TaxTMI 
TaxTMI 
2026 (1) TMI 661
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....sp;Mr. Abhishek Anand, Mr. Karan Kohli, Advocates for RP., Mr. Ashim Vachher, Sr. Advocate with Ms. Saiba M. Rajpal and Mr. Vinayak Uniyal Advocates for I.A. 2251 & 3556 of 2025, Mr. Arijit Prasad, Sr. Advocate with Mr. Ritesh Agrawal, Ms. Ankita Singh, Mr. Argh B. Sharma, Mr. Deepak Kumar and Ms. Priyanshi Sharma, Advocates for UP Awas, Mr. Karamveer and Mr. Kumar Abhishek, Advocates for I.A. 2252 of 2025 Homebuyers, Mr. Thakur Ankit Singh, Advocate for IA No. 2555 of 2025 & 2993 of 2025, Mr. Thakur Ankit Singh, Advocate for I.A. 2993 of 2025, Mr. Anshul Sharma, Advocates for Homebuyers in I.A. 3001 of 2025, Mr. Sunil Fernandes, Sr. Advocate with Mr. Spandan Biswal, Mr. Kaustubh Rai and Mr. Shivendra Pandey, Advocates for I.A. No. 4193 of 2025, Mr. A. K. Tewari, Mr. Rahul Burmani and Adv. Yosha Dutt, Advocates for I.A. No. 5887 & 5888 of 2025. JUDGMENT ASHOK BHUSHAN, J. These two Appeal(s) have been filed against the order dated 25.02.2025 passed by NCLT, New Delhi, Court-IV admitting Section 7 application filed by M/s IL&FS Financial Services Ltd. ("IL&FS"), the Financial Creditor (Respondent No.1 herein). Company Appeal (AT) (Ins.....
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.... land which vests with the Gram Sabha was also required to be resumed by following the prescribed procedures. One of the Clauses under the MoU was to ensure timely completion of Project as per the provisions of the approved DPR, the LDA shall retain transferable rights of 25% of total saleable land, which shall be released in proportion to the second party on successful completion of various services to the functional stage. If the second party leaves any development work incomplete, the same shall be completed by the LDA through sale of the land so retained. (iii) A Development Agreement dated 18.11.2006 was entered between the CD and LDA, where the CD was to develop a Hi- Tech Township in an area of 1765 acres. As per the Master Plan of Lucknow Development, Agreement contained one Clause-8 regarding Performance Guarantee, which reads as follows: "8. Performance Guarantee To ensure timely completion of the project as per the provisions of approved DPR, the First Party shall retain the transferable rights on 25 percent of total saleable land, which shall be released in proportion to the Second Party! on successful completion of various services to the functional s....
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....-Tech Technology in different phases approved and was sanctioned including the necessary Plans. Several Projects were launched by the CD in the State of UP and other States. One of the Hi-Tech Township Project at Lucknow was Sushant Golf City, Lucknow over an area of 4,465 acres. Different Projects were registered under the UP RERA at Lucknow, which Projects commenced and under the various Projects at Lucknow, the CD allotted units, both residential and commercial to large number of unit holders. (vii) Similarly in the State of UP, under the Hi-Tech Township/ Integrated Township, Policy in other cities of State, MoU and Development Agreements were executed between CD and respective Development Authorities. (viii) The CD approached the IL&FS Financial Services Ltd., the Financial Creditor for sanction of Rupee Term Facility of Rs. 500 million. The CD was also proposed PMDO Facility (Pooled Municipal Debt Obligation) of Rs. 3210 million and Rs. 3930 million funding facilities towards development of infrastructure at Lucknow Township. IL&FS Financial Services sanctioned Term Loan Facility of Rs. 500 million by a letter dated 16.02.2016 and terms and conditions for Te....
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....en paid by the CD. (xii) On 06.08.2024, IL&FS filed Section 7 application being CP(IB) No.558/2024 claiming default of Rs. 2,574,312,692/-. Notices were issued in Section 7 application. The CD filed its reply. Several Interventions Petitions were also filed in Section 7 application. One of the Intervention Petition was filed by Gagan Tandon and other Homebuyers of Sushant Golf City Project, seeking intervention. Several other Intervention Petitions were filed by different parties, including Financial Creditors. (xiii) Adjudicating Authority heard the parties and passed an order on 25.02.2025 admitted Section 7 application filed by the IL&FS. The Adjudicating Authority held that CD having not denied that it owns a substantial debt to the Applicant and the CD has only disputed the quantum of default as claimed in Section 7 application and has pleaded that amount overdue is only Rs. 83 crores. The Adjudicating Authority held that quantum does not affect the application admissibility. The Adjudicating Authority has held that the CD having admitted the existence of the debt and the default, and the default amount exceeds the statutory threshold of Rs. 1 crore, the appl....
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....f the applicant being a necessary party whose rights have been severely prejudiced by the order dated 25.02.2025 passed by the Hon'ble NCLT without impleading the applicant; and/or (b) Pleased to set aside the order dated 25.02.2025 passed in CP No. IB 558(ND)/2024 passed by the Hon'ble National Company Law Tribunal, New Delhi; and/or (c) Remand the matter back to the Hon'ble NCLT to pass appropriate orders after hearing and impleading the necessary and affected parties i.e. L.D.A. in the present application; and/or (d) Stay the proceedings before the Ld. IRP till the disposal of the present application; and/or (e) Pass any other or further order of any nature, direction as this Hon'ble Tribunal may deem fit and proper in the facts and circumstances of the present case and in the interest of justice." 7. LDA's case in the application is that as per the Hi-Tech Township Scheme of the State of UP, an MoU was entered with LDA and the Ansal Properties and Infrastructure Limited for development of 1765 acres of land on Lucknow Sultanpur Road for Hi-Tech Township. In furtherance of which a Development Agreement was also executed between the part....
