TMI Blog2023 (1) TMI 1366X X X X Extracts X X X X X X X X Extracts X X X X ..... nd heard before approval of any resolution plan dealing with the Project land or not - Resolution Professional acted within the ambit of I B Code in giving a certificate that Resolution Plans submitted by Roma Unicon Designex Consortium and Alpha Corp Development Private Limited are in accordance with the provisions of the Code or not - Appellant was aware of the development carried out by the Corporate Debtor on the lease land before commencement of the CIRP of the Corporate Debtor or not. Time Limitation - HELD THAT:- Reference made to the Judgement of Hon ble Supreme Court passed in IN RE: COGNIZANCE FOR EXTENSION OF LIMITATION [ 2022 (1) TMI 385 - SC ORDER ]. By the said order, the Hon ble Supreme Court held that in computing the period of limitation for petitions/applications/appeals/suits, the period from 15/03/2020 to 28/02/02022 shall stand excluded. Hon ble Supreme Court further held that in case where the limitation would have expired during the period 15/03/2020 to 28/02/2022 notwithstanding the actual balance period of limitation, all person shall have a limitation period of 90 days i.e. from 01st March, 2022 to 29th May, 2022. As per the judgement of the Hon ble Suprem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een all parties including the lessee within the ambit of IBC. The law is well settled that subsidiary company and the holding company are separate entities. Learned Counsel for the Appellant in the above reference has relied on Judgement of the Hon ble Supreme Court in MRS. BACHA F. GUZDAR, BOMBAY VERSUS COMMISSIONER OF INCOME-TAX, BOMBAY [ 1954 (10) TMI 2 - SUPREME COURT] . It was held by the Hon ble Supreme Court that shareholder does not acquire any interest in the assets of the company by purchasing shares of company. Thus the Corporate Debtor, who was lead member of the Special Purpose Company, was contemplated to be separate entity and the contention of the Respondent that both should be treated to be one entity cannot be accepted. It is further relevant to notice that Learned Counsel for the Respondents have also contended that Corporate Veil of the land holding company be pierced and should be lifted in the facts of the present case which will make it clear that it is the corporate debtor which is behind the land holding companies. Lifting of Corporate Veil between the subsidiary and parent company have been legally accepted proposition. The Judgement of the Hon ble Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest - In the present case, in the Information Memorandum, it clearly gives the details of status of the project land which indicates that no project is complete. The apartment as contemplated in 2010 Act are not even in existence in the facts of the present case hence there is no question of applicability of Section 5 - The present is not a case where any apartment has been transferred in favour of the allottees. The submission made on behalf of the SRA relating to 2010 Act are misconceived. Whether the Appellant was required to be made party to the CIRP proceedings and heard before approval of any resolution plan dealing with the Project land? - HELD THAT:- The Appellant s case in these Appeals are that Appellant was not issued any notice by the Adjudicating Authority for participation in the CIRP Process. From the facts, it is clear that the Resolution Professional wrote a letter asking certain information from the Appellant and thereafter only informed about the approval of the Resolution Plan, at no point of time the Appellant was asked to participate in the CIRP Process of the Corporate Debtor. The Resolution Plan which was approved by the Committee of Creditors on 26.08. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r invited attention of the Appellant that Appellant s dues are not being taken care in resolution plan. The Resolution Professional did not act within the ambit of the Code while certifying that Resolution Plan submitted by Roma Unicon Designex consortium and Alpha Corp Development Private Limited is in accordance with the provisions of the Code - Registry is directed to forward the Copy of this Order to IBBI to examine the work and conduct of RP and take such action as it may deem fit and proper. Whether Appellant was aware of the development carried out by the Corporate Debtor on the lease land before commencement of the CIRP of the Corporate Debtor? - HELD THAT:- The lease deed clearly cast an obligation on the Appellant to monitor the implementation of the project. It has been the case of the association of allottees that they have time and again brought to the notice of the Appellant about the misdeeds of the corporate debtor. Reference to BuilderBuyers meeting held on 20th May, 2016 has also been made - The allottees has brought into the notice of the Appellant about the grievances which they were facing due to delay in the project causing financial distress and mental distre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or R-1/SRA Mr. Vivek Kohli, Sr. Advocate with Mr. Sandeep Bhuraria, Ms. Parijat Singh, Mr. Arinjay Singh, Advocates for R-2. Mr. Arshdeep Singh Khurana, Mr. Hitesh Rai, Mr. Harsh Mittal, Advocates for R-3. Mr. M.P. Sahay, Ms. Awantika and Mr. Sachin Kharb, Advocates for Homebuyers. Mr. Akshya Makhija, Sr. Advocate, Mr. Shashank Raghav, Ms. Shubhangini Yadav, Advocates for Intervenor. Mr. Abhishek Anand, Mr. Nipun Gautam, Mr. Sajal Jain, Mr. Sandeep Bhuraria, Ms. Parijat Singh, Mr. Arinjay Singh, Advocates for R-2. Mr. Abhijeet Sinha, Ms. Charu Sangwan, Mr. Krishna Raj, Mr. Saikat Sarkar, Advocates for R-6 Mr. Akshya Makhija, Sr. Advocate, Mr. Shashank Raghav, Ms. Shubhangini Yadav, Advocates for Intervenor. JUDGMENT ASHOK BHUSHAN, J. These three Appeal(s) filed by the same Appellant challenges orders passed by the National Company Law Tribunal, Delhi Bench III, arising out of same Corporate Insolvency Resolution Process, have been heard together and are being decided by this common judgment. 2. The Company Appeal (AT) (Insolvency) No. 630 of 2022 has been filed against the order dated 05.04.2021 passed by Adjudicating Authority on the Application filed by Resolution Professional ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Lease Deed dated 01.09.2010 M/s Earth Towne Infrastructures Pvt. Ltd. was to develop and market the project on demarcated Plot No.GH-04, Sector 01, Greater Noida. The Lease Deed was executed for consideration of the total premium of Rs.74,26,95,000.00 and 10% premium was paid. Balance 90% premium was to be Company Appeal (AT) (Insolvency) Nos.180, 629 630 of 2022 7 payable in 16 half-yearly instalments. Interest @ 12% per annum was to be paid after 24 months. (v) After the execution of the Lease Deed on 01.09.2010 an unregistered Development Agreement dated 09.09.2010 was entered between Earth Towne and Earth Infrastructures Ltd., where First Party Earth Towne was to develop the land. The development rights were given to the Earth Infrastructures Ltd. by the Development Agreement. The Development Agreement also stipulated that Earth Towne shall remain the lease right holder of the Scheduled Land and the Second Party shall only have the permission to enter into the Scheduled Land only for carrying out the development/ construction activities, as a Licensee. The area sharing ratio between Earth Towne and Earth Infrastructures Ltd. was 18% and 82%. On an application made by