TMI Blog2022 (6) TMI 720X X X X Extracts X X X X X X X X Extracts X X X X ..... ommenced against the Corporate Debtor, all projects which had been undertaken and under construction comes under CIRP. As per the IRP Status Report, IRP has taken a stock of situation by visiting the sites which are under construction. CIRP has been initiated against the Corporate Debtor. CIRP has commenced against all the projects of the Corporate Debtor. CIRP encompasses all the assets of the Corporate Debtor including all Bank Accounts. The IRP has already been appointed and has taken steps by informing all concerned including Banks to add the name of IRP for operation of the Account - the consequence of CIRP is that all assets of the Corporate Debtor come in the control and management of the IRP. All bank accounts are to be operated with the counter signature of the IRP. No amount from any account can be withdrawn without the counter signature and permission of the IRP. IRP under the IBC has responsibility to run the Corporate Debtor as a going concern. Further when Promoters are ready to extend all cooperation with all its staffs and employees to the IRP, we see no reason for not to direct the IRP to proceed with construction of all the projects under the overall su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in construction of various projects in the National Capital Region (NCR). Union Bank of India vide its Sanction Letter dated 19.10.2013/16.12.2013 granted credit facilities of Rs. 150 Crores for the development of Eco Village II Project . The Union Bank of India and Bank of Baroda agreed to extend second credit facilities of Rs. 200 Crores where total exposure of Union Bank of India was Rs. 100 Crores which was sanctioned by Letter dated 21.11.2015. Credit Facilities was secured by execution of mortgage and with corporate guarantees and personal guarantees. There being default on the part of the Corporate Debtor in repaying the loan, the Account was declared as Non-Performing Assets (NPA) on 20th June, 2018. An application under Section 7 was filed by the Union Bank of India on 20th March, 2021 claiming total amount of Rs. 431,92,53,302/- as on 31st January, 2021 and interest thereon. The Adjudicating Authority vide the Impugned Order dated 25th March, 2022 admitted the Section 7 Application directing for initiation of CIRP . Mr. Hitesh Goel was appointed as Interim Resolution Professional (hereinafter referred to as IRP ). The Appellant, the suspended director of the Corp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome Buyers and even Operational Creditors. Corporate Debtor had sufficient receivables with positive net worth and it requires only last mile funding for completing constructions which will result in generation of adequate cash-flows to meet out all obligations of the Corporate Debtor. The strategic partner M/s Star Realcon Pvt. Ltd. has agreed in-principle to induce 300 Crores to complete the stalled project of the Corporate Debtor. Further Varde Partner a Grade A fund has also shown inclination to infuse substantial fund. The Appellant vide I.A. No. 1468 of 2022 has submitted detailed Settlement cum Resolution Plan to execute the project completion. 6. Learned Counsel for the Appellant has also relied on the Judgement of this Tribunal where Reverse CIRP was directed with regard to Real-Estate Projects. Learned Counsel for the Appellant submits that the present case is fit case where this Tribunal may follow the Judgment of this Tribunal in Company Appeal (AT) Ins. No. 926 of 2019 in the matter of Flat Buyers Association Winter Hills-77, Gurgaon Vs. Umang Realtech Pvt. Ltd. through IRP Ors. dated 04.02.2020. It is submitted that the Promoters of the Corporate Debto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... antiating the concept. Appellant s argument that the normal mechanism as is followed in a CIRP cannot be followed in cases of real estate infrastructure companies, is an attempt to circumvent the settled principles of law laid down in the Code. The Judgment relied by Learned Counsel for the Appellant on Reverse Insolvency is not attracted in the facts of the present case. Learned Counsel for the Bank submitted that this Court may permit the CoC be constituted and to enable the CIRP process to proceed in accordance with the law. 8. We have heard Mr. Bishwajit Dubey appearing for the IRP. He has submitted the Status Report dated 31st May, 2022 giving details of various facts regarding the claim management, construction, cash flow and list of key issues, details of finances provided to M/s. Supertech Limited by different Financial Creditors, Financial Creditors Claim as well as the details of various projects, number of total units, sold units, registered units, near ready units and under construction units and unsold units. The IRP in his Status Report has submitted that IRP after the commencement of the CIRP intimated the Management and informed the Banks and Banks were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a was the Lead Bank, has disbursed the loan for the development of Eco Village II Project and prays that it may be permitted to intervene in the proceeding, it being a Financial Creditor. 10. We have heard Learned Counsel for the parties as well as the Interveners and perused the record. 