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.....2004 for development of Hi-Tech Township was executed between M/s. Uttam Galva Steels Ltd. and M/s Ansal Properties & Industries Ltd. for development of Hi-Tech Township. A MoU was signed between BKDA and M/s Uttam Steel & Associates Consortium and a Development Agreement was signed on 07.07.2008 for development of 5.22 acres of land. There was Performance Guarantee wherein 25% of the saleable land has to be kept as mortgaged. Development Agreement-2 was executed and a Security Bond was also executed. BKDA by letter dated 29.04.2023 sent reminder to pay outstanding amount of more than Rs. 211 crores. It is submitted that development of Hi-Tech Township Project named - Dadri Project Scheme, Bulandshahr Khurja is different district from the Lucknow Project developed by the CD. Various FIRs have been lodged by the Applicant and the Homebuyers against the CD. The entire proceedings of the CD is vitiated since CD deliberately connived in initiation of insolvency proceedings to overcome the various statutory/ legal proceedings initiated against them in various Fora. The CD is using the present proceedings to avoid payment of legitimate dues of Government Authorities and defrauding the g....
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.... between the LDA and the CD. The initiation of CIRP will jeopardize the real estate project and cause irreparable loss and injury to thousands of Homebuyers. The Applicant refers to different Clauses of the MoU. It is pleaded that Section 7 application has been filed only for the debt of Rs. 83 crores and the creditors are misusing the provisions of IBC as a money recovery tool rather than seeking a resolution process. The debt of Rs. 83 crores is negligible compared to the only Lucknow project, which valuation is more than Rs. 26,000 crores, which comprises of public funds. The continuation of CIRP will jeopardize registries and the rights of the Applicant. It is pleaded that in Company Petition No. (IB)-297(ND)/2023 in Indian Bank vs. Ansal Properties & Infrastructure Ltd., the NCLT has confined the CIRP to "Serene Residency Group Housing Project" at Sector ETA II, Greater Noida and did not extend it to the entire company. The Applicant seeks intervention and prays that impugned order dated 25.02.2025 be set aside and LDA be directed to take over all the Projects and the land of Sushant Golf City as per MoU, which is under UP Hi-Tech Township Policy 2003 and to ensure that all th....
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....itted by the NCLT on 20.10.2023 qua "Serene Residency" Project of the CD. The Applicant seeks intervention and prays that Appeal No.502 of 2025 be dismissed. 13. IA No.2993 of 2025 : This IA has been filed by Apexstar Infracon Pvt. Ltd. and four others, who claim to have been invested money in several properties of the CD. Reference to various FIRs against the Promoter have also been made. Actions taken by Uttar Pradesh Real Estate Regulatory Authority against the CD and its Promoters have also been highlighted. The Applicant prays that Appeal be dismissed. 14. IA No.3001 of 2025: This IA has been filed by Rakesh Pandey and 26 others, who claim to be Homebuyers and have paid substantial amount to the CD, who claim to be aggrieved by the order dated 25.02.2025, initiating the CRIP and have sought intervention. 15. IA No.4193 of 2025: This IA has been filed by Raavee Buildcon Pvt. Ltd. and two others. The Applicant has filed this application to safeguard its rights and obligations with respect to Sushant Taj City Project in Agra, UP. It claims to be co-developer along with the CD. The Applicant claim to have made efforts and paid substantial amount, and the Project has been ....
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.... in the application is that 74.876 acres land situated at Sultanpur Road in land Development and Housing Scheme (Awadh Vihar Scheme) at Sector-7B, Village Barauna, Lucknow, which was utilized in favour of the CD, for which land the CD was required to make payment to the UPAEVA, as per the rate agreed between the parties and amount payable by M/s Ansal was convered into installments. The UPAEVP in is 236th Board Meeting held on 31.05.2016 decided that registered mortgage deed shall be executed from M/s Ansal only towards the amount payable by them from the land owned by them. Under the 239th Board meeting held on 21.10.2016, a proposal was passed about excluding the 74.876 acres of land situated a village Baruna from the Hi- Tech Township Project. In continuation of which Gazatte Notification dated 03.12.2016 was published. A mortgage deed between the UPAEVP and the CD was executed on 28.06.2019 with respect to certain areas of land included in 74.876 acres of land of which only 24.638 is part of Hi- Tech Township (Sushant Golf City). The Demand Letter was issued by the UPAEVP to the CD. The CD deposited certain amount, but substantial amount is still due, for which the Deputy Housi....
