TaxTMI 
TaxTMI 
2026 (3) TMI 1324
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....ena Panikar, Adv. for I.A No. 2959 of 2025 Mr. Krishnendu Datta, Sr. Advocate with Mr. Atul Sharma, Ms. Renuka Iyer, Mr. Anmol Bansal, Ms. Geetanjali Sharma, Mr. Arpit Paul, Advocates for EARCL. JUDGMENT ASHOK BHUSHAN, J. This Appeal by Suspended Director of the Corporate Debtor ("CD") has been filed challenging the order dated 19.11.2024 passed by National Company Law Tribunal, Principal Bench, New Delhi admitting Section 7 petition filed by Respondent Nos.1 to 43 - Financial Creditors in a class and allottees of project 'Raheja Shilas (Low Rise)', situated at Sector 109, Gurugram, Haryana being developed by the CD - M/s Raheja Developers Ltd. 2. Brief facts giving rise to the Appeal are: (i) The CD - M/s Raheja Developers Ltd. lodged residential project namely - 'Raheja Shilas (Low Rise)'. The CD has also obtained the license from Directorate of Town Country Planning, Haryana ("DTCP") for developing the residential group housing colony dated 07.11.2007. The Financial Creditors in a class, Applicants (Respondent Nos.1 to 43 herein) showed willingness to take allotment of units. Respondent Nos.1 to 43 were allotted different units and Builder Buyer Agreement....
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....Authority to commence the insolvency with regard to the Project to which the Applicants were concerned. It was submitted that issue pertaining to Electricity Dues have been now solved and No Objection Certificate ("NoC") has been issued, the Directorate of Town & Country Planning, Haryana has also been requested to issue Occupancy Certificate. Considering the submissions of the Appellant as well as learned Counsel for the Respondents and the Intervenors, this Tribunal passed an order on 21.11.2024, wherein following directions were issued in Paragraphs 8 and 11: "8. Considering the facts of the present case, we are of the view 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)'. Interim Resolution Professional (IRP) may collate the claims with regard to the Project and submit the Status Report. IRP shall take all endeavour with the assistance and management of employees of the Corporate Debtor to obtain the OC and do other completion which are required for handing over the Project to the Allottees. 11. Status Report be filed within four weeks by the IRP. IRP apart fro....
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....ted 27.10.2025, where it was noticed that homebuyers had taken possession of certain units and certain documents are yet to be executed. On 18.12.2025, this Tribunal also noticed that 33 homebuyers were handed over possession. A Status Report was also filed by the IRP. The Appeal was heard by this Tribunal on 02.03.2026, on which date, orders were reserved. 6. We have heard Shri Abhijeet Sinha, learned Senior Counsel and Shri P. Nagesh, learned Senior Counsel appearing for the Appellant; Shri Samar Bansal and Shri Manu Chaturvedi, learned Counsel for Respondent Nos.1 to 43. Learned Counsel for various Intervenors; Shri Krishnendu Datta, learned Senior Counsel appearing for EARCL; learned Counsel for IRP and IRP has also appeared in person. 7. Learned Counsel for the Appellant in support of the Appeal submits that on account of various orders passed by this Tribunal in the present Appeal to facilitate resolving of all issues between the parties, substantially all issues have been resolved. The Occupancy Certificate received from DTCP Haryana and possession have also been handed over to the homebuyers, including Respondent Nos.1 to 43 of their units. The IRP has also calculated....
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....es, even after handing over all the units. Electricity dues of approximately Rs. 42 lakhs remain unpaid to the DHBVN and only an interim electricity order of electricity of 900-1000 KV has been acquired, which is insufficient for entire project, comprising of 94 units. All project related issues pointed out by the IRP in the Status Report remain pending. Learned Counsel for Respondent Nos.1 to 43, thus, have not expressed its satisfaction on resolving of all the issues between the parties and have constantly expressed their dissatisfaction. 9. Learned Counsel for the IRP has also raised various issues in its Status Report. The IRP however submitted that IRP has taken steps in compliance of the orders issued by this Tribunal in the present Appeal from time to time. The IRP has also in the Status Report has brought all events and materials on record. 10. Learned Counsel appearing for various Intervenors contended that they are allottees in other projects of the CD and there is no clarity as to whether Section 7 proceedings initiated by allottees of other project need to be proceeded. It is submitted that in view of interim order passed in this Appeal, the proceedings under Sect....
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....judicating Authority in the impugned order after considering the submissions of the parties on Question Nos.(b) and (c) has held that default on the part of the CD in not handing over the possession is proved and further essential ingredients of 'debt' and 'default' is also proved. After answering both the above questions, the Adjudicating Authority has held that debt and default is proved, the possession was to be given in the year 2012-2014 with a grace period of 6 months and the debt has been acknowledged by various emails and default is continuing. On the aforesaid findings, Section 7 application was admitted. We, thus, do not find any error in the order of Adjudicating Authority in initiation of CIRP against the CD. 14. Now, we come to Question No.(II), whether the CIRP against the CD ought to have been confined to the project Raheja Shilas (Low Rise), in which project, Respondent Nos.1 to 43 Financial Creditor in a class claimed allotment. 15. When the Appeal was heard, this Tribunal on 21.11.2024 passed an order, where in Paragraph 3, following was observed: "3. The submission which has been raised by the Counsel for the Appellant is that the Applicants who ha....
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.... 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 balance judicial approach will have far-reaching benefits. In Paragraph-15.5, following was observed: "15.5. A balanced judicial approach in this regard will have farreaching benefits: protecting homebuyers, restoring confidence in the real estate market, and encouraging reputed business houses and conglomerates to participate in residential development. In taking this approach, this Court seeks to contribute....
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....itutions are of one project initiated CIRP against the CD, it be confined to the particular project and it cannot affect other projects of the real estate company in other places. In Paragraph 21 of the judgment, following was laid down: "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 authorities, land and its owner may be different and mainly the allottees (financial creditors), financial institutions (financial creditors, operational creditors are different for such separate project. Therefore, all the asset of the company (Corporate Debtor) are not to be maximized. The asset of the company (Corporate Debtor - real estate) of that particular project is to be maximized for balancing the creditors such as allottees, financial....
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....ject and it cannot affect any other project. Thus, the above proposition of law as laid down in Flat Buyers Association Winter Hills was again been reiterated in the judgment of Gagan Tandon. Gangan Tandon was a case where IL& FS Financial Services Ltd. - Financial Creditor has initiated proceedings under Section 7. It was held by this Tribunal in the above case that IL&FS has obtained various securities from the CD and CIRP should confine only to those projects in which Financial Creditor has securities. The CD was holding various projects in different States and different Cities and the State of UP, were not to be affected. The conclusions were recorded in Paragraph 110 of the said judgment. The above judgment fully supports the submissions of the Appellant that allottees being only to the project Raheja Shilas (Low Rise), the CIRP should confine to the project Raheja Shilas (Low Rise) only. We, thus, are satisfied that the impugned order needs to be modified, confining the CIRP to the project Raheja Shilas (Low Rise) only. Question No.(III) 19. We having taken the view that CIRP initiated by the impugned order, needs to be confined to the project Raheja Shilas (Low Rise) o....