NCLAT - Creditors of a class for amended Section 7(1) threshold of 10% or 100 whichever is Lower must be from a particular project registered with RERA

Pankaj Mehta V/s M/s. Ansal Hi-tech Township Limited 

Company Appeal (AT) (INS) No. 248 of 2023 

(Arising out of the `Impugned Order’ dated 06.01.2023 in CP (IB) No. 596 (PB) / 2021)

NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI  

Time line of the Matter :-

1. The ‘Appellant / Financial Creditor / Applicant’, along with106 other ‘Financial Creditors / Applicants’, had preferred petition ,under Section 7 of the I & B Code, 2016 before NCLT PB New Delhi.
2.  Wherein, M/s. Ansal Hi-Tech Township Limited, was described as the ‘Corporate Debtor’ and the Total Amount of Debt, was mentioned as Rs.41,81,90,116/- 
3. On Date 06/01/2023, NCLT,  dismissed the main Company Petition as `Not Maintainable’ terming that the `Allottees’, belong to different Sub Projects.

Fact of the Case:- 

1. A Project by the name of  'Sushant Megapolis near Dadri Town, adjoining Greater Noida, Uttar Pradesh.  by Corporate Debtor M/s Ansal comprises of Plots / Built-up Plots/ Row Houses/ Flats / Floors /  Villas / High-rise Apartments, under various allocated Sites.
2. License for developing the Township, was granted  in Year2006, by the UP Government with the instruction of Entire Construction be completed by year 2016.
3. By 2016 the Project was incomplete and M/s Ansal registered 25 separate projects having separate `RERA Registrations’ in this Township with RERA.
4.  Appellants are 107 different Allottee  who purchased different types of Units such as Plots / Flats/ Apartments /EWS unit , in the Project.
5. The Possession date of all the allottees  was from 36 months to 42 months, from the date of sanction of the `Layout Plan’ of the `Allotted Unit’. 

Submissions by Appellant

1.  All the Applicants had entered into respective BBAs, much before the RERA Act,2016 came into force.
2.  The said `Agreements’, specifically, defines that `Sushant Megapolis’, as one complete `Project’.
3. The `Single Layout Plan of this project reflects Group Housing/ Plots and EWS Units as part of `One Project’, comprising of 2504 Acres of Property.
4. A Single  Application for Environmental Clearance, was filed for the entire project. 
5.  The Project in question, is a `Single Real Estate Project’, for the purposes of Section 7 of the IB Code, 2016.
6. It therefore, falls under the requisite ambit of the provisos of the amended Section 7(1) of the IB Code 2016 pertaining to the minimum threshold requirement of 100 Allottees or 10% of the Total Allottees, whichever is less, belonging to the `same Real Estate project’. 
7. The NCLT, Passed the impugned Judgment without considering the decision of Hon’ble Supreme Court in Manish Kumar v. Union of India & Ors  (2021) 5 SCC OnLine SCC 1, wherein, it is observed that a Real estate project can be a composite one for Plots and Apartments or for Plots & Buildings.
8. Further, the definition of `Allottee’, is split into broadly three Categories Plot, Apartment and Building and the `Purchasers’ of all these are covered under the term `Allottee’ 
9.  The interpretation, laid down by the was incorrect  that 100 or 10% of the `Allottees’, must be from the `same Building’, and `not from the same `Real Estate Project’.

Submissions by Respondent

1. The Township, consists of Multiple Residential  and Commercial Real Estate Project, and all the sub-projects, are independent of each other and are being developed and sold as separate Projects.
2. Each and Every phase, is registered as a stand-alone Real Estate Project under RERA with separate `RERA Registration Numbers’
3. As per Hon’ble Supreme Court of India, that the task of ascertaining who will be Allottees and therefore, what would constitute 10% of total number of Allottees must depend upon the nature of the `Real Estate Project’.
4.  The Petitioners do not satisfy the required threshold limit of 10% or 100 persons’, whichever is lower, in none of the Project / Project categories, 
5. Approximately 50 Petitioners are either Co-Applicants or Third Applicants for a Single Unit just to fulfill the requisite number of 100 Allottees. whereas in the matter of Manish Kumar v. Union of India, wherein, it is held that `one unit equals to one Allottees’, even though, the said Unit is jointly held. 
6. The NCLT  made ‘inquiry’ and considered all the records pertaining to the Project.

Observations made by the Hon’ble Court.

1. The Corporate Debtor, had executed, at least Three different kinds of Agreements, namely  (a) `Plot Allottee Agreement’ (b) `Built-up Unit Allottee Agreement’ and (c) `Apartment Allottee Agreement as the projects were of `different character’ with `different type of developments with independent, RERA Registrations. ’
2. In none of the Projects / Project Categories, the Applicants  fulfil the requirement of Threshold Limit’ of 10% or 100 persons, whichever is less. 
3. the Appellant are from different numerous projects, and they have not established their case, as `Creditors of a class’, concerning any `particular project’, registered with RERA, with a view to fulfil the requirement of  Section 7 (1) of the IBC in regards to 10% or 100 Allottees’
4. In the present case on hand, the foremost aspect to be taken into account is the RERA Registration of the Projects, of the Corporate Debtor, for ensuring the Initial limit for pressing into service of the ingredients of Section 7 of the Code. 
5. The `Impugned Order’ and the views expressed in dismissing the CP (IB) No. 596 (PB) / 2021, is free from any `legal flaws’. 

Court’s Order

Accordingly the instant `Appeal’ sans merits is `Dismissed’ with no costs.

In the Second Appeal , BOMBAY HIGH COURT upheld the Condonation of Delay granted by the MAHAREAT Stating that It is not unnatural for a flat purchaser, who had book the flat in 2011 and was yet to receive possession in 2018, to feel anxious especially when he was not permitted to inspect the flat.

In the Second Appeal , BOMBAY HIGH COURT  upheld the Condonation of Delay granted by the MAHAREAT Stating that It is not unnatural for a flat purchaser, who had book the flat in 2011 and was yet to receive possession in 2018, to feel anxious especially when he was not permitted to inspect the flat.

Lucina Land Developers Limited V/s Navin Kumar

SECOND APPEAL NO.585 OF 2020

Decided on 27 MARCH 2024

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

Question of Law framed in 2nd Appeal :-

“Whether the Appellate Tribunal was justified in condoning the delay of 395 days in filing the appeal by the original complainant (Respondent herein)?