11. We have carefully gone into the status report submitted by the IRP dated 31st May, 2022. From the status report submitted by the IRP, it is clear that IRP in his Report has listed 20 projects of the Corporate Debtor which also included Eco Village II Project for which the finance was given by the Union Bank of India who has filed the Application under Section 7 of the Code for initiation of the CIRP. By the admission of the Application under Section 7 of the Code by the Adjudicating Authority, CIRP has commenced against the Corporate Debtor and when CIRP has commenced against the Corporate Debtor, all projects which had been undertaken and under construction comes under CIRP. As per the IRP Status Report, IRP has taken a stock of situation by visiting the sites which are under construction. The IRP has held several meetings with the Project Director. Paragraph 1.7 of the Report details wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T Finance - - - - - - - - 411 411 Bank of Baroda 71 - - 82 70 - - - - 223 IDBI Bank - - 222 - - - - - - 222 Punjab Sind Bank - 23 - - - - 163 - - 186 Bank of Maharashtra - - - 128 - - - - - 128 Indiabulls Commercial Cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to experiment is fraught with serious consequences to the nation. We have also seen that the working of the Code is being monitored by the Central Government by Expert Committees that have been set up in this behalf. Amendments have been made in the short period in which the Code has operated, both to the Code itself as well as to subordinate legislation made under it. This process is an ongoing process which involves all stakeholders, including the petitioners. 15. The thought which was echoed by Hon ble Supreme Court in Swiss Ribbons Pvt. Ltd. (supra) has been reiterated in the Judgment of Hon ble Supreme Court in Committee of Creditors of Essar Steel India Limited Vs. Satish Kumar Gupta and Ors. [(2018) 8 SCC 531]. This Tribunal in the case of Flat Buyers Association Winter Hills (supra) was faced with a case regarding Insolvency of a Real Estate Company. In the above Judgment, this Tribunal dealt with Reverse Corporate Insolvency Resolution Process and in paragraph 21 made following observations: 21. In Corporate Insolvency Resolution Process against a real estate, if allottees (Financial Creditors) or Financial Institutions/Banks (Other Financial Creditors) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to ensure completion of projects. In paragraph 25, following observations have been made: 25. In the light of aforesaid discussion, as we find it is very difficult to follow the process as in normal course is followed in a Corporate Insolvency Resolution Process, we are of the view, that a Reverse Corporate Insolvency Resolution Process can be followed in the cases of real estate infrastructure companies in the interest of the allottees and survival of the real estate companies and to ensure completion of projects which provides employment to large number of unorganized workmen. 17. In the above case, one of the promoters were directed to cooperate with the Interim Resolution Professional and to disburse the amount not as a promoter but as the outside Lender and direction for phase-wise completion of the project as well as direction for payment of financial institutions/banks simultaneously. In paragraph 26-27, following observations have been issued: 26. The Uppal Housing Pvt. Ltd. Intervenor (One of the Promoter) is directed to cooperate with the Interim Resolution Professional and disburse amount (apart from the amount already disbursed) from outside as Len ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce for Eco Village II Project. In annexure C of the Status Report of the IRP, Union Bank of India has shown to have given finance for Eco Village II Project, Eco Village III Project, Eco Village IV and One Romano Project. With regard to the Eco Village II Project, there is another Financial Creditor i.e. IDBI Bank who has filed Intervention Application as noted above. Large number of home buyers who has filed Intervention Application has prayed that CIRP be confined to Eco Village II Only. With regard to the other projects, the construction may be allowed to be completed so that home buyers may get their flats. 21. We are conscious of the fact that CIRP has been initiated against the Corporate Debtor. CIRP has commenced against all the projects of the Corporate Debtor. CIRP encompasses all the assets of the Corporate Debtor including all Bank Accounts. The IRP has already been appointed and has taken steps by informing all concerned including Banks to add the name of IRP for operation of the Account. The Learned Counsel for the Appellant made submissions and also filed an I.A. No. 1468 of 2022 by which Resolution cum Settlement Proposal has been submitted by the Managemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th regard to the project shall be utilized for construction purpose only with regard to the disbursement of rest 30 % amount, we shall issue appropriate direction after receiving further Status Report and after hearing all concern subsequently. 24. The Promoters of the Corporate Debtor has submitted that they shall arrange for Interim Finance to support the ongoing construction of the different projects by arranging finances as submitted in their Settlement cum Resolution Plan. Annexure 3 to the I.A. No. 1468 of 2022, with an object to complete the projects and clear the outstanding of all Financial Institutions including the Financial Creditors on the basis of 100% ledger balance and also payment to the Operational Creditor. The pendency of this proceeding shall in no manner hinder the Appellant to approach the Financial Creditors for entering into Settlement with the Financial Creditors. With regard to the disbursement to the Financial Creditors, out of 30% of the amount, we shall issue necessary direction after receiving the status report and receiving the progress of the projects. 25. In view of the foregoing discussions, we issue following Interim Directions: i. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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