Lessee - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Corporate Debtor on 19.04.2019. Thereafter on 22.05.2019. while issuing Expression of Interest the Resolution Plans were invited for the entire Project of the Corporate Debtor, individually or collectively. (xi) The Appellant on 18.09.2019 has sent a letter to RP claiming dues on the subsidiary of the Corporate Debtor namely Earth Towne for an amount of Rs.148,37,46,148/-, arising out of the Lease Deed executed on 01.09.2010. (xii) In pursuance of the request for Resolution Plan, Resolution Plans were submitted. Roma Unicon Designex Consortium filed its Resolution Plan for the Earth Towne Project, which Resolution Plan was approved by the Committee of Creditors ( CoC ) in their 14th Meeting held on 26.08.2019 with 100% voting share. The said Resolution Plan was subsequently on an Application filed by the RP has been approved by the Adjudicating Authority vide its order dated 05.04.2021. Alpha Corp Development Pvt. Ltd. submitted its Resolution Plan for four Projects. The Resolution Plan submitted by Alpha Corp Development Pvt. Ltd. was approved in 19th Meeting of the CoC held on 11.11.2019. On an Application filed by Resolution Professional, the Adjudicating Authority vide its orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which Appeal was dismissed on 14.07.2022. 6. We have heard Shri Krishnendu Datta, learned Senior Counsel appearing for Appellant with Shri Manish Kumar Srivastava and Shri U.N. Singh; Shri G.P. Madaan, learned Counsel appeared for RP. We have heard learned Counsel appearing for Successful Resolution Applicants in both the Appeals. We have also heard Shri Abhijeet Sinha, learned Counsel appearing for Earth Towne Flat Buyers Welfare Association. We have also heard other Counsel appearing for the other Respondent(s) and Intervenors. 7. Before proceeding to notice the respective submissions of learned counsel for the parties, we may briefly note the case taken up by the Appellants, Respondents and Intervenors in these Appeals. Company Appeal (AT) (Ins.) No. 630 of 2022 8. The Appellant s case is that a registered Lease Deed dated 01.09.2010 was executed in favour of Earth Towne Infrastructure Pvt. Ltd. in respect of Plot No. GH- 04, Sector-01, Greater Noida admeasuring 73942.00 Sq. meter. The property was allotted in favour of a consortium comprising of Earth Infrastructures Limited as lead member and Raus Infra Ltd. and Shalini Holding Ltd. On the request of the consortium Special Pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s liable to pay an amount of Rs.215,87,18,190/-. The Resolution Plan is in clear disregard of the terms and conditions of the Lease Deed. The Adjudicating Authority has granted certain waiver in Para 15 in utter disregard of the law. The order passed by the Adjudicating Authority dated 05.04.2021 is also in violation of the principles of natural justice since neither any notice was received from the Adjudicating Authority at the time of approval of the Resolution Plan nor Resolution Professional informed about the Resolution Plans. The CoC is not competent to consider and vote on the property which do not belong to the Corporate Debtor. The Development Agreement dated 09.09.2010 entered between the Corporate Debtor and the Lessee - Earth Towne, being an unregistered document cannot be enforced against the Appellant which was not party to the Development Agreement. The Appellant could not have been directed to transfer the lease hold rights. No consent or approval was taken from the Appellant for transfer of lease hold right in favour of the Successful Resolution Applicant. 9. A reply has been filed by the Resolution Professional, Respondent No.1. The Resolution Professional in his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.09.2010. The Appellant was, however, not vigilant to either follow up the matter or file application before the Adjudicating Authority for non-admission of its claim. The Resolution Plan refers to the dues of the Appellant and claims relief in terms of entire dues. The Approved Resolution Plan is binding on all stakeholders including the Appellant. 10. The Successful Resolution Applicant i.e. Roma Unicon Designex Consortium (Respondent No.2) after narrating the details of allotment and lease deed pleads that Special Purpose Company namely Earth Towne Infrastructure Pvt. Ltd., a wholly owned subsidiary of the Corporate Debtor, was formed after the allotment of land. The Earth Towne Infrastructure Pvt. Ltd. was incorporated for sole purpose of obtaining lease rights. Part consideration was paid by the Corporate Debtor including stamp duty. The responsibility of project implementation and payment to the Appellant lies with the Corporate Debtor. As per the Development Agreement, the Corporate Debtor was responsible for construction activities and Earth Towne Infrastructure Pvt. Ltd. was entitled for 18% of the developed real estate units. Development Agreement does not require any re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Earth Towne project. It has been submitted that Appellant has also filed a claim of Rs.148,37,46,148/- on account of dues of Earth Towne. Even though the claim is filed in the name of Earth Towne, the liability to pay the debt of the Appellant lies with the Corporate Debtor as the Corporate Debtor was responsible to arrange finance. It is submitted that there is irreparable loss incurred to the Home Buyers due to incompletion of the project. The Home Buyers are suffering huge loss monthly. The Resolution Professional has admitted claims of 1878 unit holders amounting to Rs.438 crores. Since Home/Flat Buyers could not receive possession of their respective apartments, many of them are forced to live in rental houses for the past 10 years which has caused an exponential burden on their financial, physical and mental health. It is submitted that members of the Earth Towne Flat Buyers Welfare Association had meeting with the Additional CEO of the Appellant on 28.06.2017, even before CIRP was initiated. Members of Respondent No.3 has expressed their resentment about the non-fulfilment of obligations by the Appellant towards the project Earth Towne but Appellant never took any step t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remium and lease rent default notices were served dated 09.01.2019 on Nishtha Software Pvt. Ltd. The default notice dated 09.01.2019 was also issued on Neo Multimedia Pvt. Ltd. Several notices to both the Lessees were issued thereafter. As on 24.03.2022, Neo Multimedia Pvt. Ltd. is liable to pay an amount of Rs.19,76,10,064/- and as on 25.03.2022, Nishtha Company Appeal (AT) (Insolvency) Nos.180, 629 630 of 2022 21 Software Pvt. Ltd. is liable to pay an amount of Rs.11,15,15,009/-. Further, amount towards lease rent and towards additional compensation is payable by the lessee. The CoC of the Corporate Debtor had no power and jurisdiction to deal with the Lessee s property. The properties which were leased out to Neo Multimedia Pvt. Ltd. and Nishtha Software Pvt. Ltd. could not have been considered in CIRP of the Corporate Debtor namely Earth Infrastructure Ltd. which is A completely separate legal entity. Under the terms of the Lease Deed, no permission has ever been granted to transfer the leased land. The Subsidiary company, which was land holding company was a separate legal entity and the leased land cannot be held to be belong to the Corporate Debtor in any manner. The