TMI Blog2023 (6) TMI 415X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the IRP had filed multiple IAs before the Adjudicating Authority, subsequent to which, this Common Order dated 04.09.2020 was passed clarifying that the CIRP was with respect to one Project, namely Dreamz Sumadhur Project only - This Tribunal in the matter of Ram Kishor Arora Suspended Director of Supertech Ltd. Vs. Union Bank of India Anr. [ 2022 (6) TMI 720 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI] , passed by the Principal Bench, New Delhi has directed for Project Wise Resolution wherein the IRP was directed to separate the Claims received with regard to the Project. The scope and objective of the Code is to see that there is Resolution of the Corporate Debtor Company and seek maximization of Assets. A three-Member Bench of the NCLAT, Principal Bench, New Delhi in the matter of Majestic Towers Flat Owners Association Anr. Vs. Housing Development and Infrastructure Ltd. Ors. [ 2022 (1) TMI 166 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI] , has held that Project Wise Insolvency can be granted to bring about better Resolution and prevent Liquidation as the sufferers would be the Homebuyers who are thousands in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the well-reasoned Order of the Adjudicating Authority, National Company Law Tribunal, Bengaluru Bench and hence application fails and is accordingly dismissed. - TA No. 79/2021 (Comp. App. (AT) (Insolvency) No. 851 of 2020) (I.A. Nos. 432/2021 & 191, 329/2023) - - - Dated:- 1-6-2023 - [ Justice M. Venugopal ] Member ( Judicial ) And [ Ms. Shreesha Merla ] Member ( Technical ) For the Appellant : Ms. Lakshmi Menon , Advocate For the Respondents : Mr. Ashok Kriplani , Advocate for R-18. Ms. D. N. Usha , Advocate for R-5. Mr. Tushar Singh, Advocate, For R-12 R-16. JUDGEMENT [ Per ; Ms. Shreesha Merla , Member ( Technical ) ] : 1. This Appeal is preferred by the Resolution Professional ( RP ) aggrieved by the Impugned Order dated 04.09.2020 passed by the Adjudicating Authority (National Company Law Tribunal, Bengaluru Bench), in the Common Order in IAs No.205-208, 213-218, 304-307, 309-311/2020, in C.P. (IB) No.84/BB/2019, by which common Impugned Order , the Adjudicating Authority has dismissed all the Applications , observing as follows: 26. As per information furnished by the Applicant through Information Memorandum, aggrieved by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n relation to the project Dreamz Sumadhur only and not in respect of all the projects of the Corporate Debtor, so that CIRP in question initiated by the Adjudicating Authority, would be concluded in terms of extant provisions of Code and the Rules thereunder. We are also supported in this regard by the judgement of the Hon ble NCLAT in Flat Buyers v/s Umang Realtech Private Limited, as cited supra. 2. Learned Counsel for the Appellant /RP submitted that the IRP Sh. Ashok Kriplani was replaced by the present Appellant , Mr Konduru Prasanth Raju vide Order dated 08.03.2021 and that pursuant to his appointment, the RP had undertaken steps to perform his duties and filed I.A.431/2021 to substitute himself. It is submitted that the Adjudicating Authority , while considering 17 Applications filed by the Erstwhile Resolution Professional ( ERP ) observed that in the interest of justice and equity, the Corporate Insolvency Resolution Process ( CIRP ) initiated by the Adjudicating Authority , vide Order dated 20.08.2019 should be interpreted to read in relation to Dreamz Sumadhur Project only and not in respect of all the Projects of the Corporate Debtor . It is averred that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on ble High Court of Karnataka is seized of the issue in WP No. 1343/2021 and WP No.207/2022 as to whether IBC or KPIDEF Act will prevail over the other, particularly in the case of the Corporate Debtor . However, it is humbly submitted that there is no impediment from these proceedings before the High Court to the present Appeal. A decision from this Tribunal on the correct legal position in the present matter will only in fact aid the Hon ble High Court of Karnataka in deciding the Writ Appeals ultimately. It is submitted that the hearing on merits in these Writ Appeals has not yet commenced and the tentative next date of Hearing is 23.05.2023. 