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....ottees. It is pleaded that CIRP proceedings will defeat the very objective of the RERA Act and this Tribunal may modify the order dated 25.02.2025 and quash the initiation of CIRP. 22. We have heard learned counsel Mr. M.P. Sahay appearing for the appellant in Comp. App. (AT) (Ins.) No. 500/2025 and learned counsel Ms. Neeha Nagpal appearing for the appellant in Comp. App. (AT) (Ins.) No. 502/2025 as well as learned Sr. counsel Mr. Gopal Jain appearing for IL&FS. We have also heard learned counsel for the intervenors including learned counsels appearing for different Development Authorities. 23. The submission of learned counsel for the appellant in Comp. App. (AT) (Ins.) No. 500/2025, hereinafter referred to as submissions on behalf of the appellants - homebuyers. It is submitted that adjudicating authority committed error in initiating CIRP against the corporate debtor. Initiation of CIRP will jeopardise and prejudice the Real Estate Projects and cause irreparable loss, harm and injury to thousands of homebuyers. Real Estate Project was floated under the policies of Government of Uttar Pradesh, where corporate debtor is a licence holder authorised to construct and developed....
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....ebtor is financially stable and solvent company, it has substantial receivables from its various projects across India, including Mother City, Lucknow, which receivables are multiple times than the amount of alleged debt, given available resources, there is no justification for initiating CIRP against the corporate debtor. Corporate debtor has settled huge chunk of allottees/customers of its project situated throughout India. In Lucknow, corporate debtor has settled its customers amounting to about Rs. 126 crore. Corporate debtor has executed total of 3,306 Sale Deeds in favour of the allottees. The default by the corporate debtor is only with respect to the Project "Mother City, Lucknow". The project in default and CIRP initiated against the corporate debtor should be limited to the project in default only. Adjudicating authority failed to appreciate that if the distress or default is limited to one Project "Mother City, Lucknow", CIRP should be limited to that project alone. Adjudicating authority committed an error in admitting Section 7 application despite the fact that the corporate debtor had shown bona fide intent to repay and has already repaid Rs. 28.36 crores under the Re....
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....ed to the corporate debtor by the state and the LDA. The corporate debtor committed error in entering into Rupee Loan Agreement with IL&FS in the year 2016, where all relevant clauses of MoU and the Development Agreement were concealed. It is submitted by the learned counsel for the LDA that Section 7 proceedings have been fraudulently initiated to harm the interest of all stakeholders. The corporate debtor was fully capable to discharge the amount of Rs. 83 crore which was due as per Settlement between the IL&FS and the corporate debtor. Large number of First Information Reports were lodged against the corporate debtor and its Director and corporate debtor in connivance with IL&FS initiated proceedings to save itself from its obligation to complete the project and pay dues of LDA and other stakeholders. Learned counsel for the LDA submits that in the facts of the present case, LDA was also necessary party to the proceeding and ought to have been heard before taking a decision to initiate CIRP against the corporate debtor. It is submitted that as abundant caution, LDA has also filed its claim in the CIRP. Dues of the LDA are more than Rs. 4,490 crore. The corporate debtor has been ....
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....cially affected. Adjudicating authority ought to have been heard development authority as necessary party before passing the order on 25.02.2025 since the impact ramification of the impugned order has much wider implication to the public authorities/ public money and affects and the confidence of the allottees in various projects being developed under the High-Tech/Integrated Township policy for the state of Uttar Pradesh. Learned counsel for the GDA has also prayed for setting aside the order initiating the CIRP. 28. Learned Sr. counsel Mr. Arijit Prasad appearing for the UP Awas Evam Vikas Parishad also submitted his submission that UP Awas Evam Vikas Parishad has made available the land to the corporate debtor for carrying out development. It is submitted that the Projects of UP Awas Evam Vikas Parishad which was being developed by the corporate debtor be kept out the CIRP process. 29. Several intervention applications have been filed by the homebuyers of Sushant Golf City Projects, Lucknow and homebuyer of other Projects situated in Agra, Mohali, Punjab, which we have noticed as above, the homebuyers in different intervention applications having quite different views. In ....
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....en initiated. 32. Learned counsel for the appellant referring to the reply of the corporate debtor filed in Section 7 application submits that the corporate debtor pleaded in the reply that at best the default is an amount of only Rs. 83 crores. It is submitted that default having been admitted by the corporate debtor, twin test for admission of Section 7 application were clearly fulfilled. Learned counsel for the appellant has relied on the judgment of the Hon'ble Supreme Court in 'Innoventive Industries Limited' Vs. 'ICICI Bank & Anr.' reported in [(2018) 1 SCC 407] and in 'E.S. Krishnamurthy' Vs. 'Bharath Hi-Tecch Builders (P) Ltd.' reported in [(2022) 3 SCC 161] as well as the judgment of the Hon'ble Supreme Court in 'M. Suresh Kumar Reddy' Vs. 'Canara Bank' reported in [(2023) 8 SCC 387]. Learned counsel for the IL&FS submits that the CIRP Regulations, 2016 has been amended under which now the resolution for Real Estate Projects, RP with the concurrence of the Committee was entitled to call for resolution plan project wise. It is submitted that statutory regulation provides for mode and manner of project wise resolution of Real Estate Company and the question of project wis....