Time line of the Matter :-

1. Respondent (Allottee) filed Complaint before the Maharashtra Real Estate Regulatory Authority, (Maharera) complaining non-delivery of possession within the agreed period and claimed interest under provisions of section 18 of the Maharashtra Real Estate (Regulation and Development) Act, 2016 (RERA).
2. On 13/12/2017 Maharera disposed of the complaint holding that the Allottee failed to establish that the Appellant did not complete the project or was unable to deliver possession of the Apartment in accordance with the Agreement and directed the Appellant to handover possession of the Apartment with occupancy certificate to Allottee before 31 December 2018, failing which the Appellant was directed to pay interest as per Rule 18 with effect from 1 January 2019 till the actual date of possession on the entire amount paid by the Allottee. 
3. On 11/01/2019 Allottee filed Appeal before the Maharashtra Real Estate Appellate Tribunal (Appellate Tribunal)  challenging the order along with an application seeking condonation delay in filing the appeal. 
4. On 19/08/2019 the Appellate Tribunal  allowed the application for condonation of delay.
5. The Appellant has filed this Second Appeal challenging the judgment and order dated 19th August 2019 passed by the Appellate Tribunal.

Fact of the Case :-

1. Allottee  purchased an apartment bearing No.203 in the project India bulls Greens-II situated at Panvel and Entered into Flat Buyer's Agreement on 18/10/2011.
2. As per the Flat Buyer's Agreement, possession was to be handed over within 60 months with grace period of 9 months.

Contentions of Appellant :-

1.  The Appellate Tribunal has committed a manifest error in condoning inordinate delay of 395 days in filing the Appeal.
2. Allottee  was not prevented by any disability or cause from filing the Appeal within the period of limitation.
3. Allottee took a false plea of heart disease, which was relatable to the year 2016.

Contentions of Respondent :- 

1. No substantial question of law is involved in the present Appeal as the impugned order merely condones delay of 395 days in filing the Appeal.
2. That Condonation of delay is the discretionary power exercised by the Appellate Court in which this Court cannot interfere in exercise of jurisdiction under Section 100 of the Code of Civil Procedure (Code).
3.  Technicalities cannot be permitted to overtake the substantive rights sought to be agitated by a flat purchaser.
4. That Allottee suffers from serious cardiac ailments for prolonged time, which is evidenced in various certificates produced before the Appellate Tribunal. 
5. That Allottee also faced financial distress on account of health issues suffered by him
6. The Allottee has excellent case on merits, and the same cannot be thrown out on the ground of limitation without considering the merits involved in the Appeal.

Observations of the High Court:-

1. The short issue that requires consideration in the present Appeal is about correctness of the order passed by the Appellate Tribunal in condoning delay of 395 days in filing the Appeal.
2. Condonation of delay is a matter of discretion to be exercised by a Court. So long as exercise of discretion is sound, the Appellate Court shall not substitute its discretion with the discretion exercised by the Court condoning the delay 
3. it cannot be stated that there is complete absence of any cause in the application. Respondent, in his capacity as a flat purchaser first made an attempt to prosecute his complaint personally considering the ease of access provided to parties-in-person before Regulatory Authority.
4. There is sound exercise of discretion by the Appellate Tribunal in condoning the delay. So long as the exercise of discretion by the Appellate Tribunal is not arbitrary, interference by this Court in exercise of discretion is clearly unwarranted.
5.  the Respondent repeatedly pursued various issues with Appellant after passing of the order by the Regulatory Authority. The email correspondence started from 24 February 2018 and went on till 4 December 2018. Most of the emails were in respect of permission to visit the flat, since the Respondent believed that the same was not habitable
6. It is not unnatural for a flat purchaser, who had book the flat in 2011 and was yet to receive possession, to feel anxious especially when he was not permitted to inspect the flat.

Order of the High Court:-

1. the Appellate Tribunal was justified in condoning the delay in filing the Appeal by Respondent.
2. The Second Appeal is accordingly dismissed without any orders as to costs. 

Supreme Court of India - allottee holds the right of refund on demand as an unconditional absolute right, if the promoter fails to give possession of the unit within the time stipulated under the terms of the agreement

The Supreme Court of India vide its land mark judgement Newtech Promoters and Developers Pvt. Ltd. v. State of U.P. (MANU/SC/1056/2021) dated November 11, 2021 held that the allottee holds the right of refund on demand as an unconditional absolute right, if the promoter fails to give possession of the unit within the time stipulated under the terms of the agreement regardless of unforeseen events or stay orders of the Court/Tribunal, provided that the allottee wishes to withdraw from the project.

Thus, the unqualified right of the allottee to seek refund is not dependent on any contingencies or stipulations.

the allottees will not lose their right to claim interest for delayed possession merely on the ground that the conveyance deed had already been executed

 Amit Gupta Vs. Athena Infrastructure Ltd.Appeal No.79 of 2020 in Haryana Real Estate Appellate Tribunal,

The complaint filed by the appellant-allottee for grant of interest for delayed possession was dismissed by Ld. Haryana Real Estate Regulatory Authority, Gurugram The only ground taken in the order is that as the conveyance deed had already been executed, so the complaint was not maintainable.

It was held by the Appellate tribunal that 

"In our view the approach of the Ld. Authority is erroneous. The Hon'ble Apex Court in case Wg. Cdr. Arifur Rahman Khan and Aleya Sultana and others vs. DLF Southern Homes Pvt. Ltd. (now known as BEGUR OMR Homes Pvt. Ltd.) and others 2020(3) R.C.R.(Civil) 544 has laid down as under:-

“The developer in the present case has undertaken to provide a service in the nature of developing residential flats with certain amenities and remains amenable to the jurisdiction of the Consumer Fora. Consequently, we are unable to subscribe to the view of the NCDRC that flat purchasers who obtained possession or executed Deeds of Conveyance have lost their right to make a claim for compensation for the delayed handing over of the flats.”

In view of the aforesaid ratio of law laid down by the Hon'ble Apex Court, the allottees will not lose their right to claim interest for delayed possession merely on the ground that the conveyance deed had already been executed. The execution of the conveyance deed cannot extinguish the cause of action which had already accrued to the allottee due to delay in delivery of possession. Thus, the impugned order passed by the Ld. Authority is not sustainable. Consequently, the present appeal is hereby allowed. The impugned order dated 19.12.2019 is hereby set aside.

