Home Case Index All Cases Insolvency and Bankruptcy Insolvency and Bankruptcy + Tri Insolvency and Bankruptcy - 2021 (7) TMI Tri This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (7) TMI 552 - Tri - Insolvency and BankruptcyMaintainability of application - issue connected with CIRP relating to continuance of the affair of the Corporate Debtor - Seeking directions for issuance of a No Objection Certificate (NOC) in favour of Applicant No. 1 for the purpose of creating temporary security of 20% of the value of project land in favour of Ghaziabad Development Authority (GDA) in terms of Clause 4.7 of Pradhan Mantri Awas Yojana (PMAY) policy - seeking to release surplus value of security those were created by the applicant in favour of the DHFL so that the applicant can raise further loans from other Banks/Financial Institutions for construction in the project land - seeking waiver as well as reduction of rate of interest. Maintainability of application - issue connected with CIRP relating to continuance of the affair of the Corporate Debtor - HELD THAT:- By reading the provisions of Section 60(5) and 231 of IBC it is opined that this Adjudicating Authority possess with necessary jurisdiction under the above sections and in the light of Hon'ble Supreme Court decision in the matter of Gujrat Urja Vikas Nigam case [2017 (10) TMI 1533 - SUPREME COURT] to deal with the issue intrinsically connected with CIRP and which relates to continuance of the affair of the Corporate Debtor as going concern - the present application is maintainable before this Adjudicating Authority. Merits of the case - HELD THAT:- It is now a well settled legal position, under the IBC that the business of a Corporate Debtor undergoing CIRP must be ensured to run smoothly and as good as a going concern. The initiation of CIRP does not prevent/or prohibit the business activity of the Corporate Debtor but it is the duty of the Administrator and of the CoC to ensure that the Corporate Debtor should run all its business activities as a going concern. That apart as per settled Constitutional Law of the Land and declared by the Hon'ble Supreme Court that even in Administrative /Executive nature of proceedings it is incumbent upon the Government bodies/organization which are treated as instrumentality of state (Article 13 of the Constitution of India) to follow and adopt reasonable, just and fair procedure for making administrative decision and to maintain the transparency in their findings. As per record it is evident and may be seen that the GDA issued demand letter dated 01.10.2019, inter alia, for creation of ad hoc security and have also been apprised that GDA has issued notices dated 16.12.2020 calling upon the applicants to accomplish the mandatory requirements including creation of ad hoc security, in default of which the project shall stand disapproved. The representations made by the applicants span over a period of 16 months and even today they are facing hard ship - any further delay would irretrievably prejudice the project which is time bound in nature and under the supervision of the State Government and Central Government. Application disposed off by declaring that the applicants are entitled to create ad hoc security in favour of GDA in terms of Clause 4.7 of PMAY and they are eligible to raise additional loans from other banks and financial institutions by creating additional securities on the project land - the Administrator is directed to consider the grant of NOC in consultation with the CoC by retaining adequate and sufficient security as per their norms and to release encumbrances on security in surplus found against the outstanding amount of loan disbursed by the DHFL to the applicants and to grant the same by four weeks from the date of receipt of the copy of this order. Application is partly allowed and stands disposed off.
|