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....assed: "22. Intervention Application(s) filed by Development Authorities/UPRERA/ UP Awas Evam Vikas Parishad and the Homebuyers, as noted above are allowed. Intervenors are also allowed two weeks time to file affidavit in support of their case. 23. As noted above, keeping in view the issue pertaining to mode and manner of the resolution of CD and enormity of Projects, which are situated in different cities being involved, we need to hear the parties before issuing any direction with regard to manner in which Resolution of the CD shall proceed as per the provisions of the IBC. At this stage, we issue following directions: (1) Lucknow Development Authority and other Development Authorities are given liberty to file an Application with regard to categorisation of their claims before the Adjudicating Authority, which may be considered and decided at an early date by the Adjudicating Authority. (2) The IRP/ RP shall proceed to collate and verify the claims of Creditors in accordance with the CIRP Regulations, 2016. Till the next date of hearing, CIRP may go on, however, no Form-G shall be issued in the CIRP of the CD. Parties may com....
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....by counsel for the parties and intervenors reflects large scale projects of the corporate debtor spread over different states of the country. In the state of Uttar Pradesh itself several High-Tech Township/Integrated Township Projects have been launched with corporate debtor as developer. In the different project spread over several states, thousands of allottees are involved. The appeals before us raise complex questions which arise in resolution of Real Estate Projects. 38. Learned counsel for the parties have also relied on various judgments of the Hon'ble Supreme Court and this Tribunal, where mechanism for resolution of Real Estate Project was laid down. 39. From the materials on the record and submissions advanced by the counsel for the parties, following are the issues which arose for consideration in the present appeals: I. Whether the IL&FS has brought sufficient materials to prove that corporate debtor has committed default in payment to debt due in respect of Loan Agreements dated 18.03.20216 and 25.11.2016 and there was sufficient ground to initiate CIRP against the corporate debtor? II. What are the purpose and extent of two loans and securities....
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....e entire amount of Rs. 2,574,312,692/-. Due to non-payment of the amount demanded, Section 7 application was filed on 06.08.2024. In Part-IV of Section 7 application, Financial Creditor has given details of its facilities, Sanctioned Letter dated 16.02.2016 and a subsequent Sanction Letter dated 26.10.2016 and the Agreements entered thereon. Part-IV of Section 7 application is as follows: "Part-IV Particulars of Financial Debt 1. Total amount of Debt granted date(s) of Disbursement The Applicant has granted a total sum of Rs. 150,00,00,000/- (Rupees One Hundred and Fifty Crores) ("Entire Loan Amount") to the Corporate Debtor on the dates and in the manner as detailed out in Annexure- A- 4. The details of the transactions pursuant to which the said amounts were disbursed are as follows: A. Facility I: a. Pursuant to the request of the Corporate Debtor towards inter alia, requirement of funds for the development of a project (residential and commercial) at Lucknow ("Project"), the Applicant granted a term loan facility of upto Rs. 50,00,00,000/- (Rupees Fifty Crores only) ("Facility I") vide its Offer / Sanction Letter bearing no. D/ OTL/16/89 dated February 1....
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....he heading A to FF. The Settlement Agreement entered between the partis on 03.03.2022 had also approval of the NCLT, Mumbai vide its order dated 14.10.2022. In Section 7 application, notices were issued by the Adjudicating Authority and reply has been filed by the CD, which reply has been brought on the record of the Company Appeal (AT) (Ins.) No.502 of 2025. In the reply, which was filed to Section 7 application, the CD has not disputed the default, which has been committed by the CD in repayment of the loan. In Paragraph 5 of the reply, the CD pleaded that amount outstanding is only Rs. 83 crores as per revised settlement amount. Paragraph 5 of the reply is as follows: "5. The alleged default, as claimed by the Applicant, is Rs. 257.43 crores. The Applicant is not entitled to the alleged debt claimed to be in default. The alleged default does not reflect the true situation as the Respondent had entered into a Settlement Agreement dated 03.03.2022 with the Applicant, which was subsequently amended by Applicant's Letter dated 22.11.2023, whereby the Applicant sanctioned Rs. 111.36 crores ("Revised Settlement Amount") as the settled amount. The Respondent has already re....
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....ty is to be satisfied that a default has occurred, that the corporate debtor is entitled to point out that a default has not occurred in the sense that the "debt", which may also include a disputed claim, is not due. A debt may not be due if it is not payable in law or in fact. The moment the adjudicating authority is satisfied that a default has occurred, the application must be admitted unless it is incomplete, in which case it may give notice to the applicant to rectify the defect within 7 days of receipt of a notice from the adjudicating authority. Under sub-section (7), the adjudicating authority shall then communicate the order passed to the financial creditor and corporate debtor within 7 days of admission or rejection of such application, as the case may be." 44. The next judgment to be noticed is the judgment of the Hon'ble Supreme Court in E.S. Krishnamurthy and Ors. vs. Bharath Hi-Tech Builders Pvt. Ltd. - (2022) 3 SCC 161, where the Hon'ble Supreme Court held that the Adjudicating Authority is empowered only to verify whether default has occurred or if a default has not occurred and based on which decision, the Adjudicating Authority must either admit or reject the a....
