TaxTMI 
TaxTMI 
2026 (7) TMI 845
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....g Authority"), Indore Bench, in IA(PLAN)/3(MP)/2025 in CP(IB)/26(MP)/2024 and against the Impugned Order dated 09.03.2026 passed by the National Company Law Tribunal ("Adjudicating Authority"), Indore Bench, in IA 260(MP)/2025 in CP(IB)/26(MP)/2024. Hasti Mal Kachhara, who is the Resolution Professional of Pushp Ratna Realty Private Limited, is the Respondent No.1 herein. Pushp Ratna Realty Private Limited, who is the Corporate Debtor through its Authorised Representative, is the Respondent No.2 herein. Rajendra Hirani, who is the successful Resolution Applicant, is the Respondent No.3 herein. 2. The Appellants submitted that they are the absolute and lawful owners of the subject land bearing Survey No. 388/2/17 admeasuring 0.112 hectares situated at Village Khajrana, Tehsil and District Indore, Madhya Pradesh. The Appellants stated that their title originates from a registered Sale Deed dated 18.01.1995 executed for valuable consideration in favour of Appellant No. 1 and the predecessor-in-interest of Appellant No. 2, Late Smt. Sushila Devi Tripathi. The Appellants contended that their ownership rights have continuously remained reflected in the revenue records and hav....
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....er composite project styled "Lush by Pushpratna" without obtaining their consent or approval. The Appellants contended that various statutory approvals, sanctions, and permissions were obtained by the Corporate Debtor behind their back and without their participation, despite the Agreement requiring consultation and cooperation between the parties. The Appellants stated that none of the approvals relied upon by the Corporate Debtor bear their signatures and none were obtained with their knowledge or authorization. The Appellants further submitted that the project originally agreed between the parties was silently abandoned and replaced by a completely different project structure, layout, and branding without any contractual basis. 6. The Appellants contended that the very foundation of the project approvals was tainted by serious irregularities. It was submitted that the land diversion proceedings, which formed the basis of the layout sanction and subsequent approvals, were initiated through an application that bore no signature of the applicant. According to the Appellants, these facts cast serious doubt upon the legality and validity of the regulatory approvals relied upon by ....
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.... the Agreement they approached the Commercial Court at Indore under Section 9 of the Arbitration and Conciliation Act, 1996. The Appellants stated that the Commercial Court, after hearing the Corporate Debtor, passed an order dated 06.09.2024 directing maintenance of status quo with respect to the subject land. The Appellants contended that the said order continued to remain in force even on the date of approval of the Resolution Plan and has not been vacated or set aside by any competent authority. According to the Appellants, the existence of the status quo order constituted a significant legal impediment to any attempt to include the subject land in the insolvency estate or utilize it for implementation of the Resolution Plan. 11. The Appellants submitted that when CIRP commenced on 16.10.2024, the factual and legal position was clear: the Development Agreement stood terminated; the termination remained unchallenged; the status quo order was subsisting; the building permission had already been revoked; and the RERA registration had expired. The Appellants contended that under such circumstances the Corporate Debtor possessed no enforceable rights over the subject land capable....
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....to third parties and merely held under contractual arrangements cannot be treated as assets of the Corporate Debtor. The Appellants argued that once the Development Agreement stood terminated prior to CIRP, even the limited contractual development rights of the Corporate Debtor ceased to exist. 15. The Appellants further submitted that the Resolution Plan fundamentally rewrites the Development Agreement. The Appellants contended that their entitlement under the Agreement was specifically confined to 37% of the saleable area to be constructed on the subject land. However, the Resolution Professional sought to substitute this contractual entitlement with a vague assurance that the Appellants' interests would be protected by granting them 37% of the larger project. The Appellants stated that no specific unit, block, floor, tower, or parcel was identified for this purpose. The Appellants contended that such an approach amounts to unilateral modification of a registered contract without the consent of the landowners and is legally impermissible. 16. The Appellants submitted that the Resolution Plan was neither feasible nor viable. The Appellants contended that the entire implement....
