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2025 (11) TMI 529
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....83/2025. Mr. Sujoy Datta and Mr. Jasjeet Singh and Mr. Shubham Raghuwanshi, Advocates for Applicant in IA- 6031 of 2025. Mr. Harsha Gollamudi, Mr. Varad Dwevedi, amd Mrs. Pratima Singh, Advocates for Intervener in I.A. No. 6304 & 6305 of 2025. Mr. Gopal Jain Sr. Advocate with Mr. Sanjeev Singh, Mr. Anish Gupta and Ms. Sandipa Bhattacharjee, Advocates for interveners in IA5133 of 2025. JUDGMENT ASHOK BHUSHAN, J. All these Appeal(s) (except Company Appeal No.1254 of 2025) have been filed against the same order dated 05.08.2025 passed by National Company Law Tribunal, New Delhi, Court-III in IB-112(ND)/2025. By the impugned order, the Adjudicating Authority has admitted Section 7 petition filed by IDBI Trusteeship Services Ltd. against the Corporate Debtor ("CD") - Mahagun (India) Pvt. Ltd. Aggrieved by the above order, these Appeal(s) have been filed. 2. Company Appeal (AT) (Ins.) No.1186 of 2025 has been filed by Amit Jain, Suspended Director of the CD praying for setting aside the impugned order with other prayers, which we shall notice hereinafter. Company Appeal (AT) (Ins.) No.1314 of 2025 has been filed by Manorialle Social Welfare Society, a Registere....
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....7.04.2024 and Section 7 petition - IB-112(ND)/2025 was filed by the Financial Creditor on 31.01.2025 praying for initiation of CIRP against the CD for a default of Rs.256,48,85,907/-. (iii) In Section 7 petition, the Adjudicating Authority on 21.02.2025 issued notice to the CD. After the issuance of aforesaid notice, Section 7 petition could be taken by the Adjudicating Authority on 13.06.2025 and on the request made by counsel appearing for the CD, one week's time was granted for filing the reply. The CD filed a short reply on 17.07.2025 raising objection to the maintainability of Section petition. After 13.06.2025, Section 7 petition came to be listed on 18.07.2025 before the Adjudicating Authority. On 18.07.2025, learned Counsel for the CD prayed for time for filing a detailed reply to Section 7 petition. The Adjudicating Authority did not accept the request of the CD to grant further time to file a reply to Section 7 petition and by order passed on the same date i.e. 18.07.2025, after granting liberty to the parties to file written submissions, restricting the arguments advanced by learned Counsel appearing for the parties, reserved the order. The written submission wa....
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....There are more than eight projects of the CD. It is submitted that under the Debenture Trust Deed dated 10.12.2020, by which the CD had obtained NCD from Debenture Holder, it was confined to the project Mahagun Manorialle and default has been committed in the said project only. Other projects, which have different lenders, including Aditya Birla Capital Ltd., the commitments are being fulfilled and lenders are being serviced to their loans granted to the CD. Initiation of CIRP against all the projects will cause immense hardship to the homebuyers. There are more than 11,000 homebuyers in different projects. It is submitted that present is a case where the CD could not file a detailed reply and could not make submissions except submission made on the maintainability of the application. However, the Adjudicating Authority rejecting the prayer for grant of time, reserved the order and passed order of admission. Even on the date when order was pronounced, it was pointed out to the Court that an application has been filed on 04.08.2025 praying for postponement of two weeks' to enable the CD to settle with the Financial Creditor and further it was also pointed out that various projects a....
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.... Learned Counsel for the Appellant appearing in Company Appeal (AT) (Ins.) No.1314 of 2025 submitted that the Appeal has been filed by Manorialle Social Welfare Society, which Society consists of 194 homebuyers of the project Mahagun Manorialle situated in Sector 128 Noida. It is submitted that initiation of CIRP vide order dated 05.08.2025 is contrary to the very objective of the Code and against the settled judicial precedents of the Hon'ble Supreme Court in Indiabulls Asset Reconstruction Co. Ltd. v. Ram Kishore Arora & Ors. - (2023) SCC OnLine SC 612. It is submitted that there are other projects of CD, which were distinct in terms of financing and no defaults existing for lenders of those projects. It is submitted that CIRP Regulation itself contemplates separate bank accounts, project-wise resolution plans. It is submitted that the impugned order frustrates the legitimate interest of homebuyers and their expectation of timely possession. It is also pleaded that lending by IDBI Trusteeship Services Ltd. was only with respect to project Mahagun Manorialle and there being default in one project, the CIRP needs to be confined to only the project Mahagun Manorialle. The Appellant ....
