TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 940
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....t in IA. No. 2889 of 2025 . Mr. Gajanand Kivodiwal, Ms. Tanya Singh, Advocates for Parmesh Construction Co. Ltd . Mr. Govind Jee, Mr. Dmanakuttan K.K & Mr. Rambha, Singh, Advocates for Home Buyers . Ms. Ekta Choudhary, Ayush Kumar and Rushali Sikand, Advocates for Intervenor . JUDGMENT Ashok Bhushan, J. This Appeal by the Suspended Director of the Corporate Debtor of M/s Supertech Realtors Private Limited has been filed challenging the order dated 12.06.2024 passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi Bench, Court-IV admitting Section 7 application filed by the Bank of Maharashtra, Respondent No.1 herein. 2. The Corporate Debtor which is a Real Estate Company has approached the Consortium of Banks led by Union Bank of India for seeking financial assistance to tune of Rs.735.58 Crores. The Bank of Maharashtra, Respondent No.1 was requested to grant Credit Facilities to the tune of Rs.150 Crores for partial financing of development of residential apartments, office, retail and luxury hotel in the name and style of 'Supernova'. A Term Loan of Rs.150 Crore was sanctioned by the Financial Creditor to the Corporate Debtor on 14.12.2012. On def....
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....tted by the Corporate Debtor with the assistance from an investor - M/s Kotak Advisors Ltd. offering 75% of running ledger book balance. In Joint Lenders' Meeting dated 18.03.2024, the Bank of Maharashtra took 2-3 days' time to consult their Head Office. It was pleaded that real-estate project is 80% complete and investor having offered to infuse funds for construction, the Corporate Debtor be permitted to complete the construction. Learned counsel for the Bank of Maharashtra has submitted that OTS earlier approved was not honoured by the Corporate Debtor and before the Adjudicating Authority it was communicated that OTS was not accepted, hence, the Adjudicating Authority passed the order. This Tribunal noted the submissions of the Appellant in Para 6 that Appellant has not disputed debt and default. This Tribunal, however, took note of the submission of the Appellant that revised offer submitted by the Corporate Debtor under which the offer of 75% of running ledger book balance of members of the Consortium was put and present project being a real estate project, 600 units have been allotted and rest of the project shall be completed by the Corporate Debtor with the offer of ....
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.... been given on 18.10.2024 with final revised offer letter dated 06.01.2025 for Supernova Project wherein M/s. Parmesh Construction Company Limited, a group entity of Bhutani Group has to be co-developer to complete the project. The Bank of Maharashtra informed that they in-principally agree for the settlement, subject to the approval from their respective competent authority. The meeting was deferred to obtain a consensus on OTS proposal. The Appellant claimed to have entered into a Co-Development Agreement on 11.11.2024 with M/s. Parmesh Construction Company Limited for carrying out the development. On 15.07.2025, an email was sent by the Consortium of Banks to the Appellant informing that all of the OTS proposal submitted by the Appellant and revised proposal were discussed in the Joint Lenders' Meeting and were not found acceptable to the Consortium Banks. The upfront amount deposited in the no lien account was also remitted back. 5. In the above background facts and development which took place during pendency of the Appeal, Appeal came to be listed on 17.07.2025, when learned counsel for the Respondent submitted that settlement with the Financial Creditor not found acce....
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....re successfully completed and units were handed over to the homebuyers. It is submitted that the appellant has offered revised OTS proposal to the Consortium of Banks with 100% outstanding ledger balance which although was in-principle agreed by all banks in February, 2025, however, on 15.07.2025, without giving any reason, the Consortium of Banks have rejected the OTS. The rejection of OTS by the Consortium Banks is wholly arbitrary and is not in the interest of the completion of the project. Consortium of Banks including the Respondent have to give reasons for rejecting the OTS proposal. It is submitted that Noida Authority has also granted approval in the year 2024. It is submitted that Consortium of Banks had no jurisdiction to arbitrarily reject the OTS proposal given by the Appellant. The construction has to be completed through reverse CIRP for which agreement with Co-Developer has already been entered into and this Tribunal may permit completion of the project through Co-Developer - M/s. Parmesh Construction Company Limited. 9. Shri Sudhir Makkar, learned counsel appearing for the Bank of Maharashtra opposing the submissions of learned counsel for the Appellant submits tha....