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....inguishment of such rights. 20. The Appellants further submitted that the Impugned Order grants sweeping reliefs and concessions beyond the scope of Section 31 of the Code. The Appellants stated that the Order directs revalidation of revoked approvals, waiver of municipal dues, expedited grant of statutory permissions, extinguishment of liabilities, and transfer of all encumbrances to the Successful Resolution Applicant. The Appellants contended that such directions effectively substitute the functions of regulatory authorities and operate against the rights of third parties, including the Appellants. According to the Appellants, these reliefs travel beyond the permissible scope of judicial review under the Insolvency and Bankruptcy Code. 21. The Appellants submitted that the Resolution Plan itself acknowledges its dependence on future negotiations with the landowners. The Appellants pointed out that Clause 7.5 of the Resolution Plan expressly provides that the Successful Resolution Applicant may interact and negotiate with the landowners regarding the undeveloped portion of the land and that the future terms and conditions are yet to be decided. The Appellants contended that....
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....d Country Planning Department, Municipal Corporation, and the RERA. Consequently, the said land cannot be segregated from the project at this stage. 27. The Respondent No. 1 submitted that the project consists of multiple land parcels brought together under a common development scheme and substantial third-party rights have already been created in favour of homebuyers. The Respondent No. 1 stated that approximately 43 homebuyers have invested substantial sums in the project and have filed their claims during CIRP proceedings. The Respondent No. 1 elaborated that the Corporate Debtor had raised funds and marketed the entire project as one project of multiple towers and common facilities, based on the collective land parcels forming part of the sanctioned project, which included the said land parcel of the Appellants also. Therefore, permitting the Appellants to isolate or carve out their land from the project is practically impossible and impermissible and would seriously prejudice the interests of homebuyers and other stakeholders. The Respondent No. 1 further submitted that such a course would be contrary to the law laid down by the Hon'ble Supreme Court in Gujarat Urja Vikas N....
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.... the Appellants contractual rights remain protected. 31. Concluding arguments, the Respondent No. 1 requested this Appellate Tribunal to dismiss both appeals. Findings 32. The core issue of both appeals, is based on the pleadings of the Appellants that the Development-cum-Collaboration Agreement dated 29.10.2010 was a standalone contract confined only to the subject land bearing Survey No. 388/2/17 admeasuring 0.112 hectares situated at Village Khajrana, Tehsil and District Indore, Madhya Pradesh and the subject property did not form part of the larger project known as Lush by Pushpratna. The Appellants stated that the contract executed between the Appellants and Corporate Debtor was never intended to be a part of any larger real estate development, i.e. Lush by Pushpratna as the Development-cum Collaboration Agreement dated 29.01.2010 was restricted strictly to Khasara No. 388/2/17 admeasuring 0.112 hectares, and that no clause therein permitted the inclusion of the subject land in any composite or integrated township project as done by the Corporate Debtor. 33. On this aspect, we have also noted the pleadings of the Respondent No. 1 brought out that the subject land f....
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....re indeed obtained by the Corporate Debtor. We find it difficult to accept that the Appellants remained completely unaware of the inclusion of their land in the sanctioned layout and the development activities undertaken under the banner of the Lush by Pushpratna throughout this entire duration. We consciously note that the Resolution Professional has submitted that the entire information with respect to the plan approval was available on RERA Website. As such, we do not find any merit in the arguments of the Appellants that project was conceived as a whole, without their knowledge or consent. 37. As regard, issue of absence of signature by the Appellants during approval by authorities, we note that as per the terms of the Agreement, it was the Corporate Debtor who was required to obtain necessary permissions, and the Appellant was only required to cooperate. Therefore, the mere absence of the Appellants signature on certain documents, by itself, does not invalidate the approvals, particularly when no timely challenge was made by the Appellants at any legal forum or even writing as protest to the Corporate Debtor. 38. It is the case of the Appellants that there is no clause i....