Adjudic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant were mentioned. The Appellant was well aware of the initiation of CIRP against the Corporate Debtor. Company Appeal (AT) (Insolvency) Nos.180, 629 630 of 2022 23 Resolution Plan refers to the dues of the Appellant and seeks waiver from payment of the dues. 15. Reply has also been filed by Alpha Corp Development Pvt. Ltd. Successful Resolution Applicant (Respondent No.2). In the reply filed by the Successful Resolution Applicant, all relevant documents including the Information Memorandum has been brought on record. The Successful Resolution Applicant has given details of the project, name of the land owning company with regard to projects Earth Sapphire Court and Earth Tech-one. The land owning companies are wholly owned subsidiary companies of the Corporate Debtor. After decision of the CoC in 8th meeting held on 20.05.2019 inviting project-wise resolution plans, the Respondent No.2 submitted plan for both the projects viz. Earth Sapphire Court and Earth Tech-one. The Resolution Plan was submitted by the Successful Resolution Applicant on 16.09.2019 and thereafter it submitted a revised Resolution Plan on 15.10.2019. The plan was circulated to the CoC on 18.10.2019 and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or and almost 100 buyers of different projects, where the CEO of the GNIDA gave warning for action against the Corporate Debtor in case it does not resolve the grievances of the investors. A complaint was filed to Economic Offences Wing, Delhi Police and after preliminary investigation FIR No.43/2016, 111/2016, 112/2016 113/2016 were registered against the Corporate Debtor and its officials. The investors gave a representation on 27.07.2016 to the Appellant praying to take strict action against the Corporate Debtor. Investor also met with CEO of the Appellant. Meeting was also held on 08.05.2017 and 16.05.2017. The Appellant did not take any action against the Corporate Debtor and thereafter on 06.06.2018 CIRP was initiated against the Corporate Debtor. On 11.11.2019, the plan submitted by Alfa Corp Development Pvt. Ltd. was approved by the CoC. The Appellant had many opportunities to work towards solution and revival of the project as well as it has authority to take any action against the Corporate Debtor but it did not take any action. A timely action could revive the project and save the hard earned money of real estate buyers. Presently, when the Successful Resolution Applican ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Resolution Plan. The RP has not discharged his duties in accordance with the provisions of the Code while giving a certificate that Resolution Plan complies with the provisions of the Code. The Resolution Plan could not have dealt with the land of the Appellant, which was not asset of the Corporate Debtor and only assets of the Corporate Debtor can be made subject in the Resolution Plan. The Adjudicating Authority also failed to apply its mind and ignored the vital fact while approving the Resolution Plan. The mere fact that Corporate Debtor has written certain letters to the Appellant containing information about the Project, does not in any manner mean that Appellant was aware of the nefarious manner in which the Appellant s land was sought to be dealt with by the Corporate Debtor and the Resolution Applicants. The Resolution Plan deserves to be rejected. The transfer of land of the Appellant in favour of any other entity requires prior approval of the Appellant. The Information Memorandum, which was prepared by RP did not mention that lease lands were owned by Corporate Debtor or that lease hold rights were owned by the Corporate Debtor. The lease lands are valuable lands. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver the five projects. It is submitted that the Information Memorandum has also given details of the claim which was received from the Appellant. The Resolution Professional has also shared the letter of its dues of Rs.148,37,46,148/- received from the Appellant claiming to be dues of Earth Towne. It is submitted that it was the Corporate Debtor which was making all payments against the Lease Deed dated 01.09.2010 and Earth Towne was nothing but alter ego of Corporate Debtor. Appellant was not vigilant of its claim. Appellant was well aware of the insolvency process which was initiated against the Corporate Debtor. The Successful Resolution Applicant had sought relief in respect of dues of the Appellant which was accepted by the Adjudicating Authority. The Resolution Plan Para 4.1.6 refers to dues of GNIDA and Para 18.2 refers to reliefs claimed by Resolution Applicant were mentioned. Resolution Plan is binding on the Appellant. 20. We have heard Shri Abhishek Anand and Mr. Sandeep Bhuraria, learned counsels appearing for Successful Resolution Applicant. Shri Abhishek Anand, learned counsel appearing for Roma Unicon Designex Consortium submitted that the land does not belong to Gre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Appellant in favour of the wholly owned subsidiary companies of the Corporate Debtor, namely M/s Neo Multimedia Limited and M/s Nishta Software Private Limited respectively. 22. Shri Abhijeet Sinha, learned counsel appearing for Earth Towne Flat Buyers Welfare Association submitted that property as defined under Section 3(27) of the Code is very wide definition. The statute does not exclude development rights from the definition of property. It is submitted that initially allotment of land by the Appellant was in favour of the Consortium of which Corporate Debtor is the lead member. Corporate Debtor has 98% shareholding of the Earth Towne Infrastructure Pvt. Ltd. Company Appeal (AT) (Insolvency) Nos.180, 629 630 of 2022 32 Learned counsel submitted that the Appellant was well aware that Earth Infrastructure Ltd. is developing the land and is the developer carrying out the construction. Learned counsel has referred to letter written by the Appellant to Police Authorities in the year 2015 when the letter was sent by the developer Corporate Debtor to the Greater Noida when construction was being interfered with by certain miscreants. It is submitted that the flat owners had ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ten by Earth Infrastructures Ltd. to the Appellant that as per Clause 8(e) of Application Form, a Special Purpose Company (SPC) Earth Towne Infrastructure Pvt. Ltd. was formed for the purpose of getting Lease Deed executed and registered in favour of Earth Towne Infrastructure Pvt. Ltd. The Appellant approving the request of M/s Earth Infrastructures Ltd. executed the Lease Deed in favour of M/s Earth Towne Infrastructure Pvt. Ltd. to develop and Company Appeal (AT) (Insolvency) Nos.180, 629 630 of 2022 34 market the Project on demarcated Plot. The Lease Deed dated 01.09.2010 contained following statement . AND WHEREAS the Lessor approved the name and status of M/s Earth Towne Infrastructures Pvt. Ltd. on the request of consortium members (as mentioned above) in accordance with the clause= C-8(e) of the brochure of the scheme, to develop and market the project on demarcated plot No.GH-04, Sector-01, GREATER NOIDA measuring 73942.00 sq. mtrs. . The Lease Deed further contained a statement that Special Purpose Company comprising of (1) M/s Earth Infrastructures Ltd., 78% shareholding, Lead Member; (2) M/s Raus Infras Ltd., 11%, Relevant Member; and (3) M/s Shalini Holdings Ltd., 11%, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lease