TaxTMI 
TaxTMI 
2026 (10) TMI 131
X X X X Extracts X X X X
X X X X Extracts X X X X
....recting them to refrain from taking any action in enforcing any Order, Award or recovery Certificate issued as against the Respondent No. 5/Corporate Debtor. C. Pass any other writ or order as may be deemed fit in the interest of justice and equity." 2. The petitioners state that they are aggrieved by the Public Auction Notice dated 06.06.2026, bearing No. MSC/RERA/CR/32/23-24, issued by respondent No.3, the Special Tahsildar, pursuant to a Recovery Certificate issued under Section 41 of the Real Estate (Regulation and Development) Act, 2016 ("RERA"). 3. Sri Adith S. Jahgirdar, learned counsel appearing for the petitioners, submits that the petitioners are the absolute owners of the subject property and had entered into a Joint Development Agreement with respondent No.5 for development thereof. It is submitted that respondent No.5 has since been admitted into the Corporate Insolvency Resolution Process ("CIRP") under the provisions of the Insolvency and Bankruptcy Code, 2016 ("IBC"), by order dated 04.06.2025, and that the CIRP is presently pending before the National Company Law Tribunal ("NCLT") in C.P. (IB) No.88/2025. 4. Learned counsel contends that, conseque....
X X X X Extracts X X X X
X X X X Extracts X X X X
....decree. That does not alter or disturb the status of the party concerned - in the present case of allottees as financial creditors. Furthermore, Section 238 IBC contains a non obstante clause which gives overriding effect to its provisions. Consequently its provisions acquire primacy, and cannot be read as subordinate to the RERA Act. In any case, the distinction made by the RP is artificial; it amounts to "hyper-classification" and falls afoul of Article 14 Such an interpretation cannot therefore, be countenanced." 8. By relying on 'VISHAL CHELANI', his submission is that the Hon'ble Supreme Court has unequivocally held that by virtue of the non obstante clause contained in Section 238 of the Insolvency and Bankruptcy Code, 2016, the provisions of the IBC have overriding effect over any inconsistent provision contained in any other enactment, including the provisions of the Real Estate (Regulation and Development) Act, 2016. It is, therefore, contended that once the Corporate Insolvency Resolution Process has commenced, the statutory framework under the IBC assumes primacy and any proceedings or measures under the RERA Act which have the effect of interfering with, diminish....
X X X X Extracts X X X X
X X X X Extracts X X X X
....NFRA INDIA,' his submission is that a Co-ordinate Bench of this Court has recognised the overriding effect of the provisions of the Insolvency and Bankruptcy Code, 2016, particularly Sections 14 and 238 thereof, over proceedings initiated under other enactments. It is submitted that the Co-ordinate Bench, after considering the decisions of the Hon'ble Supreme Court in Innoventive Industries Ltd., Anand Rao Korada, Alchemist Asset Reconstruction Company Ltd. and J. Manivannan, held that once the National Company Law Tribunal has assumed jurisdiction over the affairs of the corporate debtor and the Corporate Insolvency Resolution Process has commenced, parallel proceedings under another statute affecting the assets of the corporate debtor cannot be permitted to continue. 12. Learned counsel further submits that although the Coordinate Bench was dealing with proceedings initiated under the Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004, the principle enunciated therein is of general application. According to him, the ratio of the decision is that the statutory scheme of the IBC, by virtue of Section 238, prevails over any inconsistent provi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....placed on record to indicate that either the order passed by the RERA Authority or the Recovery Certificate issued in pursuance thereof has been stayed, modified or set aside by any competent forum. 18. The execution of the Recovery Certificate has also been undertaken pursuant to the directions issued by this Court in W.P. No.257/2024 by order dated 10.12.2025. It is further brought to the notice of this Court that contempt proceedings in C.C. No.241/2026 have also been initiated with regard to the implementation of the said directions. Thus, the impugned auction notice is merely a step taken in execution of an existing and enforceable Recovery Certificate. 19. The principal contention urged by the petitioners is not that the Recovery Certificate is illegal or without jurisdiction. Their contention is that respondent No.5 has been admitted into the Corporate Insolvency Resolution Process ("CIRP") under the Insolvency and Bankruptcy Code, 2016 ("IBC"), and therefore no auction of the subject property can be undertaken without the permission of the National Company Law Tribunal ("NCLT"). 20. This submission, at first blush, appears attractive. However, on a closer examinati....
X X X X Extracts X X X X
X X X X Extracts X X X X
....its Members or in respect of the allottees of such apartments or buildings; or (v) any other person who acts himself as a builder, coloniser, contractor, developer, estate developer or by any other name or claims to be acting as the holder of a power of attorney from the owner of the land on which the building or apartment is constructed or plot is developed for sale; or (vi) such other person who constructs any building or apartment for sale to the general public. Explanation.-For the purposes of this clause, where the person who constructs or converts a building into apartments or develops a plot for sale and the person who sells apartments or plots are different person, both of them shall be deemed to be the promoters and shall be jointly liable as such for the functions and responsibilities specified under this Act or the rules and regulations made thereunder;" 24. The effect of the above provision is that a land owner who permits development of his property through a developer under a Joint Development Agreement does not remain a mere owner of the land. For the purposes of the RERA Act, such a land owner is also treated as a promoter or co-promote....
X X X X Extracts X X X X
X X X X Extracts X X X X
....whether a Recovery Certificate can be executed, whether the moratorium under Section 14 is attracted, and whether any protective orders are required are all questions which fall squarely within the jurisdiction of the National Company Law Tribunal while supervising the Corporate Insolvency Resolution Process. 30. The petitioners themselves assert that they are stakeholders in the insolvency proceedings pending before the NCLT. If that be so, the IBC itself provides them with an effective and complete remedy. It is always open to the petitioners to approach the National Company Law Tribunal in the pending insolvency proceedings and seek such directions, interim protection or clarification as they may be advised in law. If the petitioners contend that the proposed auction would adversely affect the Corporate Insolvency Resolution Process, prejudice the interests of the creditors, or interfere with the jurisdiction of the Resolution Professional, those are precisely the issues which the NCLT is competent to examine and decide. 31. This Court, while exercising jurisdiction under Article 226 of the Constitution, cannot assume the role assigned by Parliament to the National Company....