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.... does not continue to bind the Corporate Debtor from the date of commencement of the Corporate Insolvency Resolution Process (CIRP), owing to the operation of the moratorium. Furthermore, upon approval of the Resolution Plan, the Corporate Debtor stands vested in the Successful Resolution Applicant on a "clean slate" basis, with all liabilities pertaining to the pre-CIRP period standing extinguished, except to the extent specifically preserved under the approved Resolution Plan. Consequently, any claims, disputes, or liabilities not recognized or provided for in the approved Resolution Plan, are deemed to have been extinguished. The Appellants cannot, by indirect means, seek to resurrect alleged contractual disputes that no longer survive against the Corporate Debtor following the approval of the Resolution Plan. 42. It has been brought that that the Development-cum Collaboration Agreement dated 29.10.2010 executed between the Appellants and the Corporate Debtor contains two different clauses. One clause stipulates that in the event the project is not completed within a period of five years with an additional grace period of eighteen months, the Appellants would be entitled to t....
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....ancial burden or escalation in cost by the Successful Resolution Applicant. Homebuyers constitute a protected class under the insolvency framework, and their rights and interests cannot be compromised or defeated. 45. We are of the opinion that from circumstances, it appears that the termination was affected only when the Appellant became aware of the pending CIRP and then only the termination notice dated 06.08.2024 was issued i.e., barely two months prior to the commencement of the CIRP on 16.10.2024, as ordered by the Adjudicating Authority. In view of these facts, we find that when the Appellants knew the impending commencement of CIRP, then only the Appellants chose to unilaterally rescind the contract, after five years after the expiry of the stipulated time. This does not find favours for the Appellants and we do not find merit in the arguments of the Appellants on this ground. 46. We have noted that all information of the whole project was already available in the public domain on the RERA website public portal under Registration No. p-ind-17-1023 and details pertaining to the permissions and approvals obtained from all competent authorities, including sanctions and r....
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....asuring 0.112 hectares was not part of the larger project namely the Lush by Pushpratna and therefore no rights of homebuyers were created in respect of the said land. However, we have noted that the subject land was included in the sanctioned layout of the Lush by Pushpratna and the entire project was marketed to homebuyers as a single integrated project. No one can deny that the homebuyers applied for allotments on the legitimate expectation that the project was a composite and unified real estate project including the subject land of the Appellants in the approved layout plan of the Lush by Pushpratna and formed part of the composite project as approved by various authorities. The homebuyers acquired rights in property of the Corporate Debtor for consideration and therefore in terms of Code, after the amendment recognising allottees under real estate projects as financial creditors as a class, such homebuyers stand as financial creditors of the Corporate Debtor. We take into consideration that the Hon'ble Supreme Court, in Pioneer Urban Land and Infrastructure Ltd. v. Union of India case, recognised that amounts raised from allottees under real estate projects have the commercia....
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....be segregated without fundamentally impairing the sanctioned project, frustrating the implementation of the approved Resolution Plan, and causing irreparable prejudice to the homebuyers and other stakeholders. Thus, we cannot find any merits in the Appellants' attempt to isolate the subject land. 53. It is very pertinent here to note that one similar intervener/land owner of the same Lush by Pushparatna, who had entered into an MOU with Corporate Debtor for development of subject land, had challenged the admission order dated 16/10/2024 passed in CP(IB) 26 of 2024 before this Appellate Tribunal, wherein this Appellate Tribunal has made the following observations in reference to the home buyers: "24...... The rights of the home buyers cannot be sacrificed on account of inter se dispute between the shareholders. We are of the considered view that the home-buyers have every right to safeguard their interest and were justified in taking steps permissible under the statutory construct of the IBC to seek redressal of their grievance by seeking initiation of the CIRP of the Corporate Debtor.... (Emphasis supplied) 54. Thus, this Appellate Tribunal has already upheld ....