6. Learned Counsel for the Appellant placed reliance in the matter of N. Kumar Vs. M/s. Tata Housing Finance Ltd. (2022) ibclaw.in 329 NCLT , in which the Adjudicating Authority in para 9 has observed as hereunder: 9. Heard the Learned Counsel for the Applicant and taking into account the facts of the present case, as well as the documents submitted by both the Applicant as well as the Dissenting Financial Creditor vis., M/s. Tata Capital Housing Finance Ltd. On a thorough reading of the IBC, 2016 read alongwith the regulat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts. It is brought to the Notice of this Bench that in C.P. (IB) No.83/BB/2019, Section 7 Application has been admitted against another Project namely M/s. Dreamz Sneh Project Allottees Welfare Association on 15.02.2023. It is submitted that the Order has necessitated multiple Insolvency Resolution Proceedings initiated against the same Corporate Debtor and that the concept of reverse CIRP is inapplicable to the facts of this case as Corporate Debtor and its Promotors have opened 50 different Bank Accounts where in deposits from Homebuyers were accepted/transferred into. It is also submitted that the Appellant , as part of his report submitted to the Hon ble High Court of Karnataka in Writ Petition No.7500/2021, which was disposed of vide Order dated 27.02.2023, that the Homebuyers lack Commercial Wisdom to take the CIRP forward and that they have voted in the negative for offer of refund; for construction of new homes etc. The RP filed the Minutes of the Meeting of the 10th CoC stating that the CoC Members are not interesting in Resolution. 9. The first Respondent filed his Reply stating that the first Respondent does not have any nexus or direct relationship with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant which was not placed before the Adjudicating Authority . It is submitted that the RP has wrongly invited all Claims from all Homebuyers from different Projects frauded by Dreamz Infra India Limited. It is submitted that the debts of the Corporate Debtor are specific to this Project only and that the constitution of CoC of the Homebuyers ought to be with respect to Sumadhur Project only. It is submitted that the Homebuyers of Sumadhur Project did not accept the extension of the CIRP Arbitrarily done by the RP including all Projects and hence did not pay the fee. It is further argued that Members of the fifth Respondent Consumer Association are not inclined to pay any fees as in the garb of CIRP for Sumadhur Project, the RP has erroneously extended the proceedings to all Projects which is in contempt of the NCLT Order dated 20.08.2019. 13. The sixth Respondent submitted that the CoC of Dreamz Infra India Ltd. filed Writ Petition in W.P. No. 1108/2020, challenging the Order dated 04.09.2021 passed by the NCLT in I.A. No.214/2020 and other IAs filed by the Appellant in C.P.(IB) No.84/BB/2019, before the Hon ble High Court of Karnataka, at Bengaluru, it has gra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amz Sumadhur Project only. 15. The 16th Respondent filed Reply stating that they are not a party to the C.P. (IB) No.84/BB/2019 filed by the three Homebuyers of the Dreamz Sumadhur Project and that the 16th Respondent had entered into an MoU dated 11.09.2012 and subsequently a JDA dated 08.11.2012 with the Corporate Debtor , whereby and whereunder the Corporate Debtor has agreed to build Residential Units and the Sale Proceeds would be shared between the 16th Respondent and the Corporate Debtor . But the Corporate Debtor never adhered to the terms of the MoU and that the 16th Respondent cannot be dragged into these proceedings. The Application is filed by the RP are purely Civil in nature and submitted that the Adjudicating Authority has rightly confined the CIRP to Dreamz Sumadhur Project only. The Applications revolved around disputed questions of fact which need proper adjudication only by a Civil Court. 16. The 18th Respondent/ERP submitted that four criteria required for reverse CIRP i.e., fresh financing of the Project, no haircuts, assets being greater than liability, Project Wise Account are not satisfied in the instant case and therefore the Adjudica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by the Principal Bench, New Delhi has directed for Project Wise Resolution wherein the IRP was directed to separate the Claims received with regard to the Project. 22. The scope and objective of the Code is to see that there is Resolution of the Corporate Debtor Company and seek maximization of Assets. A three-Member Bench of the NCLAT, Principal Bench, New Delhi in the matter of Majestic Towers Flat Owners Association Anr. Vs. Housing Development and Infrastructure Ltd. Ors. Comp. App. (AT) (Ins.) No. 980/2021 , has held that Project Wise Insolvency can be granted to bring about better Resolution and prevent Liquidation as the sufferers would be the Homebuyers who are thousands in numbers in different Projects and if there is a possibility of Project Wise Resolution, reasonable time could be allowed by the Adjudicating Authority to bring about a proper Resolution. 23. The contention of the ERP/R-18 that another Bench of NCLT Bengaluru has erroneously admitted a Section 7 Application initiating CIRP against another Project namely Dreamz Sneh and that it has to be set aside, is completely unsustainable as the Order was passed in a separate Company Pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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