passed in Item No.B1 was approved with 96% vote share, which is as follows: "ITEM NO. B1 TO DISCUSS AND APPROVE THE TERMS OF SETTLEMENT BETWEEN M/S SHOMIT FINANCE LIMITED AND THE CORPORATE DEBTOR. "RESOLVED THAT the terms of Settlement as per the Term Sheet dated 30.05.2023 executed between M/s Shomit Finance and the Resolution Professional, is hereby approved, and the RP is hereby authorized to do all acts, deeds, and things as may be required to have the terms of settlement recorded before the Hon'ble NCLT." Approve : Votes 28791: 96% Reject : Votes 8328: 3% Abstain : Votes 4610: 2%" 13. Application - IA No.3926 of 2023 was jointly filed by the Appellant and RP. The prayers made in IA No.3926 o....
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....'i-Ring' commercial complex is asset of CD. In the wake, there should be no difficulty in allowing the RP and Shomit Finance Limited to withdraw IA-3325/2020, IA- 3025/2022 and IA-3330/2020. However, it is made clear that the withdrawal of IAs would not be construed as approval of the settlement reproduced in IA-3926/2023, by this Tribunal. The IAs are allowed to be withdrawn with a semblance that M/s Shomit Finance Limited has conceded that the 'i-Ring' commercial complex is the asset of the CD and would be dealt with in accordance with the development plan qua the project as approved by NOIDA. The IA-3596/2023, filed by the Applicant homebuyer which is objection to the IA-3926/2023 broadly raised concern regarding the fate of 'i- Ring'. It is already clarified that the withdrawal of IA-3025/2022 would have the ramification that the 'i-Ring' would be treated as a set of CD. Such clarification would address the concern raised in IA3596/2023." 15. The Adjudicating Authority in paragraph 68 has clearly observed that withdrawal of IAs shall not be construed as approval of settlement reproduced in IA-3926/2023 and further 'i-Ring' commercial complex shall be treated to be the asset ....
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....in the impugned order with respect to concerned IAs. Relevant directions with regard to issues present in the Appeal are contained in paragraph 79, which is as follows: "79. In the wake of the aforementioned findings and discussions and in view of the irregularity in valuation and accounting of assets of CD and the plea raised in IA-506/2024, it is ordered thus:- a) The Resolution Plan stands remitted back to the CoC. It would be for CoC to take a call, as to whether the CIRP should resume from the stage of preparation of IM or from any other stage or the present SRA/PRA's should be given opportunity to submit revised Resolution Plan after Forensic Audit and proper fresh valuation of the assets of the CD. b) The present IP who is functioning as RP qua the CD is replaced with the IPE- ARCK Resolution Professionals LLP (IBBI/IPE- 0030/IPA-1/2022- 23/50013) and henceforth the said Insolvency Professional Entity would act as RP to conduct CIRP qua the CD. c) The present RP would extend all assistance to IPE as a professional. d) The Insolvency Professional Entity would first get the transaction/ forensic audit be conducted qua the CD and the....