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....er Ltd. v. Axis Bank Ltd., (2022) 8 SCC 352 : (2022) 4 SCC (Civ) 329] was in the setting of facts of the case before this Court. Hence, the decision in Vidarbha Industries [Vidarbha Industries Power Ltd. v. Axis Bank Ltd., (2022) 8 SCC 352 : (2022) 4 SCC (Civ) 329] cannot be read and understood as taking a view which is contrary to the view taken in Innoventive Industries [Innoventive Industries Ltd. v. ICICI Bank, (2018) 1 SCC 407 : (2018) 1 SCC (Civ) 356] and E.S. Krishnamurthy [E.S. Krishnamurthy v. Bharath Hi-Tecch Builders (P) Ltd., (2022) 3 SCC 161 : (2022) 2 SCC (Civ) 129] . The view taken in Innoventive Industries [Innoventive Industries Ltd. v. ICICI Bank, (2018) 1 SCC 407 : (2018) 1 SCC (Civ) 356] still holds good." 46. In the reply, which was filed by the CD before the Adjudicating Authority, the CD placed reliance on judgment of the Hon'ble Supreme Court in Vidarbha Industries Power Ltd. vs. Axis Bank Ltd. - (2022) 8 SCC 352, in which case the Hon'ble Supreme Court was of the view that in the facts of the said case, where CD was possessed with decree in arbitration of decretal amount, which was more than the debt and default, it held that initiation of CIRP in such c....
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....nt locations of the country, what would be the manner and procedure for conducting the CIRP against the CD, shall be considered and examined by us in foregoing paragraphs of this judgment. 49. In view of the aforesaid, we answer Question No.I to following effect: The IL&FS (Financial Creditor) has brought sufficient material to prove that the CD has committed default in payment of its debt, due in respect of Loan Agreements dated 18.03.2016 and 25.11.2016 and there was sufficient ground to initiate CIRP against the CD. Question No.II 50. By virtue of order dated 01.07.2025 in these Appeal(s), the CD has filed an additional affidavit dated 04.07.2025 in Company Appeal (AT) (Ins.) No.502 of 2025 bringing on record project-wise report regarding the Projects undertaken by the CD from the year 2000. Annexure A-1 contains project wise report and details of 93 projects registered with UP RERA, which Annexure A-1 is appended as Schedule-1 to this judgment. Schedule-1 of the Annexure A-1, captures the extent of various projects, which have been undertaken by the CD in different States of this country and number of projects, which are being taken at mother City at Lucknow. ....
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.... (3) When the Financial Creditor is a Financial Institution and it has extended facilities to the CD and has taken security from the CD for ensuring repayment of the loan, which security may include one or more projects of the CD, whether the CIRP should confine only to the projects and assets of the CD, which are part of the securities mentioned in the Loan Agreement. (4) When a CIRP against one project is being undertaken, whether the CoC should confine to the claims with respect to the said project only or it should extend to claims in various other projects. 54. For answering some of the issues, which arose with respect to insolvency resolution of the real estate project, we first need to notice the Rupee Term Loan Facilities, which were the basis for initiation of Section 7 application by the CD. Part-IV of Section 7 application refers to two Facilities. Facility-I of Rs. 50 crores and Facility-II of Rs. 100 crores and total amount claimed is Rs. 257,43,12,692. We have also extracted the relevant portions of Part-IV in the above part of this judgment. Now we need to notice the details of Facility-I and Facility-II. We also need to notice the securities, which....
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....SI Receivables" shall mean 25% of the Escrow FSI Receivables which shall be forthwith transferred from the FSI Escrow Account into a sub-account of the FSI Escrow Account "Segregated FSI Sub- Account" 56. Clause-10 deals with the 'Purpose of the Facility', which provided that Facility would be utilized for any of the specific purpose as mentioned therein. Clause-10 is as follows: "10. Purpose of the Facility: The funds provided under the Facility would be utilized for any of the below specified purposes: (a) Project Development Expenses in APIL's various under construction real estate projects (b) Long Term Working Capital (c) Extending loan & advance to subsidiaries/ associates including loan & advance to AAIL(PMDO borrower) towards implementation of trunk infrastructure at Lucknow township (Phase II) as envisaged by PMDO pending disbursement of proposed PMDO loan of Rs. 3210 mn (d) General Corporate purposes The Borrower shall provide a Statutory Auditor's Certificate confirming the end-use of funds within 30 days of disbursement(s)." 57. Clause-15 delas with 'Sources of Repayment', which is as follows: "15 Sources of Repayment : ....
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....l bear the common seal of the Borrower duly supported by a resolution of the Board of Directors of the Borrower (g) ECS mandate for Principal & Interest (including PDC for one month interest and Principal)" 59. Along with terms and conditions, Annexure-A was also annexed, which was "Details of Hypothecated Identified Receivables" in two parts, which included residential and commercial assets noted therein. Total balance receivables against CD as contained in Annexure-A is Rs. 564.33 crores. 60. The various terms and conditions in the Loan Agreement being repetition of terms and conditions as noted above, it needs no repetition. 61. Similarly, second Loan Facility dated 26.10.2016 of Rs. 100 crores was issued, which also contained the terms and conditions. Clause 6 of the PMDO Facility is in following manner: 6 PMDO Facility : PMDO I : Rs 3930 mn funding facilities extended by Consortium of Bankers under "Pooled Municipal Debt Obligation" (`PMDO") to Ansal API Infrastructure Ltd ("AAIL") towards development of trunk infrastructure at Mother City, being part of township located at Lucknow ("Mother City, Lucknow") which is being developed pursuant to the terms ....