Supreme Court of India - The nature and extent of relief, to which a subsequent purchaser can be entitled to, would be fact dependent.

 In the matter of LAUREATE BUILDWELL PVT. LTD. V/s CHARANJEET SINGH CIVIL APPEAL NO. 7042 of 2019 decided on July 22, 2021 before THE SUPREME COURT OF INDIA

Fact of the Case

• Ms. Madhabi Venkatraman (hereafter “the original allottee”) applied on 29.08.2012 for allotment of a residential flat (No. 7013,(hereafter “the flat”) admeasuring 4545 sq. ft., in Nectarine Tower "PARX LAUREATE" at Sector- 108, Expressway, Noida.

• On 16.10.2012, an allotment letter was issued to the original allottee

• According to the allotment letter, the possession of the flat was to be handed over within 36 months (from the date of allotment letter) i.e., latest by 15.10.2015.

• The original allottee made payment to the tune of ₹1,55,89,329/

• after noticing the slow pace of construction, the original allottee decided to sell the flat

• The purchaser and now complainant alleged that possession was not delivered in October, 2015 as  promised (in the allotment letter).

• The Complainant claims to have visited the builder’s office in last week of January, 2017 and was informed that possession of the said flat could not be delivered till the end of year 2017

• After this, the purchaser sought for refund of the amount paid, from the builder. On 08.03.2017, a legal notice was issued to the builder asking for refund of the amount of ₹1,93,70,883/- with interest

• The builder, Laureate denied the claim

• . It is in these circumstances, that the appellant approached the NCDRC, for direction to the builder to refund the entire sum of ₹1,93,70,883/- with interest at the rate of 24% from the respective dates when the instalments were paid to Laureate. In addition, ₹ 5,00,000/- as compensation and ₹ 2,00,000/- as litigation expenses were sought along with other costs.

• The NCDRC directed the Developer to refund the amount deposited with the developer in respect of subject flat No. 7013 with interest @ 10% p.a

Arguments of the Builder 

• Learned senior counsel submits that since the complainant was not the original allottee but a subsequent purchaser, he could not claim any interest. He relied upon two rulings of this Court in HUDA v. Raje Ram and the recent judgment of this Court in Wing Commander Arifur Rahman Khan and Anr. v. DLF Southern Homes Pvt. Ltd.

• It is submitted that in both these cases, this Court had categorically ruled that when the allottee in a housing project transfers his or her rights in favor of another, such a third party cannot claim equities to the same extent as the original allottee, especially as regards a claim for interest

Analysis and Conclusions:

• this court is of the opinion that the per se bar to the relief of interest on refund, enunciated by the decision in Raje Ram (supra) which was applied in Wg. Commander Arifur Rehman (supra) cannot be considered good law. 

• The nature and extent of relief, to which a subsequent purchaser can be entitled to, would be fact dependent.

• It would no doubt be fair to assume that the purchaser had knowledge of the delay. However, to attribute knowledge that such delay would continue indefinitely, based on an a priori assumption, would not be justified.

• the interests of justice demand that interest at least from that date ( Subsequent allottee purchasing the unit" should be granted, in favor of the respondent.

Punjab RERA - Long unexplained delay in pursuing the matter would obviously be hit by the bar of limitation.

 In the Matter of Indra Duggal V/s Chandigarh Overseas Pvt ltd. Case no. 1769 of 2020 decided on 07.07.2021 Before The Real Estate Regulatory Authority, Punjab

Fact of the Case 

• Unit was allotted on 26.09.2014
• Date of Builder buyer agreement was on 26.09.2014
• Entire payment has also been received by the Respondent.
• Date of Possession was 30.06.2016
• Possession has not been provided

It was held by the Authority That 

• There has been a complete inaction on the part of complainant for a period of nearly 6 years till the present complaint is filed on Aug 2020.
• Such a long unexplained delay in pursuing the matter would obviously be hit by the bar of limitation.
• The Entry at Serial no. 113 of the schedule of the limitation act,1963 provides that the limitation for any proceedings for which no separate period of limitation is provided would be 3 years from the time the right to sue accrues.
• The complaint is being dismissed as being barred by limitation.

Provisions of the special Act always override the provisions of the general law

 In the Matter of M/s Apex Buildwell Pvt. Ltd. V/s Sachin Kumar,Appeal No.240 of 2019 decided on 09.02.2021 before THE HARYANA REAL ESTATE APPELLATE TRIBUNAL it was held that

"We do not find any substance in the contentions raised by learned counsel for the appellant that in order to claim the compensation for delay in delivery of possession, the respondent /allottee was required to establish the loss suffered by him as provided in Section 74 of the Indian Contract Act, 1872. The provisions for grant of damage on account of the breach of contract provided in Section 74 of the Indian Contract Act are the general provisions. Whereas Section 18 of the Act is a special provision dealing with consequences on account of the failure of the promoter to complete the project by the date specified in the agreement for sale. The proviso to Section 18(1) of the Act categorically provides that where an allotee does not intend to withdraw from the project, he shall be paid by the promoter the interest for every month of delay till handing over of the possession at such rate as may be prescribed. Thus, the proviso to Section 18(1) of the Act stipulates that the allottee shall be entitled to interest at the prescribed rate for the delay in delivery of possession beyond the date stipulated in the agreement for sale. It is nowhere mentioned in Section 18 of the Act that in order to claim the interest for delayed delivery, the allottee has to prove the loss. Simple failure of the promoter to deliver the possession by the date specified in the agreement for sale, will make the allottee entitled for the interest provided in the proviso to Section 18(1) of the Act. It is settled rule of interpretation that the provisions of the special Act always override the provisions of the general law. So, the provisions of the Act will override Section 74 of the Indian Contract Act which is the general law."

Supreme Court - The Authority owed a duty to explain and to satisfy the Court, the reasons for such high Cost escalation.