period. This option may be exercised at any time during the lease period, provided the Lessee has paid the earlier lease rent due and lease rent already paid will not be considered in One Time Lease Rent option. b) The Lessee shall be liable to pay all rates, taxes, charges and assessment leviable by whatever name called for every description in respect of the plot of land or building constructed thereon assessed or imposed from time to time by the Lessor or any Authority/ Government. In exceptional circumstances the time of deposit for the payment due may be extended by the Lessor. But in such case of extension of time an interest @ 15% p.a. compounded every half yearly shall be charged for the defaulted amount for such delayed period. In case Lessee fails to pay the above charges it would be obligatory on the part or its members/ sub Lessee to pay proportional charges for the allotted areas. c) The Lessee shall use the allotted plot for construction of Group Housing/ flats/ plots. However, the Lessee shall be entitled to allot the dwelling units on sublease basis to its allottee and also provide space for facilities like Roads, Parks etc. as per their requirements, convenie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9.2010. The Development Agreement was an unregistered document executed on a stamp paper of Rs.50. In the Agreement, First Party was Earth Towne Infrastructures Pvt. Ltd. and Second Party was Earth Infrastructures Ltd. It is useful to extract Clauses D, E and F of the Development Agreement, which are to the following effect: D. The First Party is suitably authorised to develop, construct market and sale/ sub-lease the said scheduled Land. E. The Second Party is engaged in the business of; inter alia, development and construction of real estate projects. F. The Second Party has approached the First Party and has expressed its willingness to develop the said Scheduled Land. Further, A Memorandum of Understanding (MOU) dated 22.07.2010, had been executed between the parties in this regard. Whereby, the First Party has agreed to acquire/buy Scheduled Land and the Second Party has agreed to give financial support /loan to the First Party for acquiring /buying Scheduled Land and in Lieu, the same the Second Party shall have Development Right on the Scheduled Land. 28. The Corporate Debtor Earth Infrastructures Ltd., after the execution of the Lease Deed proceeded to advertise the three p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 20911.24 sq. mts. With a total built up area of 73480.30 sq. mts approx. The neighbourhood of the subject property is Institutional Land/ Industrial land / Residential Land. Institutes like NIIMS, Millineaum School are in vicinity Statement of Built up Area S. No. Floor Built up Area as recorded (approx.. in sq. mt.) (A). Basement 1 12613.0 2. Basement 2 12077.0 3. Ground Floor 6428.6 4. First Floor 6428.6 5. Second Floor 6428.6 6. Third Floor 6428.6 7. Fourth Floor 6428.6 8. Fifth Floor 3494.0 9. Sixth Floor 3218.0 10. Seventh Floor 1514.0 11. Eight Floor 945.7 12. Ninth Floor 945.7 13. Tenth Floor 945.7 14 . Eleventh Floor 945.7 15. Twelfth Floor 945.7 16. Thirteenth Floor 945.7 17. Fourteenth Floor 945.7 18. Fifteenth Floor 945.7 19. Sixteenth Floor 945.7 Total Built up Area 73480.30 sq. mts. Approx. Present Condition of Buildings Structure work is completed; Brick work is done on some floors. In some floors brick work has been dismantled. Flooring is there in some parts of the building. Plaster on some floors has also been done. In some parts Glass Glazing has been done on the fa ade. 3) Earth Tech One S. No. Particulars Remarks 1. Name of Land Owner M/s Neo Multimedia Limite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Floors is also having partition walls done but mostly structures are bare. The access to some blocks like Residential is not developed. No finishing works in any of the blocks. 4) Earth Towne S. No. Particulars Remarks 1. Name of Land Owner M/s Earth Infrastructure Ltd M/s Raus Infras Limited M/s Shalini Holdings Limited 2. Name of Developer M/s Earth Infrastructure Limited 3. Source Documents Memorandum of understanding Dr. 12/02/2010 between M/s Earth Infrastructure Limited M/s Raus Infras Limited M/s Shalini Holdings Limited 4. Brief description of property Under Construction Property (Land Building), Group Housing Project 5. Location Plot no.4, Sector no.1, Greater Noida 6. Is property situated in residential/ Commercial/ Mixed area or Industrial Area Residential Area 7. Land Area 73492.00 sq. Mts. 8. Is the property free hold or lease hold Lease hold 9. Name of the lessor/ lessee, nature of lease, date of commencement, termination of lease Lessor : Greater Noida Industrial Development Authority (GNIDA) Lease Date : 01/09/2010 Time Period : 90 years 10. Annual Lease Rent to be paid yearly Not known The Subject property is under construction having 16 unfinished towers out of wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addressed to M/s Earth Towne Infrastructures Pvt. Ltd., which has been brought on record of the Appeal dated 04.04.2019, 01.05.2020, 29.01.2020 and 16.07.2019. The notice dated 04.04.2019 issued by the Appellant reads: GREATER NOIDA INDUSTRIAL DEVELOPMENT AUTHORITY Administrative Office Plot No. 01, Sector Knowledge Park-04, Greater Noida City, District Gautambudh Nagar, UP Website: www.greaternoidauthority.in Letter: G.N./Builders/2019/ 365 Dated: 4th April, 2019 Managing Director, M/s. Earth Towne Infrastructures Pvt. Ltd., B-l00, 2nd Floor, Naraina Industrial Area, Phase-l, New Delhi - 110 028 NOTICE BEFORE CANCELLATION It is to inform that Greater Noida Industrial Development Authority has allotted to you Builders Residential Group Housing Plot of Land No. GH-04, Sector-01, Lease Deed of which has already got executed in your favour. According to the conditions of the Allotment Letter/ Lease Deed, you were required to make the payments of the due installments of the plot of land, but since you have not made the payment of the due amount within the stipulated period of time, in respect of the above plot of land, at present principal amount of the installment Rs.85,10,04,645/- an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CoC on 07.08.2019. 34. We may also notice at this stage certain portion of the Resolution Plan approved by Adjudicating Authority by order dated 05.04.2021, which relates to the dues of the Appellant. Paragraph 4.1.6 of the Resolution Plan submitted by Roma Unicon Designex Consortium provides as follows: 4.1.6 Dues towards NOIDA Authority: (@Page 12 of the Resolution Plan) It has been observed that in the list of claims filed and admitted as per the IM, the same does not include dues payable to Greater NOIDA authorities (GNIDA). RUD has an understanding that the same is due in case of the wholly owned subsidiary Earth Towne Infrastructures Pvt. Ltd., i.e. the Land holding company and no tin Earth Infrastructures Limited. Further RUD has an understanding that the land holding company Earth Towne Infrastructures Pvt. Ltd. is not under CIRP proceedings. Further RUD has an understanding that in order to effectively execute the proposed resolution plan, the same cannot be done without GNIDA transferring the land in the manner as proposed in this plan from Earth Towne Infrastructures Limited, resulting into a situation, wherein the GNIDA may file a suit for its claims if any. As per the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sortium