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....ny Petition (IB)/112/(ND)2025 in the matter of M/s Aditya Birla Capital Limited Vs. IDBI Trusteeship Services Limited. (b) Direct the Hon'ble National Company Law Tribunal, New Delhi to decide afresh the Intervention Application No. 53 of 2025 in Company Petition (IB)/112/(ND)2025 in the matter of M/s Aditya Birla Capital Limited Vs. IDBI Trusteeship Services Limited. (c) Pass any such order as this Hon'ble Tribunal may deem fit and proper in the interest of justice. and in Company Appeal (AT) (Ins.) No.1258 of 2025 the Appellant has prayed for following reliefs: "(a) Allow the present appeal and direct that the CIRP, if at all maintainable, be limited strictly to the defaulting project(s) which form the subject matter of default under the Company Petition filed by Respondent No. 1; (b) Issue appropriate directions to the Resolution Professional and CoC to exclude from the scope of CIRP and moratorium those assets and projects of the Corporate Debtor which are performing, income-generating and secured in favour of the Appellant and in respect of which no default has occurred; (c) Grant interim relief(s), if necessary, staying ....
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....ellant that, as per information given in the present appeal, in addition to present project i.e., Mahagun Manorialle Project, Corporate Debtor also has following completed projects within its domain:- i) Mahagun Mywood - a residential project in which 6155 family are residing/have purchased flats; ii) Mahagun Montage - a residential project in which 836 family are residing/have purchased flats; iii) Mahagun Mascot - a residential project in which 1590 family are residing/ have purchased flats; iv) Mahagun Metro Mall - a commercial property built on 4,55,000 sq feet of land having multiple owners; and; v) Mahagun Sarovar Portico Suuits and Hotel Vaishali 23. That each of the aforesaid projects has distinct ownership and a separate set of lenders. The Applicant has been informed by the Corporate Debtor that there is no default in respect of the lenders who have extended credit facilities to Corporate Debtor against the security of any or all the above projects. It is, therefore, submitted that if, during the CIRP proceedings pursuant to the Impugned Order dated 05.08.2025, these unrelated projects are also brought within the ambit....
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....dmission Order, in abeyance, till December 15, 2025 or till such time that the fourth tranche payment is made as per Settlement Agreement, whichever is earlier; c) In alternative to prayer (b), pass an order to keep the Admission Order dated August 5, 2025 passed by the Ld. Adjudicating Authority in abeyance including all consequential proceedings emanating therefrom for a period of 2 (two) weeks to enable IDBI Trusteeship Services Private Limited/Financial Creditor to cause filing of an appropriate application under section 12A of the Insolvency and Bankruptcy Code, 2016 before the Ld. Adjudicating Authority seeking withdrawal of CIRP proceedings; d) This Hon'ble Appellate Tribunal be pleased to pass an order/orders to protect the interests of the Applicants in light of the submissions made hereinabove; e) Such further order(s) or direction(s) or relief(s) which this Hon'ble Tribunal may deem fit and proper in the circumstances of the present case, in the interest and furtherance of justice;" 13. IA No.5133 of 2025 - This IA has been filed by Manorialle Social Welfare Society seeking a direction that copy of IA No.4984 of 2025 jointly filed by....
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....ayed for impleadment in the Appeal. 16. IA No.6030 of 2025 - This IA has been filed by Jethmal Mehta and 07 Ors. The Applicants are allottees of project Mahagun Manorialle. It is pleaded that payment is almost complete. The Applicants pray for setting aside the order dated 05.08.2025 and made following prayer in the application: "a. Allow this intervention application and implead the Applicants as interveners in Company Appeal No. 1186 of 2025. AND b. Pass and order for setting aside order dated 05.08.25 passed by the NCLT, New Delhi-III in CP IB- C.P. (IB) No.112 (ND 2025) AND/OR c. Pass and order to confine the scope of the Corporate Insolvency Resolution Process to the said project- 'Mahagun Manorialle' located at Sector 128 of Noida alone only; and allow the Respondent and Financial Creditor to file joint application for settlement before NCLT as per the provisions of law. d. Pass any further order(s) deemed fit in the interests of justice and equity." 17. IA No.6031 of 2025 - This application has been filed by Mohsin Khan and Ors. (three homebuyers), who claimed to be allottees of project Mahagun Montage. The Applicants also pray to se....
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....rotect their rights, they have filed the application to intervene in the proceeding. The Applicants' case is that to protect their interest CIRP needs to be continued. 20. IA No.6304 of 2025 - This application has been filed by Krishan Chand Shukla. The Applicant highlights the delay in handing over the possession of the units to the respective homebuyers with respect to township named "Crossings Republik", which came to be promoted by Mahagun (India) Pvt. Ltd. It is pleaded that claims have been filed in the CIRP of the CD. The Applicant seeks liberty to intervene in the proceedings to protect the interest of the homebuyers. 21. The details of various Applicants and the prayers made in their application as noted above clearly indicate that applications have been filed by the homebuyers, who belong to Mahagun Manorialle project and other projects of the CD. With respect to Mahagun Manorialle project, the homebuyers of the said project have prayed for setting aside the admission order by filing an Appeal through Manorialle Social Welfare Society and some of the homebuyers have filed the applications praying for confining the CIRP only to the current project. Homebuyers with re....