In the Matter of  Indore Development Authority vs Smt. Sadhana Agarwal & Ors 1995 SCC (3) 1, JT 1995 (3) 1  decided on 7 March, 1995 before Supreme Court of India

The Apex court held that " It is well known -that persons be- longing to Middle and lower Income Groups, before registering themselves for such flats, have to take their financial capacity into consideration and in some cases it results into great hardship when the development authorities announce an estimated or approximate cost and deliver the same at twice or three of the said amount."

it also observed that " The final cost should be proportionate to the approximate or estimated cost mentioned in the offers or agreements With the high rate of inflation, escalation of the' prices of construction materials and labour charges, if the scheme is not ready within the time frame, then it is not possible to deliver the flats or houses in question at the cost so announced. It will be advisable that before offering the flats to the public such development authorities should fix the estimated cost of the flats taking into consideration the escalation of the cost during the period the scheme is to be completed, "

"In the instant case , the estimated cost for the LIG flat was given out at Rs.45,000/-. But by the impugned communication, the appellant informed the respondents that the actual cost of the flat shall be Rs. 1,16,000/- i.e. the escalation is more than 100%. The High Court was justified in saying that in such circumstances, the Authority owed a duty to explain and to satisfy the Court, the reasons for such high escalation"

Supreme Court - Time is not an Essence of Contract, However, if the parties agreed to a specified time in the agreement to perform their part of the Contract, then time is the essence of the Contract and parties shall adhere to the same.

 In the Matter of  I.S.Sikandar (D) By Lrs.& Ors vs K.Subramani & Ors Complaint no. Civil Appeal no. 7306 OF 2013 // (Arising out of SLP(C) No. 20367 of 2009) decided on  29.08.2013 before Supreme Court of India

The Court Observed that.

This position of law is well settled by this Court in the Constitution Bench judgment in Smt.Chand Rani (dead) by LRs. Vs. Smt. Kamal Rani(dead) by LRs. Appeal (civil)  3377 of 1979 decided on 18/12/1992 ; wherein this Court has held that it is a well settled principle of law, that in a case of sale of immovable property, time is not the essence of the contract. 

However, If the parties agreed to a specified time in the agreement to perform their part of the contract, then time is the essence of the contract and parties shall adhere to the same.

The Court also relied on the statement in Chand Rani Vs. Smt. Kamal Rani(supra) case whereas it was mentioned 

“It has to be ascertained whether under the terms of the contract the parties named a specific time within which completion was to take place, really and in substance it was intended that it should be completed within a reasonable time. An intention to make time the essence of the contract must be expressed in unequivocal language.””

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NCDRC - The Developer having received the sales consideration Cannot Charge Holding charges from the Allottee for the delay in taking possession.

 In the Matter of Capital Greens Flat Buyer Association & Ors. Vs. DLF Universal Limited & Anr Complaint no.Consumer case no. CC/2047/2016 decided on 03.01.2020 before National Consumer Disputes Redressal Commission

The NCDRC Observed that

36. ………………...As far as holding charges are concerned, The Developer having received the sales consideration has nothing to lose by holding possession of the allotted flat except that it would be required to maintain the apartment.Therefore the holding charges will not be payable to the developer. Even in a case where the Possession has been delayed on account of the allottee having not paid the entire sale consideration, the developer shall not be entitled to any holding charges though it would be entitled to interest for the period the payment is delayed.

in Civil Appeal CA 3864-3889/2020 Order dated 14.12.2020 the Supreme court has Upheld all directions of NCDRC except two 

(i) The compensation on account of delay in handing over possession of the flats to the flat buyers is reduced from 7% to 6%; and

(ii) The direction for the refund of parking charges and club charges and interest on these two components shall stand set aside.

NCDRC - compensation to the complainant company cannot be at par with that to an individual.The company is not entitled to compensation for the mental agony and harassment to which an individual is entitled

 In the Matter of Springdale Core Consultants Pvt Ltd vs. Pioneer Urban Land and Infrastructure Ltd Complaint no, Consumer case no. 349/2017 decided on 14.07.2020 before National Consumer Disputes Redressal Commission.

The Complainant company booked a residential apartment for its Directors in the Builders project on 29.11.2011. An agreement for sale dated 13.03.2012 was executed between the parties. Under the agreement, the Builder had to apply for Occupancy certificate by 04.09.2015 and obtain the OC by 04.03.2016. The builder could not obtain OC within agreed time. The Complainant filed a complaint seeking possession of the flat along with the compensation for delay in construction. Alternatively, the complainant company prayed for refund of the amount paid to the Builder. During the pendency of the complaint, the Builder obtained OC and offered possession to the complainant company vide letter dated 03.04.2019. 

Issue before NCDRC: 

(i) Whether the flat booked by the Complainant company for its Directors was booked for speculative purposes? 

(ii) Whether the Complainant company is entitled to any compensation in the form of interest for delay in possession of flat?

It placed reliance on the resolution passed by its board of directors on 14.11.2011, resolving to book flat for the residence of one of the directors of the company. Accordingly, the complainant argued that the purchase of flat was not for speculative purposes. 

Builder’s contentions: 

1. Since the complainant is a private limited company resolution may have been manufactured at a later date. 2. As per the information provided by the Registrar of companies, the business activities of the complainant company were confined to Amritsar and all the Directors were residents of Amritsar. A director was also a partner of LLP engaged in the business of Real estate. 

3. The compensation for the delay in delivery of the possession where the complainant is a company should not be at par with the compensation granted to an individual. 

4. Submitting the lease deeds, the builder showed the prevailing rentals in the project. They stated that there would be no justification for compensation higher than the prevailing rentals in the project.

5. Builder also claimed for holding charges from the complainant company.

Verdict of NCDRC: 

NCDRC directed the Builder to hand over the possession of flat to the complainant company within 8 weeks from the date of order. The court also awarded compensation to the complainant company. It rejected the Builder’s contention that the flat in question was for speculative purposes. It observed that the Director became a partner in the LLP in the year 2017 and the flat in question was booked earlier in the year 2011. Secondly, she was residing at Gurgaon and was planning to shift to Gurgaon even if she was residing at Amritsar. Therefore, it is difficult to infer that the flat was booked for speculative purposes 

The Commission relied on the decision of Vishal Malik & Anr. Vs. Pioneer Urban Land Infrastructure Ltd 1 , to direct possession of flat along with the compensation. The commission agreed with the Builder that the compensation to the complainant company cannot be at par with that to an individual. 

The company is not entitled to compensation for the mental agony and harassment to which an individual is entitled. On quantum of compensation, NCDRC stated that the prevailing rents in respect of similarly situated flats of identical specifications and size cannot be made the sole basis for grant of such compensation. Else the builder would have no incentive to complete the construction within the agreed time frame. He would know that even if he diverts the funds collected from the flat buyer to another project, he would easily compensate the buyer which would not cost him more than 3-4% of the capital employed. 