has issued following directions in paragraph-15: 15. All waivers, Reliefs, Concessions and exemptions as prayed for in the Resolution Plan by the Resolution Applicant(s) fall within the parameters of I B Code, 2016, and other applicable laws. Therefore, to the extent Earth Towne project with effect from the plan approval date, all inquiries, investigation and proceedings, whether civil or criminal, suits, claims, disputes, interests and damages in connection with the Corporate Debtor or the affairs of the Corporate Debtor and its related subsidiary, pending or threatened, present or future in relation to any period prior to the plan approval date, or arising on account of implementation of this resolution plan shall stand withdrawn, satisfied and discharged including that of Greater Noida Authority. From the date of approval of the Resolution Plan , the Resolution Applicant(s) shall be legally authorised to seek transfer of project land, title, interest including all rights from Greater Noida Authority, and appropriate orders from respective authorities/ courts/ tribunals for renewal of licences/ withdrawal/ dismissal or abatement of the proceeding as the case may be. Furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection raised on behalf of Successful Resolution Applicant and Flat Buyer Association regarding the delay in filing the Appeal. It is stated in the Reply that Order was passed on 05th April, 2021 and the Appeal has been e-filed on 24th May, 2022 and physically filed in this Tribunal on 26th May, 2022. We need to refer the Judgement of Hon ble Supreme Court passed in Suo Moto Writ Petition No. 03 of 2020 dated 10th January, 2022. By Order dated 10th January, 2022, the Hon ble Supreme Court held that in computing the period of limitation for petitions/applications/appeals/suits, the period from 15/03/2020 to 28/02/02022 shall stand excluded. Hon ble Supreme Court further held that in case where the limitation would have expired during the period 15/03/2020 to 28/02/2022 notwithstanding the actual balance period of limitation, all person shall have a limitation period of 90 days i.e. from 01st March, 2022 to 29th May, 2022. As per the judgement of the Hon ble Supreme Court as above, the period of limitation for filing the Appeal expiring between 15th March, 2020 to 29th May, 2022 and appeal having been filed within 90 days period as provided by the said order, the Appeal Company Appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) assets that may or may not be in possession of the corporate debtor; (iii) tangible assets, whether movable or immovable; (iv) intangible assets including intellectual property; (v) securities including shares held in any subsidiary of the corporate debtor, financial instruments, insurance policies; (vi) assets subject to the determination of ownership by a court or authority; (g) to perform such other duties as may be specified by the Board. Explanation. For the purposes of this section, the term assets shall not include the following, namely (a) assets owned by a third party in possession of the corporate debtor held under trust or under contractual arrangements including bailment; (b) assets of any Indian or foreign subsidiary of the corporate debtor; and (c) such other assets as may be notified by the Central Government in consultation with any financial sector regulator. 44. The IRP has to collect all information relating to the assets, finances and operations of the Corporate Debtor for determining the financial position of the Corporate Debtor, including information relating to liabilities on the date of initiation of CIRP. Section 18 uses the expression assets , finances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion is that the assets of the subsidiary Company cannot be dealt with, in CIRP of a holding Company. Holding Company and subsidiary Company have separate legal status and the assets of subsidiary Company cannot be taken into consideration. 45. The learned Counsel for the Appellant has also relied on the judgment of the Hon ble Supreme Court in (2020) 13 SCC 308 Embassy Property Developments Private Limited vs. State of Karnataka and Ors., where the Hon ble Supreme Court had occasion to notice the provisions of Section 18 of the Code. In the above case, the Corporate Debtor had a mining lease granted by Government of Karnataka, which was to expire on 25.05.2018. Notice for premature termination of lease had already been issued on 09.08.2017. The IRP wrote a letter to Director of Mines seeking the benefit of deemed extension of lease, which was rejected by the State of Karnataka. The IRP has initially filed a Writ Petition in the High Court of Karnataka seeking a declaration that mining lease should be deemed to be valid upto 31.03.2020, which Writ Petition was subsequently withdrawn and thereafter Resolution Professional moved an Application before the NCLT, praying for set-aside th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sis supplied) This shows that wherever the corporate debtor has to exercise rights in judicial, quasi-judicial proceedings, the resolution professional cannot short-circuit the same and bring a claim before NCLT taking advantage of Section 60(5). 46. The Hon ble Supreme Court clearly noted that assets owned by third party, which is in possession of the Corporate Debtor under contractual arrangements, is specifically kept out of the term of assets under the explanation to Section 18. In paragraph 42 of the judgment, the Hon ble Supreme Court has noticed that Resolution Professional knowing well that NCLT had no jurisdiction in the matter had initially filed Writ Petition in the High Court. In paragraph 42 following observation has been made: 42. In fact the resolution professional in this case appears to have understood this legal position correctly, in the initial stages. This is why when the Government of Karnataka did not grant the benefit of deemed extension, even after the expiry of the lease on 25-5-2018, the resolution professional moved the High Court by way of a writ petition in WP No. 23075 of 2018. The prayer made in WP No. 23075 of 2018 was for a declaration that the min ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at NCLT did not have jurisdiction to entertain an application against the Government of Karnataka for a direction to execute supplemental lease deeds for the extension of the mining lease. Since NCLT chose to exercise a jurisdiction not vested in it in law, the High Court of Karnataka was justified in entertaining the writ petition, on the basis that NCLT was coram non judice. 47. The above judgment of the Hon ble Supreme Court clearly lays down that for asset, which is not the asset of the Corporate Debtor, there will be no jurisdiction with the NCLT to deal with lease hold rights. 48. This Tribunal in Company Appeal (AT) (Insolvency) No.229 of 2018 M/s Dynepro Pvt. Ltd. vs. Mr. V. Nagarajan decided on 30.01.2019, after noticing the provisions of Section 18 in paragraph 17, has made following observation: As per the explanation for the purpose of Section 18(1), the term assets do not include assets owned by a third party in possession of the corporate debtor held under contractual arrangements including bailment. It also do not include assets of any Indian or foreign subsidiary of the corporate debtor and such other assets as may be notified by the Central Government. 