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....y Extension, Lucknow proposed to be sold/ already sold by APIL to various buyers which are being developed pursuant to the terms of DA wry along with residual cashflows from the said Mother City Extension, Lucknow project, for which part of construction funding is availed from certain other lenders (to be specified by the Borrower in writing with details, who may be excluded upfront by IFIN). A summary of Hypothecated & Escrowed Identified Receivables - Mother City Extension is provided below: Category (Rs.mn) Balance Receivables Total Sold Unsold FSI --Group Housing 1,910 10,400 12,310 --Commercial 120 2,730 2,850 Plots 2,420 4,220 6,640 Villas/Floors 2,430 6,350 8,780 Group Housing 1,680 5,160 6,840 Commercial 30 80 110 Other (Public, recreation, etc.) 90 6,010 6,100 Total 8,690 34,940 43,630 The Borrower shall provide all the details including the basis of assessment of future receivables, name of the scheme/ FSI buyers, approved plan including FSI/ Total Sqft, lenders details, as applicable, to the satis....
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....ted by the Corporate Debtor under the hand of Mr. Ashok Dang and Mr. Kapil Arora. b. the amount of Rs. 100,00,00,000/- (Rupees One Hundred Crores only) with interest at the rate of 17 .5% per annum executed by the Corporate Debtor under the hand of Mr. Ashok Dang and Mr. Kapil Arora. Copies of the above-mentioned Demand Promissory Notes are annexed herewith as Annexure- A-31 (Colly). F. Copies of the certificates of registration of the said charges are annexed herewith as Annexure- A-32 (Colly)" 66. Above pleadings in Part-V Section 7 application mentions in Annexure A-27, first exclusive charge in the form of mortgage by deposit of title deeds and first exclusive charge in the form of hypothecation over receivable generated from various properties as per details given in Annexure-28, and copies of certificates of registration of the charges as per details given in Annexure-32. Section-7 application itself provides details of security and charges created by the parties. 67. It is relevant to notice that a Settlement Agreement was entered between the CD and IL&FS dated 03.03.2022, under which the CD had agreed to make total payment of Rs. 109,66,00,000/- t....
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.... of the CD, a Section 7 application was filed by the allottees of Fernhill Project, on which CIRP commenced against the CD on 16.11.2022, against which order Company Appeal (AT) (Ins.) Nos.41, 65 and 77 of 2023 were filed in this Tribunal. This Tribunal passed an order on 13.01.2023 confining the order of the Adjudicating Authority admitting Section 7 application to 'Fernhill Project' situated at District Gurgaon, which has been noticed in the order dated 04.03.2024 in the above Company Appeal(s). Paragraph 2 of the order dated 04.03.2024 is as follows: "2. These appeals have been filed against the order dated 16.11.2022 passed in Section 7 Application by which on an Application filed by 125 allottees (Financial Creditors), the Adjudicating Authority admitted Section 7 Application. The allottees, who filed the Application, were allottees of one Projects the 'Fernhill Project'. This Tribunal entertained the appeal and passed following interim order dated 13.01.2023: "ORDER 13.01.2023: Learned counsel for the Appellant submits that the Adjudicating Authority had on an application under Section 7 by the allottees of one project Fernhill situated in Section-91, Gur....
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....r Noida, U.P. and that CIRP was also confined to the said Project only, not affecting the other Projects. 74. The above facts indicate that there are two instances with respect to CIRP against the CD, where the CIRP was confined to the respective projects only and the CIRP was not directed to be proceeded with respect to all projects of the CD. 75. We have noticed in detail the securities, which have been provided for in the Loan Agreements between the CD and IL&FS. For the purpose of consideration as to whether the CIRP, which has been initiated by the impugned order dated 25.02.2025 should be confined to the assets which are included in the securities provided by the CD or it should engulf all Projects of the CD, the same shall be considered hereinafter. Question Nos.III to VI All the above questions being inter-related, are being taken together. 76. We have noticed above that on two occasions, where the CIRP commenced against the CD, i.e. Ansal Properties and Infrastructure Ltd., the CIRP was confined to two projects respectively, since the CIRP was initiated by the Financial Creditors in a class relating to concerned projects. We have noticed above the securities....
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....ntext refer to a recent judgment of the Hon'ble Supreme Court in Mansi Brar Fernandes vs. Shubha Sharma and Anr. - Civil Appeal No.3826 of 2020 and other Appeals decided on 12.09.2025. The Hon'ble Supreme Court in the above case was also considering an Appeal arising out of CIRP of a real estate project. In Paragraph 15.2, the Hon'ble Supreme Court has reiterated certain principles, which notices that IBC is a Forum of last resort, intended to secure revival and completion of viable projects, not to serve as a debt recovery mechanism. In Paragraph-15.2, the Hon'ble Supreme Court laid down following: "15.2. In this necessary in this backdrop to reiterate certain settled principles: • RERA remains the primary forum for redressal of homebuyers' grievances; • The IBC is a forum of last resort, intended to secure revival and completion of viable projects, not to serve as a debt recovery mechanism; and • Consumer forums should confine themselves to adjudicating individual service deficiencies, thereby avoiding conflicting or overlapping orders across multiple fora." 78. In paragraph 15.5, the Hon'ble Supreme Court further observed that a....