NCDRC placed reliance on the decision of Capital Greens Flat Buyer Association & Ors. Vs. DLF Universal Limited & Anr 2 to observe that the builder is not entitled to holding charges. Since the builder having received the consideration has nothing to lose by holding possession of flat except to maintain the apartment.

Supreme Court - Subsequent buyers are entitled to receive interest only after the date of endorsement in their favour.

 In the Matter of Haryana Urban Development Authority Vs. Diwan Singh Complaint no. Civil Appeal no. 3409 of 2003 // (2010) 14 SCC 770 decided on 23.10.2008 before Supreme Court of India

Fact of the Case.

• Plot No. 2163P in Sector 13, Bhiwani was allotted by the Appellant in the year 1990

• on the request of the original allottee, it was re-allotted to the respondent by the appellant on 21.4.1998

• In the year 1999, respondent approached the District Consumer Disputes Redressal Forum, Bhiwani, alleging that in spite of payment of the full price, the appellant had failed to deliver possession, on account of non-completion of development

• He therefore sought three reliefs. 

• First, a direction to the appellant to pay interest at 24% per annum on the amounts deposited, till the date of delivery of possession (after removing the road laid over a part of the plot). 

• Second was for a direction to the appellant not to charge any extension fee after 1994 or any interest on the extension fee. 

• Third was for payment of compensation of Rs.1,00,000/ for harassment and suffering

• The appellant resisted the claim on several grounds and also alleged that it had offered possession in 1994 and again in May 1998

• The District Forum by its order dated 10.8.1999 accepted the contention of the respondent that there was no effective offer of delivery of possession in May 1998 and awarded interest at 18% per annum on the amounts deposited, with effect from the date commencing on the expiry of two years from the date of deposit, till date of fresh offer of possession with a further direction to the appellant not to charge interest on the extension fee. The prayer for compensation for suffering/mental agony was rejected.  

• The appeal filed by the appellant was dismissed by the State Consumer Disputes Redressal Commission on 21.9.1999 by a nonspeaking order on the ground that there was no merit in the appeal.

• The appellant challenged the order of the State Commission in a Revision filed before the National Consumer Disputes Redressal Commission.

• The National Commission by a non-speaking order dated 27.8.2002 disposed of the Revision Petition in terms of its decision in HUDA v. Darsh Kumar (Revision petition No. 1197 of 1998) wherein it has upheld the award of interest even at 18% per annum.

Order of the Supreme court

• One significant aspect to be noticed is that respondent is not the allottee who was allotted the plot in 1990, but a re-allottee who was re-allotted the plot in April 1998. When he was offered possession of the plot in May 1998, he found that a part of it was used for road purposes of road. Thereafter, the appellant even offered an alternative plot. The respondent however rushed to the District Forum in 1999, hardly within a year of re-allotment.

•  A re-allottee in 1998 cannot obviously be awarded interest from 1992 on the amounts paid by the original allottee in 1990 on the ground that the original allottee was not offered delivery in 1990.

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NCDRC - Wherever the builder commits a particular date or time frame for completion of the construction and offering possession to the buyer, he must necessarily honour the commitment made by him, If the builder can indefinitely postpone and delay the construction of the flat and the flat buyer has no option but to wait till the builder decides to complete the construction and offer possession to the buyer, that would be nothing but a travesty of justice.

 In the Matter of Pradeep Narula & Anr. Vs. M/s. Granite Gate Properties Pvt. Ltd. & Anr. Complaint no. Consumer Case No. 315 OF 2014 decided on 23.08.2016 before National Consumer Disputes Redressal Commission

The NCDRC in this case Observed that 

"10.   ...........  The primary purpose of a consumer in booking a residential flat which the builder is to construct for him, is to start living in that house on or about the date committed to him by the builder for delivering possession of the flat booked by him.  If the builder does not deliver upon his contractual obligation and at the same time, is unable to show that the delay in completion of the flat and offering its possession to the consumer was on account on circumstances beyond his control, this would constitute deficiency on the part of the builder / service provider in rendering services to the consumer.  If I accept the contention that the builder can indefinitely postpone and delay the construction of the flat and the flat buyer has no option but to wait till the builder decides to complete the construction and offer possession to the buyer, that would be nothing but a travesty of justice and result in a situation where the flat buyer is left at the mercy of the builder, without recourse to an appropriate legal remedy.  Such an interpretation, if taken, is bound to defeat the very objective behind the enactment of the Consumer Protection Act, as far as housing construction is concerned.  Therefore, I am unable to accept the contention advanced by the learned counsel for the opposite party.  In my view, wherever the builder commits a particular date or time frame for completion of the construction and offering possession to the buyer, he must necessarily honour the commitment made by him, though a minor delay may not constitute deficiency in the service rendered by him to the buyer.  Of course, if the builder is able to how that the delay in completion of the construction and offering possession to the buyer is attributable wholly to the circumstances beyond his control, that may not be a case of deficiency in the services rendered to the consumer".

NCDRC - The builder ought not to have accepted money and entered into agreement with the buyers without approval of the building plans

 In the Matter of Yogesh Sharma & Anr., vs M/S Unitech Limited Complaint no.Consumer Case No. 267 OF 2014  decided on 26.11.2015 before National Consumer Disputes Redressal Commission

The NCDRC in the case observed that the builder ought not to have accepted money and entered into agreement with the buyers without approval of the building plans by GNIDA (Greater Noida Development Authority). If the opposite party chose to accept money from the flat buyers and enter into agreements, undertaking to give possession within a particular time frame, without having possession of the land and without approval of the building plans, it is only itself to blame for a situation in which the construction got delayed on account of the delay in approval of building plans and physical delivery of the land to it on the spot.

Appellants, having accepted a part of benefit, are not permitted to approbate and reprobate also they can not be permitted to resile from their earlier stand. Therefore, the Appellant has to be estopped from claiming again.