49. This Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecuted by the Appellant in favour of land holding Company, it is clear that contractual Agreement was between the Lessor and Lessee. The Resolution Plan seeks to transfer, not only the development rights on the Project land, but also the title of the land in favour of third entity, without obtaining prior approval of the Lessor. Transfer of land by the Lessor was subject to Clauses of the Lease Deed and permission to transfer the land could have been granted by the Appellant on fulfilment of various conditions enumerated therein. The Resolution Plan contains a provision where the Appellant is obliged to transfer the Project land in favour of the Successful Resolution Applicant. 51. The Resolution Plan does not confine itself to the development rights, which were granted by the land owning company in favour of the Corporate Debtor on an unregistered Agreement, but also contemplates transfer of title of land in favour of Successful Resolution Applicant/ Special Purpose Company as contemplated in the Resolution Plan, which is an impermissible. The Development Agreement, which was unregistered document, could not have dealt with any right in the Project land and the lease hold right as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k consent of the NOIDA Authority for a Resolution Plan. The Order of the Adjudicating Authority which was under challenge in the case of Nilesh Sharma, RP (supra) has been noted in paragraph 1 of the Judgement which is to the following effect: 1. Challenge in this Company Appeal Insolvency No. 288 of 2021 is to the Common Impugned Order dated 02/03/2021 passed by the Learned Adjudicating Authority (National Company Law Tribunal, Division Bench, Delhi, Bench III), in IA 4538 of 2020 in IB 1771/ND/2018 filed by M/s. Victory Ace Social Welfare Society (hereinafter referred to as Victory Ace ) and IA 5050 of 2020 filed by New Okhla Industrial Development Authority , (hereinafter referred to as NOIDA ) respectively. By the Impugned Order, the Adjudicating Authority has allowed the IA filed by the Resolution Professional and dismissed I.A. 5050 of 2020 filed by NOIDA/the Appellant herein, observing as follows: 17. We are further in agreement with the contention of the Applicant/(that through the instrument of JDA, the CD has only right- inpersonam against the Lessee i.e., Logix and the said right of CD is limited developing the residential complex for which the allottees paid directly th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terests of homebuyers in terms of objective of the Code. Therefore, we are of the considered opinion that under the given facts and circumstances, NOIDA Authority is directed ton lodge its due claim with Resolution Professional as per law and participate in the CIRP process through duly Authorised person and attend all future CoC meetings participate in the discussions/ negotiations on the Resolution Plans submitted by prospective Resolution Applicants, and give consent to the Resolution Plan sought to be approved by the CoC. (Emphasis Supplied) 53. It is true that in the above case also, CIRP Process was initiated against the Corporate Debtor and not the Lessee of the Land and in the Resolution Process of the Corporate Debtor, the Adjudicating Authority directed Appellant-NOIDA Authority to file is claim and participate in the CIRP Process. The Adjudicating Authority while dismissing the Appeal has held that under the Development Agreement, the Corporate Debtor has proprietary right. This Tribunal also observed that no steps were taken by the Appellant to cancel the lease deed. Further this Tribunal held that the Tribunal vide Order dated 07th April, 2021 rejected the prayer of fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pra) has been challenged before the Hon ble Supreme Court by filing Civil Appeal No. 4665 of 2022 in New Okhla Industrial Development Authority Vs. Nilesh Sharma Anr where Hon ble Supreme has issued notice on 25.07.2022 and has passed following order: Issue notice. Mr. Karan Batura, AOR accepts notice on behalf of respondent no.1. Let Lessee (M/s. Logix City Developers Pvt. Ltd.) be made a party respondent. Let notice be issued to respondent no.2 and added respondent, returnable on 29.08.2022. Dasti, in addition, is permitted to be served. After we have heard the learned Counsel for the parties, before we proceed with the matter further, let the Resolution Professional represented by Mr. Dewan may revisit the Resolution Plan and furnish the revised proposal to the appellant which may take care of their interest as well by 12.08.2022. A joint meeting thereafter be held with the senior authorized officers of the New Okhla Industrial Development Authority (NOIDA), Resolution Professional, including the resolution applicant and others, if required, so as to find out some amicable solution, including the Lessee (M/s. Logix City Developers Pvt. Ltd.) within the ambit of IBC, if possible, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shareholder has got no interest in the property of the company though he has undoubtedly a right to participate in the profits if and when the company decides to divide them. The interest of a shareholder vis-a-vis the company was explained in the Sholapur Mills Case. That judgment negatives the position taken up on behalf of the appellant that a shareholder has got a right in the property of the company. 58. We may further notice the scheme which was floated by Appellant for allotment of land and the terms and conditions of the lease deed. The lease deed itself contemplated formation of separate Special Purpose Company for carrying out the development on the allotted land. As noted above, allotment of land under Earth Towne was made in the name of three companies namely M/s. Earth Infrastructures Limited being lead member, the purpose and object of the allotment was for development of land for purposes of urban planning hence the scheme of the allotment insisted for formation of Special Purpose Company so as NOIDA Authority may deal with said Special Purpose Company to carry out the development. The lease deed further contemplated that lead member shall continue to always possess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the date of submission of the tender) shall continue to hold at least 51.00% of the shareholding and the Lead Member shall remain unchanged till the occupancy/completion certificate of at least one phase of the project is obtained from the Lessor. 59. Thus the Corporate Debtor, who was lead member of the Special Purpose Company, was contemplated to be separate entity and the contention of the Respondent that both should be treated to be one entity cannot be accepted. It is further relevant to notice that Learned Counsel for the Respondents have also contended that Corporate Veil of the land holding company be pierced and should be lifted in the facts of the present case which will make it clear that it is the corporate debtor which is behind the land holding companies. Lifting of Corporate Veil between the subsidiary and parent company have been legally accepted proposition. Hon ble Supreme Court in Vodafone International Holdings BV Vs. Union of India and Anr. [2012 6 SCC 613]. In paragraph 254-258, has noted the legal principle with regard to relationship between subsidiary company and holding company which is as follows: 254. Companies Act in India and all over the world have s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lares it, to participate in the liquidation proceeds and to vote at the shareholders' meeting. Refer also to Carew and Company Ltd. v. Union of India and Carrasco Investments Ltd. v. Special Director, Enforcement. 