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....heir family's head is all they desire. The anxiety of not having a home despite paying a fortune is bound to take a serious toll on health, productivity, and dignity. 20.3. It is therefore imperative that the life savings of a common person culminate in timely possession of their promised home. Article 21 would mandate nothing less. In Samatha v. State of A.P.21, this Court reiterated that the right to social and economic justice as well as the right to shelter are fundamental rights encompassed within the ambit of the right to life. Similarly, in Chameli Singh v. State of U.P.22, this Court observed: "Shelter for a human being, therefore, is not a mere protection of his life and limb. It is home where he has opportunities to grow physically, mentally, intellectually and spiritually. Right to shelter, therefore, includes adequate living space, safe and decent structure, clean and decent surroundings, sufficient light, pure air and water, electricity, sanitation and other civic amenities like roads etc. so as to have easy access to his daily avocation. The right to shelter, therefore, does not mean a mere right to a roof over one's head but right to all the infrast....
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....consultation with RERA authorities, shall constitute a council to frame specific guidelines for insolvency proceedings in real estate, including timelines for project-wise CIRP, and safeguards for allottees. (6) Resolution of real estate insolvency should, as a rule, proceed on a project specific basis rather than the entire corporate debtor, unless circumstances justify otherwise. This would protect solvent projects and genuine homebuyers from collateral prejudice. IBBI shall also devise a mechanism to enable handover of possession to willing allottees where substantial units in a project are complete." 81. What Hon'ble Supreme Court has held in the above case is that resolution of real estate insolvency should, as a rule, proceed on a project specific basis rather than the entire CD, unless circumstances justify otherwise. This would protect solvent projects and genuine homebuyers from collateral prejudice. 82. We also need to notice certain provisions of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 ("CIRP Regulations"), which deals with the process for resolution of a CD, with respect to resolutio....
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....he Real Estate (Regulation and Development) Act, 2016 (16 of 2016) related to such project to attend such meeting(s) of the committee, as the committee may decide, without voting rights, for providing inputs on matters associated with the development of such project." 85. The above Regulations, even after amendments as noted above, throw very little light over the complexities and difficulties, which arise in the resolution of the real estate project, undertaken by a real estate Company. There have been several precedence of this Tribunal, where this Tribunal had occasion to consider the resolution of a real estate project. The judgment of this Tribunal in Company Appeal (AT) (Ins.) No. 926 of 2019 - Flat Buyers Association Winter Hills - 77, Gurgaon vs. Umang Realtech Pvt. Ltd. through IRP & Ors. is one of such cases, where this Tribunal has noticed the problems in following certain process in the cases of infrastructure companies (for allottees). In Paragraphs 9 and 10 of the judgment, following observations have been made: "9. In terms of the 'I&B Code' and the decisions of the Hon'ble Supreme Court, the 'Resolution Plan' must maximise the assets of the Corporate Deb....
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....ancial institutions/ banks (other financial creditors) or operational creditors of other project cannot file a claim before the Interim Resolution Professional of other project and such claim cannot be entertained. So, we hold that Corporate Insolvency Resolution Process against a real estate company (Corporate Debtor) is limited to a project as per approved plan by the Competent Authority and not other projects which are separate at other places for which separate plans approved. For example - in this case the Winter Hill - 77 Gurgaon Project of the 'Corporate Debtor' has been place of Corporate Insolvency Resolution Process. If the same real estate company (Corporate Debtor herein) has any other project in another town such as Delhi or Kerala or Mumbai, they cannot be clubbed together nor the asset of the Corporate Debtor (Company) for such other projects can be maximised." 87. This Tribunal in the above case has held that "if the same real estate company (Corporate Debtor herein) has any other project in another town such as Delhi or Kerala or Mumbai, they cannot be clubbed together nor the asset of the Corporate Debtor (Company) for such other projects can be maximi....
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....we may refer to Clause 21 of Sanctioned Letter dated 16.02.2016, which is as follows: "21 Security : The Facility shall be secured by the following: (1) (a) First exclusive mortgage of fully developed Plots (ready to construct plots by the prospective buyers) situated at Mother city, Lucknow (the "Lucknow Plots") Valuation/ Title Investigation to IFIN satisfaction by IFIN appointed Valuer/s & Legal Counsel. Details/ Title Deeds to be provided immediately for expeditious processing (2) First exclusive hypothecation of receivables from the Lucknow Plots ("Hypothecated Receivables of Lucknow Plots"). Irrevocable POA from Borrower for the Hypothecated Receivables of the Lucknow Plots (b) First exclusive hypothecation of Hypothecated Identified Receivables Irrevocable POA from Borrower for the Hypothecated Identified Receivables (c) (1) First exclusive mortgage built up properties (ready to move in status) (located at Lucknow/ Jaipur/ Jodhpur/ Ajmer) ("Built Up Properties") (2) First exclusive hypothecation of receivables from Built Up Properties ("Hypothecated Built Up Properties Receivables"). Irrevocable POA from Borrower for the Hypothecated Built Up Properti....
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....ve Hypothecation and escrow of 75% of Hypothecated & Escrowed Identified Receivables - Mother City and 100% Hypothecated & Escrowed Identified Receivables - Mother City Extension, as specified in Clause 7. Provided that in relation to the 75% of Hypothecated & Escrowed Identified Receivables - Mother City received/ receivable from the commercial and group housing units forming part of Mother City, Lucknow, the aforesaid charge shall be shared on a pari passu basis with charge created in favour of IFIN for securing the existing facility of Rs. 500 mn (Rupees Five Hundred Million) ("IFIN Existing Facility") provided by IFIN to APIL pursuant to a Facility Agreement dated Mar 18, 2016 4. Corporate Guarantee of all land-owning companies other than the Borrower, if any, providing immovable property as security 5. Personal Guarantee of Mr. Sushil Ansal and Mr. Pranav Ansal 6. Demand Promissory note in favour of the Lender. The Promissory note shall bear the common seal of the Borrower duly supported by a resolution of the Board of Directors of the Borrower 7. ECS/NACH mandate for Principal & Interest (including PDC for one month interest and Principal)" 90. The above securi....
