TaxTMI 
TaxTMI 
2026 (3) TMI 1592
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....UDGMENT ASHOK BHUSHAN, J. These two appeals have been filed by the Homebuyers of the Corporate Debtor - Vatika Ltd. challenging two separate orders passed by National Company Law Tribunal, Chandigarh Bench, Court-I, Chandigarh. Company Appeal (AT) (Ins.) No.268 of 2026 has been filed challenging order dated 03.02.2026 passed by the Adjudicating Authority rejecting IA (I.B.C)/1537(CH)2025 filed by the Appellants under Section 65 of the I&B Code. Company Appeal (AT) (Ins.) No.269 of 2026 has been filed by the Challenging the order dated 03.02.2026 admitting Section 7 application filed by IDBI Trusteeship Services Ltd. In CP(IB) No. 45/Chd/Hry/2024. Brief background facts necessary to be noticed for deciding the appeal are: (i) The Corporate Debtor - Vatika Ltd. has been developing a project namely 'Aspirations' in village Harsaru, Sector 88B, Gurugram. The Corporate Debtor obtained registration certificate of the project issued by Haryana RERA on 23.12.2022 for total area admeasuring around 19.70 acres (12.212+7.50 acres). (ii) Allotment letters were executed between the Appellants and the Corporate Debtor on 17.10.2023. Appellant No.1 was allotted a Plot No.3....
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.... from the allottees were to be received m the escrow account, which is controlled by the Financial Creditor /its representative. The application filed by the Appellants satisfied grounds as required under Section 65. The Financial Creditor induced default for purpose other than resolution of the Corporate Debtor in non-issuance of NOC for sale in favour of the homebuyers. 4. Learned counsel for the Respondent No.1 refuting the submissions of learned counsel for the Appellant submits that application under Section 65 filed by the Appellants was itself misuse of process of Court. The Respondent No.1 has filed Section 7 application due to default committed by the Corporate Debtor in payment of dues of the Financial Creditor as per Debenture Trust Deed. Appellant has failed to establish any fraud or malicious intent as required under Section 65 application. The provision requires specific pleadings supported by strict and cogent proof and cannot be triggered on the basis of vague assertions or speculative allegations. Non- issuance of NOCs were in certain instances, such contractual or commercial issues does not amount to any fraud or malicious initiation. Section 7 petition was ins....
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....ce of NOC by Respondent No.1 does not furnish any ground for invoking jurisdiction under Section 65. 8. A copy of the application filed under Section 65 has been brought on the record by the Appellant at Annexure A-2. Appellants in the application claims allotment of different plots by the Corporate Debtor and also claim to be entered into Builder Buyer Agreement in the year 2023-2024. The pleading in the application is that although units were allotted but NOC was not issued by Respondent No.1 even though homebuyers have paid consideration. In Paras 28, 29 and 30 following has been pleaded: "28. That Respondent No. 1 has failed to issue the necessary NoCs, which prevents the Respondent No.2 from executing the conveyance deeds and completing the sales. 29. That by withholding the NoCs, Respondent No. 1 is choking the developer's cash flow from the project's receivables while using the IBC as a coercive debt recovery tool rather than a mechanism for collective resolution whereas, the goal of the IBC is to resolve insolvency and maximize value for all stakeholders, not just one creditor. 30. The applicants, as homebuyers, are also financial credi....
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....tends that the initiation of CIRP by the respondent - EARCL lacked bona fides and was intended to operate as a recovery mechanism rather than a resolution process. It is urged that the Corporate Debtor was a going concern; that the real estate project was substantially completed; and that adequate receivables from unsold inventory were available to service the debt. The default, according to the Corporate Debtor, was not wilful but occurred due to EARCL's refusal to issue provisional No Objection Certificate, which allegedly frustrated further sale of remaining units. Such conduct, it is contended, disentitles EARCL from invoking Section 7 of the Code." ......................... ......................... "12.10. Any alleged non-cooperation by EARCL occurred subsequent to the default and cannot absolve the Corporate Debtor of its admitted failure to comply with its payment obligations. The NCLAT correctly held that considerations such as ongoing operations, partial project completion, or anticipated receivables are extraneous to the statutory mandate under Section 7." In view of the aforesaid, it is evident that any issue pertaining to non-issuanc....