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....tted that in the present case no grounds have been made out to interfere with the impugned order. Appeal deserves to be dismissed and CIRP be proceeded in accordance with law. 10. Shri Krishnendu Datta, learned senior counsel appearing for L&T Finance submits that L&T Finance has also filed its claim before the IRP which claim has been partially accepted and the L&T Finance is taking steps with regard to the claim which was not accepted. It is submitted that proposal submitted by the Appellant by bringing a Co-Developer, which is another real estate company cannot be accepted. The resolution applicant for completing the project has to be selected in accordance with the I&B Code and Regulations therein. 11. Shri Sunil Fernandes, learned counsel appearing for the Applicant in I.A. No.2889 of 2025 submits that the majority of homebuyers are in support of the Developer - M/s. Parmesh Construction Company Limited which has offered the finance to complete the project. Permitting the Corporate Debtor with M/s. Parmesh Construction Company Limited to complete the project is in interest of the homebuyers which may be permitted. 12. Learned counsel appearing for the Supernova Apartm....
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.... Debtor. Hence, the debt and default having been proved, the Adjudicating Authority was entitled to pass the order for admission of Section 7 application. 18. The submission which has been pressed by the Appellant in support of the Appeal is that the CIRP in the present case being of a real estate infrastructure company which is carrying out a project for homebuyers, reverse CIRP needs to be followed as has been laid down by this Tribunal in large number of cases, as also approved by the Hon'ble Supreme Court. It is submitted that present is a fit case where project need to be completed with the assistance of the Appellant, staff and officers of Corporate Debtor under the supervision of the IRP. It is submitted that M/s. Parmesh Construction Company Ltd. has come up and entered into a MOU for completion of the project, in which settlement proposal the offer has been given to pay 100% ledger balance of the Financial Creditors. Completion of the project under reverse CIRP is in the interest of the homebuyers whose interest has to be given precedence in considering CIRP of a real estate infrastructure company. Learned counsel for the Appellant in support of his submission has placed ....
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....e has operated, both to the Code Itself as well as to subordinate legislation made under it. This process is an ongoing process which involves all stakeholders, including the petitioners." In view of the observation of the Hon'ble Supreme Court, we experimented as to whether during the Corporate Insolvency Resolution Process the resolution can reach finality without approval of the third party resolution plan." 20. This Tribunal in the above case noted that one Uppal Housing Pvt. Ltd. agreed to play the role of lender (Financial Creditor) and JM Financial Credit Solutions Ltd. one of the financial institution has agreed to cooperate in terms of the agreement that they will get 30% of the amount paid by the allottees at the time of registration of the flat/apartment. In Para 13 of the judgment following was observed: "13. One of the Promoter - Uppal Housing Pvt. Ltd.'/Intervenor agreed to remain outside the Corporate Insolvency Resolution Process but intended to play role of a Lender (Financial Creditor) to ensure that the Corporate Insolvency Resolution Process reaches success and the allottees take possession of their flats/apartments during the Corporate Insolvency R....
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....ot. Learned counsel appearing for Supernova Apartment Owners Association has opposed the prayers of the Appellant and submitted that resolution applicant be selected as per the process prescribed in the I&B Code and CIRP Regulations whereas a set of another homebuyers who had filed I.A. No.2889 of 2025 has supported the Appellant and requested that the Appellant be permitted to carry on the project with M/s. Parmesh Construction Company Ltd. as Co-Developer. In the Flat Buyers Association Winter Hills - 77, Gurgaon vs. Umang Realtech Pvt. Ltd., in the background of the above case, this Tribunal has directed for Reverse CIRP. It is useful to notice paragraphs 21 and 25 of the order: "21. In Corporate Insolvency Resolution Process against a real estate, if allottees (Financial Creditors) or Financial Institutions/Banks (Other Financial Creditors) or Operational Creditors of one project initiated Corporate Insolvency Resolution Process against the Corporate Debtor (real estate company), it is confined to the particular project, it cannot affect any other project(s) of the same real estate company (Corporate Debtor) in other places where separate plan(s) are approved by different aut....
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....arned counsel for the Appellant was order of this Tribunal in "Company Appeal (AT) (Ins.) No.406 of 2022, Ram Kishor Arora Suspended Director of M/s Supertech Ltd. vs. Union Bank of India & Anr." where by order 10.06.2024, this Tribunal issued direction for carrying out the project except for the project Eco Village II Project with regard to which CoC was directed to be constituted and Form-G directed to be issued. The construction was directed under supervision of the IRP. In the above case, this Tribunal has noted in the Para 24 that Corporate Debtor has submitted that they shall arrange for interim finance to support the ongoing construction of the different projects. In the above case, there were large number of projects, which fact is noticed in Para 19 of the order, hence, this Tribunal passed order that CIRP process, project-wise resolution to be started as a test to find out the success of such resolution. The said case was thus case for project-wise resolution. With regard to one project Eco Village II, CoC was directed to be constituted and in the rest directions were issued. In the above background, various directions were issued in Para 25 of the order. 25. As no....