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.... Order reserved." 24. After 18.07.2025, the CD filed written submissions dated 30.07.2025, which is brought on the record, wherein apart from submissions made on non-maintainability of the petition, impact on other projects and secured lenders/ allottees were raised. Paragraphs 14 to 20 of the written submission are as follows: "14. It is submitted that the debenture trust deed dated 10.12.2020 was executed between the Financial Creditor & Corporate Debtor with respect to only the project Mahagun Manorial situated at sector 128 Noida. It is pertinent to mention here that there are other projects like 'Mahagun Mywoods' having around more than 6000 customers situated at GH-04, Sector-16C, Greater Noida, 'Mahagun Montage' having around 800 customers situated at Crossing Republic Dundahera, Ghaziabad, 'Mahagun Metro Mall' at Plot no VC-03, Vaishali, Ghaziabad, 'Mahagun Corporate Office' at A-19, Sector-63, Noida, which are constructed /being constructed/ maintained by Corporate Debtor i.e., Mahagun India Private Limited and apart from IDBI Trusteeship Services Limited there are other secured lenders namely HDFC Bank Limited, Aditya Birla....
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....nged. The Tribunal explicitly affirmed that "CIRP can be confined to one project in a Real Estate Company where the interest of homebuyers is also required to be fulfilled and liabilities of the Financial Creditors are to be met". This view was supported by precedents such as Flat Buyers Association Winter Hills - 77, Gurgaon Vs. Umang Rea/tech Pvt. Ltd. [(2020) SCC Online NCLAT 1199], Dharmesh S Jain Vs. SREI Equipment Finance Limited (Company Appeal (AT) (Ins) No. 697/2022), and Supertecli Limited VS. Union Bank of India and Anr. (Company Appeal (Ins) No. 406/2022). Most recently, in Navin M. Raheja v. Vipul Jain & Ors., Company Appeal (AT) (Insolvency) No. 2168 of 2024, the NCLAT Principal Bench again ordered that "for the time being as was prayed by the Applicant/Respondent herein, the insolvency may convene to one Project namely Raheja Shilas (Low Rise)". The IRP was directed to collate claims specifically for this project and work towards its completion and obtaining Occupancy Certificate. 19. Without prejudice to our contentions, it is most Humbly and respectfully submitted that the corporate debtor is trying to settle the matter with financial creditor ami....
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....me Buyers of other projects who are ec1gerly waiting for possession of their dream Flat. The other projects of Mahagun India Pvt Ltd should not be hindered and be allowed to be continued as ongoing projects. 8. That granting a two week postponement of judgment will allow the corporate debtor to complete the settlement process and avoid the need for a judgment in aforesaid company petition bearing no. (IB) NO. 112 OF 2025. 9. That no prejudice shall be caused to the financial creditor in case this Hon'ble Tribunal defers the pronouncement of final Judgment/ Order for next two weeks. 10. That the present application is filed bona fide and in the interest of justice. 11. In view of the above, it is most humbly and respectfully prayed that this Hon'ble Tribunal may kindly be pleased to defer the pronouncement of final judgment/orqer for next two weeks otherwise the corporate debtor, allottees & secured lender shall suffer irreparable loss and injury." 26. The above application was not listed on 04.08.2025, nor could be listed on 05.08.2025, when the judgment was delivered. 27. We also notice that Aditya Birla Capital Ltd. has also filed....
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.... violating the principles of natural justice. Mahagun (India) Private Limited Name of Project No. of Allottees Project Status Mahagun Manorialle 314 Super Structure Complete, Service & Finishing work going on Mahagun Mywoods Phase 2 2559 Part of the project under final construction & Finishing registry/ final possession is pending Mahagun Mywoods Phase 1 3596 Completed and handed over Mahagun Montage 836 Group Housing Project, Under Construction Mahagun Mascot Phase 1 1136 Completed and handed over Mahagun Mascot Phase 2 254 Pending under legal dispute Mahagun Metro Mall, Vaishali Commercial Project Completed and operational since 2010. Facility Services look after by the company. Mahagun Sarovar Portico Suites & Hotel Vaishali Completed and Operational since 2012" 30. The sequence of the events as noted above makes it clear that although one week's time was allowed to the CD to file a reply, but reply could not be filed and only short reply was filed, which also was not on record. The Adjudicating Authority rejected the prayer of the CD for any further time, when the matter was nex....