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....ithout the counter signature and permission of the IRP. IRP under the IBC has responsibility to run the Corporate Debtor as a going concern. Further when Promoters are ready to extend all cooperation with all its staffs and employees to the IRP, we see no reason for not to direct the IRP to proceed with construction of all the projects under the overall supervision and control of the IRP. We by an Interim Order dated 12th April, 2022 directed not to constitute the 'CoC' which Interim Order is continuing as on date. 23. In the facts of the present case and keeping in view the submissions raised by the Learned Counsel for the parties, we are of the view that in 'CIRP' Process, Project-Wise Resolution to be started as a test to find out the success of such Resolution. Keeping an eye regarding construction and completion of the projects, we at present, are of the view that Interim Order dated 12th April, 2022 staying the constitution of CoC be modified to the extent that CoC be constituted for the Eco Village II Project only with all Financial Creditors including Financial Creditors/Banks/Home Buyers. The Committee of Creditors of Eco Village II Project shall start process for....
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....r repayment of the term loan given by the IL&FS are confined to only few projects, the CIRP initiated by the impugned order, cannot engulf all the projects of the CD, which are in no manner affected by financial facilities extended by the IL&FS to the CD. 94. The other projects apart from projects, which were noticed and dealt with in the Loan Agreements between the parties, cannot be affected at the instance of the IL&FS in the CIRP against the CD. As noted above, the Loan Agreements itself have noticed that projects of the CD, which are in different parts of the country. The securities as noticed above are confined to assets of the CD at Mother City Lucknow and three Cities in the State of Rajasthan. The Financial Institution and the CD having noticed in the Agreements that projects of the CD spread over entire country and assets of only few projects having been referred to and relied on by the Financial Institutions for its repayment and securities, we are of the view that CIRP initiated by the impugned order should be confined to the projects, which are referred to as securities and repayment. Including other projects will cause hardship to the stakeholders of different proj....
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....ention Application was rejected by the order passed on the same date, i.e. 25.02.2025. In the order rejecting the Intervention Application, the Adjudicating Authority has noticed the plea raised by the Homebuyers regarding several projects of the CD. Thus, before the Adjudicating Authority, the different projects of the CD had been noticed by the Adjudicating Authority itself. It is useful to notice Paragraphs 3 to 7 of the order dated 25.02.2025, rejecting the Intervention Petition: "3. We have heard the Learned Counsel appearing for the Applicants and perused the documents on record. In adjudicating upon the matter at hand, we are of the view that the Applicants, claiming to be homebuyers in the real estate project developed by the Corporate Debtor, seek intervention in the present proceedings under Section 7 of the Insolvency and Bankruptcy Code, 2016 ("IBC"). It is well settled that in proceedings initiated under Section 7, the primary concern is to ascertain the existence of a financial debt and default by the Corporate Debtor. The Applicants, being homebuyers, may have a financial interest in the project; however, their claims are already safeguarded under the provis....
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.... light of the above findings, this Adjudicating Authority is of the considered opinion that the present application lacks merit. The Applicants have failed to establish any legal or factual basis for their intervention in the ongoing proceedings under Section 7 of IBC. The relief sought, particularly the exclusion of the real estate project from CIRP, is not supported by any statutory provision or judicial precedent. Accordingly, the intervention petition Inv P. 43/ND/2024 in CP No.: IB 558(ND)/2024 is dismissed." 95.5. At the time of initiation of CIRP, the Adjudicating Authority also should have adverted to this aspect of the matter to issue necessary directions to clear any uncertainty regarding the extent of the CIRP and the manner in which the resolution of the CD could proceed. 95.6. Answer to Question No.V: In the facts of the present case, the CIRP needs to be confined at Lucknow project Mother City Lucknow and Mother City Extension Lucknow, including Sushant Golf City Project as well as three Projects of the CD situated in the State of Rajasthan - Ajmer, Jodhpur and Jaipur as referred to in the Sanction Letter dated 16.02.2016. The Adjudicating Authority nee....
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.... "22. That to ensure timely completion of the project as per the provisions of the approved DPR, the first party shall retain the transferable rights on 25 percent of total saleable land which shall be released in proportion to the second party on successful completion of various services to the functional stage. If the second party leaves any development, work incomplete, the same shall be completed by the first party through sale of the land so retained." 98. The Development Agreement dated 18.11.2006 was executed between the Lucknow Development Authority and the CD, where Clause 8 provides as follows: "8. Performance Guarantee To ensure timely completion of the project as per the provisions of approved DPR, the First Party shall retain the transferable rights on 25 percent of total saleable land, which shall be released in proportion to the Second Party! on successful completion of various services to the functional stage. If the Second Party leaves any development work incomplete, the same shall be completed by. the First Party through sale of the land so retained." 99. The projects at Lucknow City being projects under Hi-Tech Township, the Adjudicating A....