TMI Blog2021 (7) TMI 552X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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 deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 in GDA under the PMAY. The applicant has sought waiver of the interest also from the date of the sanction of loan till date of issuance of NOC; issuance of directions to the Respondent to reduce the rate of interest to 11% per annum in respect of loan of ₹ 650 Crore; and issuance of directions to reduce the rate of interest to 12.50% per annum to loans sanctioned to applicant no. 2. By this application the applicants have sought for following reliefs:- a) Direct the Respondent/Administrator of DHFL to issue a no-objection certificate in favour of the Applicant No. 1 for creating temporary security of 20% of land which is approximately 10 acres out of total land of 63.45 acres for 24 months in favour of GDA, which is mandatory in terms of clause 4.7 of the PMAY policy of Government of India, which will be released by GDA after 24 months or in the alternative this learned Tribunal may permit the Applicants to create temporary security of 10 acres in favour of GDA; b) Direct the Respondent/DHFL to issue a NOC in favou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd decided by this Adjudicating Authority under realm of the IBC. 5. While contra to the above, the Learned Counsel for the Applicant contended that the issue involved in the present IA very much relates to the continuance business activity of the Corporate Debtor (DHFL) as a going concern and it is a financial service provider. Therefore in the light of Hon'ble Supreme Court decision in the Gujrat Urja Vikas Nigam V/s Solar Semiconductor Power Company Pvt. Ltd. (Civil Appeal No. 6399/2016), this Adjudicating Authority is having proper jurisdiction and the present application is maintainable. 6. Having considered above stated rival contention of the parties and by reading the provisions of Section 60(5) and 231 of IBC we are of the considered view 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 to deal with the issue intrinsically connected with CIRP and which relates to continuance of the affair of the Corporate Debtor as going concern. We therefore, hold that the present application is maintainable before this Adjudicating Au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GDA for a period of 24 months. 11. The Respondent, vide letter dated 13.01.2020, took such stand that the request for issuance of NOC was prima facie not acceptable. No reasons for taking such stand were indicated. 12. The Respondent initially vide letter dated 17.06.2020 has stated that DHFL is not concerned at all with the real estate project of Applicant No. 1 2. But thereafter it through a letter dated 01.07.2020, informed to the Applicants that its request were forwarded to the concerned department for its consideration. However finally Respondent vide its letter dated 25.08.2020, communicated to the Applicants that its request for issuance of NOC cannot be acceded to because of that the DHFL is undergoing CIRP. 13. A perusal of material placed on record goes to show that the present Applicant has submitted tender/bid made for the real estate project under Pradhan Mantri Awas Yojna (PMAY). Such tender/bid was duly accepted by the GDA vide letters dated 15.02.2019 and 16.02.2019. As per GDA, Ghaziabad such project is affordable Housing Project under the PMAY. The Clause 4.7 of PMAY stipulates such condition that the builder has to create an ad hoc security over 20% o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty in favour of GDA is ad hoc and once the EWS Houses are constructed, the security shall be released by GDA. 17. Since the Applicants have further contended that the commercial outlay of the project is more than ₹ 3000 Crore, they are in need of availing additional loans from other banks and financial institutions. 18. However we find that the request of the Applicants for issuance of NOC otherwise was not considered on its merits but was negated on such pretext that DHFL is under CIRP. 19. Therefore 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 instrumentalit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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