 In the Matter of S.Dominic Savio and Anr. vs. Phoenix Serene Spaces Pvt. Ltd. Complaint no.Appeal No. 64 of 2019  decided on 28.02.2020 before Tamil Nadu Real Estate Appellate Tribunal

The Appellant entered into an agreement with the Respondent for a flat in the project of the Respondent. The apartment was to be completed by 31.12.2015 with a grace period of six months. However, the unit was not delivered on time and the Respondent agreed to cancel the allotment on 05.05.2018, refunding the principal amount in three installments. In December 2018, the Appellants approached Respondents for refund of interest, for which the Respondent refused. Being aggrieved, complaint was filed before Adjudicating Officer for interest and compensation. The said complaint was dismissed by the Adjudicating Officer. In the present Appeal, it is contented by the Appellants that Respondent visited their offices and homes to deliberate on the refund process and due to the mental pressure and undue influence exerted by the Respondents, they were forced to accept foregoing interest and compensation and agreed for refund of principal only to free themselves from the mental agony. The Tribunal after going through the communication between the Appellant and the Respondent over a period of time held that there was no undue influence or undress. The said communication clearly reflected that Appellants voluntarily asked the Respondents to cancel the allotment, refund the money without any deduction, promising to forego their claim of interest and compensation. Further, it was held that the action of the Appellants was an afterthought, since they had waived their right of interest and compensation due to their agreement with the Respondent. The Appellants in this case, having accepted a part of benefit could not to be permitted to approbate and reprobate nor can they be permitted to resile from their earlier stand. Therefore, the Appellant was estopped from claiming again. 

Provisions of Section 12 are retroactive in nature,allottees are entitled to protection for breaches and failure of the developer notwithstanding that the transactions between the developer and the allottees consummated before the Act came into force

 In the Matter of Rohit Chawla and Ors. vs. Bombay Dyeing & Mfg. Co. Ltd. complaint no.AT006000000011016  decided on 31.12.2019 before Maharashtra Real Estate Appellate Tribunal

In the instant case, 

• the developer had published the project and gave assurances regarding details of the amenities and flats and basis such representations, the allottees booked flats in the project in 2012-2013. 

• The developer further represented to the allottees that it would handover the possession of the flat by 2017. However, the developer failed to handover the possession and also failed to provide amenities as were assured to the allottees. 

• Accordingly, the allottees filed a complaint before MahaRERA claiming that they had suffered a loss on account of incorrect and false statements made by the developer in relation to the project. Further, the allottees also sought refunds of the amounts paid by them along with interest thereon.

• MahaRERA held that Section 12 of the Act (which deals with obligations of the developer regarding veracity of the advertisement or prospectus) was not retrospective and was not applicable to the instant case since the allottees had booked flats in the year 2012-2013 and the Act came into force in the year 2017. 

• Further, MahaRERA had rejected the plea of the allottees to withdraw from the project since it would jeopardise the completion of the project. 

• The MahaRERA Appellate Tribunal overruled the order passed by MahaRERA and held that provisions of Section 12 (which deals with obligations of the developer regarding veracity of the advertisement or prospectus) are retroactive in nature and the allottees are entitled to protection for breaches and failure of the developer notwithstanding that the transactions between the developer and the allottees consummated before the Act came into force.

•  Further, MahaRERA Appellate Tribunal also held that the allottees are entitled to withdraw from the project and the developer was under an obligation to refund the amounts paid by the allottees along with interest thereon.

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MahaRERA - industrial units do not come under the definition of “real estate project” and the provisions of the Act are not applicable to industrial units.

 In the Matter of Techno Drive Engineer Pvt. Ltd. V/s Renaissance Indus Infra Pvt. Ltd. Complaint no. CC006000000078620 decided on 26.11.2019 before Maharashtra Real Estate Regulatory Authority.

In the instant case, the Allottee had filed a complaint against the developer on the ground that the developer failed to hand over an industrial unit booked by the Allottee in accordance with the agreed date of possession. The Allottee had booked the unit for setting up its industrial manufacturing unit. MahaRERA dismissed the complaint stating that industrial units do not come under the definition of “real estate project” and the provisions of the Act are not applicable to industrial units.

The judgement can be accessed at https://www.livelaw.in/pdf_upload/pdf_upload-367507.pdf

MahaRERA - Subsequent allottees are not entitled to any interest under Section 18 of the Act.

 In the Matter of Devindersingh Harbajansingh Anand and others Versus Poona Bottling Co. Pvt. Ltd. And others Complaint no.CC005000000011586 decided on 09.01.2019 before Maharashtra Real Estate Regulatory Authority

It has been held that subsequent allottees are not entitled to any interest under Section 18 of the Act. In the instant case, the complainants purchased the flat from the original allottees and were now claiming rent from the developer for the delay in possession on the basis of the date of possession mentioned in the earlier agreement between the original allottees and the developer.

MahaRERA stated that the subsequent allottees were aware at the time of purchase of the flat that the date of possession had lapsed and hence they were not entitled to any relief.

The order can be accessed on http://www.jclex.com/reradossier/subsequent%20allottees%20not%20entitled%20to%20interest.pdf

That Just because home buyers continued to pay even after the promised possession date had lapsed, they had not "acquiesced" and not consented to the delay in possession

 In the Matter of Saurabh Mehrotra Vs.CCI Projects Pvt Ltd Complaint no.CC006000000078611  decided on 06.08.2020  Before Maharashtra Real Estate Regulatory Authority.

x

• The Rivali Park project, rechristened as Wintergreen, has been delayed for more than three years. The developer CCI Projects Ltd had sought last mile funding for the project from the Rs 20,000 crore stress fund created by Finance Minister Nirmala Sitharaman and the  funds were sanctioned for builder CCI Projects Ltd. 

• The developer had revised the possession date to December 2019, and further extended it to June 30, 2021.

• Home buyer had filed complaints seeking relief after the project was delayed. However, The buyer made remaining payments for the flat even after the possession date in their registered agreements had lapsed.

• Advocate, appearing for the developer, contended that the developer had informed the revised possession dates to the buyers from time to time and they have made payments even after the possession dates had passed. This showed that they had "acquiesced" and had consented to the revised possession dates.

• However, rejecting the argument, The Court observed that the payments were structured as slab-wise payments, and after investing big amounts, the complainants were helpless and continued making payments in the hope of early possession."Therefore, this conduct of the complainants does not amount to acquiescence. 

• The Court Observed that “ when the statute imposes strict duty for completing the project as per timeline, and speaks about the consequences of delay, the allottees' consent for condoning the delay must be unequivocal and it must be in writing. No such document is produced before me,".

• The Plea for granting Delayed Possession charges under Section 18 was granted.