258. Holding company, of course, if the subsidiary is a WOS, may appoint or remove any director if it so desires by a resolution in the General Body Meeting of the subsidiary. Holding companies and subsidiaries can be considered as single economic entity and consolidated balance sheet is the accounting relationship between the holding company and subsidiary company, which shows the status of the entire business enterprises. Shares of stock in the subsidiary company are held as assets on the books of the parent company and can be issued as collateral for additional debt financing. Holding company and subsidiary company are, however, considered as separate legal entities, and subsidiary are allowed decentralized management. Each subsidiary can reform its own management personnel and holding company may also provide expert, efficient and competent services for the benefit of the subsidiaries. 60. It was clearly held by the Hon ble Supreme Court relating to relationship b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terms of a contract, any tinkering with the contract in question, that is, the Concession Agreement, could not have been carried out without the approval and consent of the authority concerned, that is, YEIDA. Any doubt in that regard stands quelled with reference to Regulation 37 of CIRP Regulations that requires a resolution plan to provide for various measures including necessary approvals from the Central and State Governments and other authorities . The authority concerned in the present case, YEIDA, is the one established by the State Government under the U.P. Act of 1976 and its approval remains sine qua non for validity of the resolution plan in question, particularly qua the terms related with YEIDA. The stipulations/assumptions in the resolution plan, that approval by the Adjudicating Authority shall dispense with all the requirements of seeking consent from YEIDA for any business transfer are too far beyond the entitlement of the resolution applicant. Neither any socalled deemed approval could be foisted upon the governmental authority like YEIDA nor such an assumption stands in conformity with Regulation 37 of the CIRP Regulations. 142. Furthermore, the suggestion that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion by the Adjudicating Authority to transfer the lease land without the approval of the Appellant. 64. It is also relevant to notice one more judgement of the Hon ble Supreme Court which has been relied on by Learned Counsel for the Appellant i.e. Municipal Corporation of Greater Mumbai (MCGM) Vs. Abhilash Lal and Ors. [ 2020 13 SCC 234]. In the above case, Municipal Corporation of Greater Mumbai owned certain land in village Marol, Andheri (East), Mumbai. A contract was entered into with Seven Hills Health Care Pvt. Ltd. for development of the lease land and to construct 1500 bed hospital. The CIRP was initiated against the Seven Hills Health Care Pvt. Ltd. by Axis Bank where Resolution Plan was submitted by SNMC. Objections were raised by the Appellant to the approval of the plan which was rejected by NCLT and held that plan is in accordance with CIRP Regulations, 2016 and as per Section 29-A which was already approved by the CoC. The Order of NCLT was challenged before this Tribunal which Order was not interfered with by this Appellate Tribunal against which the Municipal Corporation filed an Appeal before the Hon ble Supreme Court. Hon ble Supreme Court had occasion to consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r obtained with regard to the proposal in the resolution plan. The proposal was approved by the NCLT and MCGM s appeal was rejected by NCLAT. The proposal could be approved only to the extent it did not result in encumbering the land belonging to MCGM. 36. It is evident from a plain reading of Section 92(c), that the Commissioner (of MCGM) is empowered to, with the sanction of the corporation, lease, sell or otherwise convey any immovable property belonging to the corporation. It is not in dispute that the original contract entered into on 20-12-2005 contemplated the fulfilment of some important conditions, including firstly, the completion of the hospital project within a time frame; and secondly, timely payment of annual lease rentals. It is a matter of record that the hospital project was scheduled to be completed by 24th April, 2013. MCGM cites Clause 15(g) of the contract to urge that within a month of this event, i.e. completion of the hospital, a lease deed had to be executed. This event never took place. Therefore, the terms of the contract remained, in the opinion of the court, an agreement to enter into a lease; it did not per se confer any right or interest, except that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Area Development Act, 1976. Resolution Plan thus was clearly in breach of the provisions of the 1976 Act which can not be sustained. 68. We have noticed the statutory provision, that Explanation to Section 18(1)(f) clearly contemplates that assets of subsidiary company are entirely different from assets of the holding company and principle of lifting of veil cannot be invoked contrary to statutory prescription as in the present case that is Section 18(1)(f). 69. Now on the question as to whether the Resolution Plan could have contained the provision obligating the Appellant to transfer lease hold right in favour of SRA or any third entity. It is sufficient to notice the terms and Company Appeal (AT) (Insolvency) Nos.180, 629 630 of 2022 90 conditions of the lease deed under wh ich land was leased out to the land holding company. For transfer of plot, lease deed contains following terms and conditions in lease dated 01.09.2010: TRANSFER OF PLOT 1. Without obtaining the completion certificate the Lessee shall have the right to sub-divide the allotted plot into suitable smaller plots as per planning norms and to transfer the same to the interested parties up to 31.03.2010 or as decid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A relying on Section 3 and Section 5 of Uttar Pradesh Apartment (Promotion of Construction, Ownership and Maintenance) Act, 2010 that allottees of project Earth Saphire Court and Tech One have heritable interest in the area of land leased by the Appellant from the date of execution of the respective apartment buyer agreement. Submission is that allottees themselves have become owner from the date of apartment buyers agreement has been executed. We may notice few provisions of Uttar Pradesh Apartment (Promotion of Construction, Ownership and Maintenance) Act, 2010. Section 3, subclause (b) defines apartment in following manner: Section 3(b), defines apartment means a part of any property, intended for any type of independent use, including enclosed spaces located on one or more floors or any part or parts thereof, in a building to be used for residential or official purposes or for the purpose of practicing any profession, or for carrying on any occupation, trade or business (excluding shopping malls and multiplexes) or for such other use as may be prescribed, and with a direct exit to a public street, road or to a common area leading to such street, road and includes any garage or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ebtor cannot be said to be apartment buyer agreement. Apartment Buyer Agreement is executed after completion and obtaining the completion certificate from the prescribed sanctioning authority. In the present case, in the Information Memorandum, it clearly gives the details of status of the project land which indicates that no project is complete. The apartment as contemplated in 2010 Act are not even in existence in the facts of the present case hence there is no question of applicability of Section 5. Section 5 of the Act deals with rights of apartment owners. Section 5(1) lays down following: 5 (1) Every person to whom any apartment is sold or otherwise transferred by the promoter shall subject to the other provisions of this Act, be entitled to the exclusive ownership and possession of the apartment so sold or otherwise transferred to him. 74. The present is not a case where any apartment has been transferred in favour of the allottees. We are of the view that submission made on behalf of the SRA relating to 2010 Act are misconceived. 