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....ed to take into consideration the minutes of the said meeting dated 23-10-2021. Not only that, but NCLAT has also not taken into consideration the Revised Status Report dated 3-11-2021 submitted by the IRP." 27. Before the Hon'ble Supreme Court, an application was also filed by the Appellant giving details of manner for stage-wise construction. It was noticed in the said judgment that out of 452 homebuyers only 7 has opposed the proposal, which fact has been noticed in Para 22 of the judgment, which is as follows : "22. Taking into consideration the salient features of the undertaking given on affidavit by the promoter, Shri Kashi Nath Shukla and the fact that there are only seven out of the 452 homebuyers, who opposed the settlement plan, we find that it will rather be in the interest of the homebuyers that the appellant/promoter is permitted to complete the project as undertaken by him. It is pertinent to note that he has agreed that the cost of the flat will not be escalated. He has also given the timeline within which the project would be completed. Not only this, but he has also undertaken to refund the amount paid by the seven objectors, if they so desire. He has further a....
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....beneficiaries being the allottees have already reached settlement with the Promoter and the fact that the Promoter as an outsider-Financial Creditor has agreed to invest the amount from his own sources and not from the account of Corporate Debtor, proceeded to pass a slew of directions invoking Rule 11 of the NCLAT Rules, which are reproduced hereunder: -" 31. Subsequently, an application was filed being IA No.2166 of 2020 for extension of timelines as laid down in judgment dated 05.02.2020, which application has been allowed by the impugned order. There can be no dispute that in appropriate cases reverse CIRP can be resorted to. 32. The present is a case, where Appellant's case is that a real estate company - M/s. Parmesh Construction Company Ltd. has come up to join hands with the Appellant to complete the project. Appellant along with IA No.2842 of 2025 has brought on record the MOU dated 10.05.2025 entered between M/s. Parmesh Construction Company Ltd., the Appellant and M/s Supertech Realtors Private Limited, which has referred to Co-Development Agreement dated 11.11.2024. Appellant himself has brought on record the Co-Development Agreement dated 11.11.2024 along....
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....BC was summary in nature, and could not be used to individually manage the case of each of the 83 petitioners before it; and (iv) initiation of CIRP in respect of the respondent would put in jeopardy the interests of homebuyers and creditors, who have invested in the respondent's project, which was in advanced stages of completion. 12. In disposing of the petition, the adjudicating authority issued the following directions: (E.S. Krishnamurthy case², SCC OnLine NCLT para 8) "8. ...(a) The corporate debtor is directed to settle the remaining claims as expeditiously as possible, but not later than 3 months, and communicate this decision to all the parties concerned. (b) If aggrieved by the settlement process of the corporate debtor, the remaining petitioners, if any, would be at liberty to approach this adjudicating authority again, in accordance with law."" 35. An appeal was filed in this Tribunal which appeal was also dismissed, against which, appeal was filed in the Hon'ble Supreme Court. The Hon'ble Supreme Court in the above background, has held that the Adjudicating Authority is empowered only to verify whether a default has occurred or if a default has not occu....
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....ity and the appellate authority cannot extend into entering upon merits of a business decision made by a requisite majority of the CoC in its commercial wisdom. Nor is there a residual equity based jurisdiction in the adjudicating authority or the appellate authority to interfere in this decision, so long as it is otherwise in conformity with the c provisions of IBC and the Regulations under the enactment. * * * 47. Hence, once the requirements of IBC have been fulfilled, the adjudicating authority and the appellate authority are duty-bound to abide by the discipline of the statutory provisions. It needs no emphasis that neither the adjudicating authority nor the appellate authority have an uncharted jurisdiction in equity. The jurisdiction arises within and as a product of a statutory framework." (emphasis supplied)" 36. In the present case, as noted above, the revised OTS proposal which was submitted by the Appellant was considered and ultimately was not accepted by the Consortium of Banks which was communicated to the Appellant on 15.07.2025. It is also noticed that one OTS proposal was approved in 2022, which was not adhered to and the said OTS proposal was cancelled by ....