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.... collective mechanism intended to revive viable projects and safeguard the fundamental right to shelter of genuine homebuyers." 35. The Hon'ble Supreme Court has further dealt the subject "Right to shelter as a fundamental right: constitutional obligation of the state to protect homebuyers" and after considering the several aspects of the project, conclusions were recorded. The Hon'ble Supreme Court emphasized that IBC is a remedial framework conceived for revival and the protection of sick companies. In paragraph 21, the Hon'ble Supreme Court held following: "21. This Court reiterates that while investors are integral to any industry and their interests warrant protection, speculative participants driven purely by profit motives cannot be permitted to misuse the Insolvency and Bankruptcy Code, which is a remedial framework conceived for revival and the protection of sick companies and, in the case of real estate, genuine homebuyers. Such investors have alternative remedies under consumer law or RERA and even recourse to Civil Courts in appropriate cases. To admit speculative claims into insolvency proceedings would dilute the intelligible differentia underlying the leg....
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....al principles for exercise of discretion, as discussed hereinbefore, a few features specific to the matters of interim relief need special mention. It is rather elementary that in the matters of grant of interim relief, satisfaction of the Court only about existence of prima facie case in favour of the suitor is not enough. The other elements i.e., balance of convenience and likelihood of irreparable injury, are not of empty formality and carry their own relevance; and while exercising its discretion in the matter of interim relief and adopting a particular course, the Court needs to weigh the risk of injustice, if ultimately the decision of main matter runs counter to the course being adopted at the time of granting or refusing the interim relief. We may usefully refer to the relevant principle stated in the decision of Chancery Division in Films Rover International Ltd. v. Cannon Film Sales Ltd. : (1986) 3 All ER 772 as under:- "....The principal dilemma about the grant of interlocutory injunctions, whether prohibitory or mandatory, is that there is by definition a risk that the court may make the "wrong" decision, in the sense of granting an injunction to a party who fa....
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....nd exercise of a judicial discretion." (emphasis in bold supplied) 196. In keeping with the principles aforesaid, one of the simple questions to be adverted to at the threshold stage in the present cases was, as to whether the importers (writ petitioners) were likely to suffer irreparable injury in case the interim relief was denied and they were to ultimately succeed in the writ petitions. A direct answer to this question would have made it clear that their injury, if at all, would have been of some amount of loss of profit, which could always be measured in monetary terms and, usually, cannot be regarded as an irreparable one. Another simple but pertinent question would have been concerning the element of balance of convenience; and a simple answer to the same would have further shown that the inconvenience which the importers were going to suffer because of the notifications in question was far lesser than the inconvenience which the appellants were going to suffer (with ultimate impact on national interest) in case operation of the notifications was stayed and thereby, the markets of India were allowed to be flooded with excessive quantity of the said imported peas/....
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.... record in these Appeal(s), the said facts cannot be ignored and the fact that the CD is carrying on various projects apart from Mahagun Manorialle, is on the record and need to be taken note of. 41. We by our order dated 02.09.2025, permitted the Appellant to file Status Report with record of all projects, which are with the CD. In paragraph-4 of the order dated 02.09.2025, we observed as follows: "4. Appellant is also permitted to file a status report with respect to all project which are with the Corporate Debtor giving the present status and all the relevant facts including the lending." 42. In pursuance of the above order dated 02.09.2025, Status Report dated 04.10.2025 has been filed by the Appellant, which Status Report is being part of Annexure P/2 to the additional affidavit of the Appellant dated 04.10.2025. At page-12 of the affidavit under the heading "Status of the Projects of the Corporate Debtor", following has been stated: "STATUS OF THE PROJECTS OF THE CORPORATE DEBTOR Given below is the list of Projects already completed by the Corporate Debtor Area & Projects Delivered: 11.48 million sq ft area already delivered comprisin....
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....re resolution of real-estate insolvency should, as a result, proceed on a project-specific basis and all relevant material with regard to other project and its status as well as different intervention applications filed by homebuyers of different projects have been brought on record, we are of the view that Adjudicating Authority is required to advert to these facts and law laid down by the Hon'ble Supreme Court in Mansi Brar Fernandes and has to advert to the question as to whether the CIRP should be confined to the current project or encompass all the projects. 46. We have also noticed above that IAs filed by different sets of homebuyers with respect to other projects of the CD, have made different prayers. In some of the IAs, the Applicant prayed that admission order be set aside, whereas in some IAs they prayed that CIRP be continued. One set of group prayed that CIRP be confined to only project Mahagun Manorialle. 47. In view of the above, we are of the view that Adjudicating Authority needs to consider Section 7 petition afresh, taking into consideration the directions issued by the Hon'ble Supreme Court in Mansi Brar Fernandes (supra) as well as Status Report, which ha....