75. In view of the aforesaid discussions, we answer question nos. 1, 2 and 3 in following manner: Ans. 1. In the CIRP Process of Corporate Debtor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel for the Appellant that they were necessary party in the CIRP process of the Corporate Debtor. It is to be noted that the Corporate Debtor was lead shareholder of the land holding company in case of Earth Towne Infrastructures Pvt. Ltd. it being 98% shares and with regard to other two land holding companies it had 100% shareholding. In the CIRP Process of such corporate debtor, the Appellant was necessary party and without they being before the CIRP Process the land leased out by them could not have been made subject matter of the Resolution Plan. We thus answer Question No. 4 in following manner: Ans. 4. Appellant was required to be made party to the CIRP Process before approval of any resolution plan dealing with project land. Question No. 5 77. The Resolution Professional was well aware that the project land is a leased out land which has been leased out by the Appellant to the land holding companies which fact has been clearly mentioned in the Information Memorandum. Information Memorandum also mentions few facts regarding the lease rent. Resolution Professional in his submission has also submitted before us that Resolution Professional has shared the details of the dues ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arties that in the year 2017, the associations of two projects namely Earth Sapphire Court and Earth Tech One met the additional Chief Executive Officer (CEO in short). Minutes of the proceedings were drawn by the association itself which have been brought on record which clearly indicate that appellants were aware that corporate debtor is developing the project. The letter written by the Appellant to the Police authorities in the year 2015 also indicate that appellants were aware that it is the corporate debtor who is developing the project land. We have also noticed that the lease deed contains provision under the heading other clauses clause 7 which is to the following effect: 7. The Lessor will monitor the implementation of the project. Applicants who do not have a firm commitment to implement the project within the time limits prescribed are advised not to avail the allotment. 81. The lease deed clearly cast an obligation on the Appellant to monitor the implementation of the project. It has been the case of the association of allottees that they have time and again brought to the notice of the Appellant about the misdeeds of the corporate debtor. Reference to BuilderBuyers mee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut the failure of the Corporate Debtor. A reply has also been filed by the Earth Towne Flat Buyer Association in Company Appeal (AT) Ins. No. 630 of 2022 where several other materials have been brought on record including complaints submitted to the Appellant regarding the failure of the corporate debtor. Complaint dated 20th June, 2017 filed as Annexure R-11 has been relied on by the Flat Buyers Association. It was mentioned that the home- buyers are paying bank EMI with interest as well as has paid huge amount to the Corporate Debtor. Reference of meeting with the CEO and Hon ble Minister dated 11th May, 2017 has also been referred. In the complaint, reference has also been made to an order of the Allahabad High Court dated 23rd February, 2016 where home-buyers have raised various grievances in the writ petition where Allahabad High Court has permitted home-buyers to represent the matter to the CEO which authority was to deal with the matter. It is stated in the complaint that after the order of the High Court dated 23rd February, 2016, they have approached the authorities but no action has been taken. We have already noticed while noticing the facts that in the meetings with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken without any principle or without any rule, it is unpredictable and such a decision is antithesis to the decision taken in accordance with the rule of law. 40. The Public Trust Doctrine is a part of the law of the land. The doctrine has grown from Article 21 of the Constitution. In essence, the action/order of the State or State instrumentality would stand vitiated if it lacks bona fides, as it would only be a case of colourable exercise of power. The Rule of Law is the foundation of a democratic society. (Vide: M/s. Erusian Equipment Chemicals Ltd. v. State of West Bengal Anr., AIR 1975 SC 266; Ramana Dayaram Shetty v. The International Airport Authority of India Ors., AIR 1979 SC 1628; Haji T.M. Hassan Rawther v. Kerala Financial Corporation, AIR 1988 SC 157; Shrilekha Vidyarthi etc. v. State of U.P. Ors., AIR 1991 SC 537; and M.I. Builders Pvt. Ltd. v. Radhey Shyam Sahu Ors., AIR 1999 SC 2468). 41. Power vested by the State in a Public Authority should be viewed as a trust coupled with duty to be exercised in larger public and social interest. Power is to be exercised strictly adhering to the statutory provisions and fact-situation of a case. Public Authorities cannot play fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be cleared. 90. We may also notice that during submissions, Learned Counsel appearing on behalf of Association of Flat Buyer Projects of Earth Sapphire Court and Earth TechOne submitted that they are ready to bear and pay the dues of the Appellant in the interest of the development of the projects. In the facts of the present case, we are of the view that the Appellant has not been diligent to take steps towards recovery of dues and are not entitled to charge any penal interest. We thus direct the Appellant to waive the penal interest and recalculate the dues of the Appellant which was due on the respective land holding companies as on date as held above. Ans. 7. 91. Looking to the stage at which the projects are as on date and looking to the fact that allottees have paid hundreds of crores rupees in the above three projects to the Corporate Debtor and waiting for possession of the flat for last several years, we have to find out ways and means to save the interest of the allottees as well as the interest of the Appellant. We are of the view that Resolution Professional jointly with Flat Buyer Association of respective projects be permitted to make an Application to the Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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