 

Decree holder cannot be classified as a financial creditor for the purpose of initiating Corporate Insolvency Resolution Process (“CIRP”) under the Insolvency and Bankruptcy Code, 2016 (“IBC”)

 The National Company Law Appellate Tribunal, New Delhi (“NCLAT”) has in its judgment dated August 14, 2020 (“Judgment”) in the matter of Sushil Ansal v. Ashok Tripathi and Others [Company Appeal (AT) (Insolvency) No. 452 of 2020], held that a decree holder cannot be classified as a financial creditor for the purpose of initiating Corporate Insolvency Resolution Process (“CIRP”) under the Insolvency and Bankruptcy Code, 2016 (“IBC”).

Facts

Brief facts of the case are that 

• on August 5, 2014, one Mr. Ashok Tripathi (“Respondent No. 1”) and Mr. Saurabh Tripathi (“Respondent No. 2”) (collectively, “Respondents”) had jointly booked a unit bearing No. 0073, admeasuring 3746 sq. ft., with M/s. Ansal Properties and Infrastructure Limited (“Corporate Debtor”) in one of their real estate projects namely, Sushant Golf City, in Lucknow, for a total consideration of INR 1,62,43,133/- by paying an amount of INR 8,37,300/- towards booking advance. 

• In a separate transaction, Respondent No. 2 had on July 16, 2014, booked another unit bearing No. B7/GF/01, admeasuring 1229 sq. ft. in the same project, by paying an amount of INR 1,63,994/- as booking advance. A joint “built up agreement/builder buyer agreement” dated September 12, 2014, in respect of the unit bearing No. 0073 and a “Flat Buyer Agreement” dated September 28, 2014 in respect of the unit bearing No. B7/GF/01 was executed between the respective Respondents with the Corporate Debtor. Pursuant to execution of the aforementioned agreements, allotment letters pertaining to the said units were issued by the Corporate Debtor to each of the Respondents.

• The Corporate Debtor undertook to complete the construction of the said units and to deliver possession thereof to the said Respondents within 2 years from the date of commencement of construction. Since the project commencement date notified on the website of RERA was September 22, 2015, the Corporate Debtor was required to deliver possession of the unit bearing No. 0073 to both the Respondents by September 22, 2017 and deliver possession of the unit bearing No. B7/GF/01 to the Respondent No. 2 within 36 months from the date of the building plan being sanctioned. 

• However, even after the passing of 5 years of the aforementioned time frame, the Corporate Debtor failed to complete the construction of the said units or refund the amounts paid as booking advance, to the Respondents.

• Whether this is a fit case for invoking Rule 11 of the National Company Law Appellate Tribunal Rules, 2016 (“NCLAT Rules”) to allow the parties to settle the dispute?

• Whether the application filed by the Respondents under Section 7 of the IBC was not maintainable?

• The NCLAT observed that a Corporate Debtor was permitted to seek exit from CIRP at the pre-admission stage. It could also seek exit at the post admission stage, but before constitution of the Committee of Creditors. It was manifest that a party to CIRP could approach the adjudicating authority directly for exercise of its inherent powers under Rule 11 of the NCLT Rules, 2016 for withdrawal of the application under Section 7 of the IBC or disposal of such application on the basis of a settlement worked out by the parties. 

• However, exercise of inherent power on the part of adjudicating authority or even by the NCLAT in appeal would depend on consideration of all relevant facts of the case. The adjudicating authority or the appellate tribunal would have to keep in view the interest of various stakeholders and claimants before allowing such withdrawal or settlement. 

• Admittedly, the interim resolution professional had received 283 claims against the Corporate Debtor from allottees of different projects, financial creditors, operational creditors, other creditors and employees. The Settlement Deed executed between the Respondents and the Corporate Debtor did not take into consideration the interest of such other claimants. Therefore, allowing the withdrawal of application under Section 7 of the IBC on the basis of such settlement between the Respondents and the Corporate Debtor was not all-encompassing and detrimental to the interests of the other claimants, including the other allottees, and accordingly would not be in consonance with the object of the IBC and the purpose of invoking of Rule 11 of the NCLAT Rules.

• With respect to maintainability of the application under Section 7 of the IBC, the NCLAT observed that the dictum of law was loud and clear. An application for initiating CIRP against the Corporate Debtor by allottees under a real estate project was required to be filed jointly by not less than one hundred of such allottees or not less than 10% of the total number of such allottees under the same real estate project. It is therefore clear that an application at the instance of a single allottee or by a group of allottees falling short of the prescribed threshold limit would not be maintainable.

Aggrieved by the above, the Respondents lodged a complaint before the Uttar Pradesh Real Estate Regulatory Authority (“UP RERA”) to establish the existence of a financial debt and liability of the Corporate Debtor to the tune of INR 73,35,686.43. Pursuant to this, on November 16, 2017, the UP RERA directed the Corporate Debtor to refund the amount repayable to the Respondents with respect to the unit bearing No. 0073 in 6 instalments within a period of 9 months. Subsequently, on December 13, 2018, the UP RERA further directed the Corporate Debtor to refund the amount paid with respect to the unit bearing No. B7/GF/01 to Respondent No.2 in 10 monthly instalments along with interest. 

Consequently, a Recovery Certificate dated August 10, 2019 (“Recovery Certificate”) was issued by the UP RERA in this regard and forwarded to the concerned authority for effecting the recovery of INR 73,35,686.43 from the Corporate Debtor. However, the Respondents chose to file an application under Section 7 of the IBC for initiation of CIRP before the National Company Law Tribunal, New Delhi (“NCLT”) even though they were entitled to seek disbursement of the above mentioned amount of INR 73,35,686.43 from UP RERA upon its recovery.

The NCLT observed that the claim of the allottees had arisen out of the aforementioned orders and Recovery Certificate issued by the UP RERA and termed such claim as an ‘adjudicated debt’. It therefore held that the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2019 (“Ordinance”) promulgated on December 28, 2019, which prescribes a minimum threshold limit of not less than 100 allottees or not less than 10% of the total number of allottees under the same real estate project, whichever is less, for initiation of CIRP at the instance of allottees of a real estate project, was not attracted in the present case, as the Respondents went before the NCLT as decree-holders and not as allottees. Thus, the NCLT, vide its impugned order dated March 17, 2020 (“NCLT Order”), admitted the application of the Respondents for initiating CIRP. Aggrieved by the said NCLT Order, Mr. Sushil Ansal, a former director and shareholder of the Corporate Debtor (“Appellant”), filed the present appeal before the NCLAT.

Issues

Arguments

Contentions raised by the Appellant:

The Appellant inter alia contended that the application filed by the Respondents under Section 7 of the IBC was not maintainable as the Respondents did not meet the required criteria of either constituting 100 allottees or 10% of the total allottees as mandated under the Ordinance, and therefore were ineligible to by themselves file an application under Section 7 of the IBC for initiation of CIRP against the Corporate Debtor. The Appellant argued that the Ordinance was promulgated and came into force during the pendency of the applications filed by the Respondents before the NCLT and therefore the NCLT should have insisted upon compliance with the mandate under the Ordinance regarding the threshold limit before proceeding to pass the impugned order. It was further argued that the Ordinance was followed by the passing of the Insolvency and Bankruptcy Code (Amendment) Act, 2020 (“Amendment Act”) which incorporated the provisions of the Ordinance, and in effect crystallised the legal position pertaining to eligibility for initiating of CIRP, and therefore the application filed by the Respondents under Section 7 was not maintainable. It was also urged that classification of allottees as Financial Creditors was not permissible and merely because the Respondents had obtained a RERA decree in their favour, it did not alter their status. Therefore, the finding recorded by the NCLT that the allottees who have obtained a decree in their favour would not be hit by the requirement of threshold limit under the Ordinance followed by the Amendment Act was flawed. It was further submitted that the dispute stood settled between the Corporate Debtor and the Respondents in terms of an amicable settlement between the parties pursuant to which they had filed a joint application for withdrawal and termination of CIRP of the Corporate Debtor.

Contentions raised by the Respondents:

The Respondents on the other hand contended that they had settled all their disputes with the Appellant in relation to the unit bearing no. 0073 and they do not have any pending claims against the Corporate Debtor. The Respondents accordingly prayed for invoking Rule 11 of the NCLAT Rules to set aside the order of admission and terminate the CIRP against the Corporate Debtor. It was further submitted that the dispute was settled prior to constitution of a committee of creditors and therefore there was no legal impediment in allowing such settlement and permit withdrawal and termination of CIRP. In so far as the claims of other home buyers/ creditors was concerned, it was submitted that they could pursue their claims independently on their own merits through any remedy as may be available under law. As regards the instant appeal, it was submitted that the Respondents did not wish to contest the issue raised by the Appellant regarding maintainability of the application under Section 7 filed by them and, therefore, agreed and subscribed to the arguments advanced by the Appellant.

Observations of the National Company Law Appellate Tribunal, New Delhi:

It was further observed by the NCLAT that, the Respondents’ contention of coming within the purview of ‘financial creditors’ rested on strength of the definition of ‘creditor’ in terms of the provision under Section 3(10) of the IBC which includes a decree-holder within its fold. The question that arose for consideration was whether a decree-holder, though covered under the definition of ‘creditor’, fell within the definition of a ‘financial creditor’ as per of Section 5(7) of the IBC. On a plain reading of the provision, it is clear that ‘Financial Creditor’ encompasses any person to whom a financial debt is due. It would, therefore, be relevant to ascertain the nature of debt styled as ‘financial debt’ within the ambit of Section 5(8) of the IBC. Since the initial transaction was an allotment under a real estate project, there could be no doubt that such transaction had the contours of a borrowing as contemplated under Section 5(8)(f) of the IBC. However, the case set up by the Respondents before the NCLT was not on the strength of a transaction having the commercial effect of a borrowing thereby giving them the status of ‘financial creditors’ but on the strength of being ‘decree-holders’. It was noted that, the Respondents had staked claim as ‘decree-holders’ before the NCLT and therefore they could not later claim to be allottees, classifying the amounts raised from them to have the commercial effect of a borrowing, and hence, cloaking them with the capacity of being ‘financial creditors’. Hence, it was required to be determined whether a ‘decree-holder’ could maintain an application under Section 7 as a ‘financial creditor’.

The NCLAT further noted that a ‘decree-holder’ would undoubtedly be covered by the definition of ‘creditor’ under Section 3(10) of the IBC, but cannot be classified as a ‘Financial Creditor’, unless the debt was disbursed against the consideration for time value of money or falls within any of the provisions thereof, as the definition of ‘financial debt’ is inclusive in character. In the instant case, RERA had conducted the recovery proceedings at the instance of the Respondents against the Corporate Debtor which culminated in the issuance of the Recovery Certificate and passing of an order directing the concerned authority to recover an amount of INR 73,35,686.43 from the Corporate Debtor as arrears towards land revenue. However, instead of pursuing the matter before the competent authority, the Respondents sought to trigger CIRP against the Corporate Debtor. Therefore, the answer to the question on whether a decree-holder would fall within the definition of ‘Financial Creditor’ in such a scenario had to be an emphatic ‘No’ as the amount claimed under the decree was an adjudicated amount and not a debt disbursed against the consideration for the time value of money and therefore did not fall within the ambit of any of the provisions under Section 5(8) of the IBC. It was indisputable that the Recovery Certificate sought to be executed was the end product of an adjudicatory mechanism under the Real Estate (Regulation and Development) Act, 2016, and realisation of the amount due under the Recovery Certificate tantamount to recovery effected under a money decree, though the mode of execution was slightly different. In view of the aforesaid observations, the NCLAT was of the view that the application of the Respondents under Section 7 of the IBC was not maintainable.

Decision of the National Company Law Appellate Tribunal, New Delhi

In allowing the appeal, the NCLAT noted that the Respondents could not claim to be allottees of a real estate project after issuance of the Recovery Certificate by UP RERA directing recovery of INR 73,35,686.43 as arrears towards land revenue. The NCLAT stated that the Respondents were decree-holders seeking execution of money due under the Recovery Certificate, which is impermissible within the ambit of Section 7 of the IBC. Therefore, their application for triggering of CIRP was not maintainable as allottees. Decree-holders, though included in the definition of ‘creditor’, did not fall within the definition of ‘financial creditor’ and hence a ‘decree-holder’ could not seek initiation of CIRP as a ‘financial creditor’.

In view of the conclusion reached and findings on the issues recorded, the NCLAT was of the opinion that the impugned NCLT Order initiating CIRP against the Corporate Debtor was not sustainable. The NCLAT was also of the firm view that the application of Respondents was moved for execution/recovery of the amount due under the Recovery Certificate and not for insolvency resolution of the Corporate Debtor. The NCLAT was of the view that the said NCLT Order suffered from grave legal infirmity and could not be supported and accordingly set it aside.