Anindya Infrastructure Pvt Ltd vs M/S Shubhkamna Buildtech Pvt. Ltd & Anr

(Arising out of the Order dated 17.03.2021 passed by the National Company Law Tribunal, New Delhi Bench, Court No. IV in I.A. No. 369/2019 in CP (IB) No. 1059/ND/2018)

IN THE MATTER OF:

Anindya Infrastructure Pvt. Ltd. Through its authorised signatory Shalini, w/o Ranjan Kumar Singh, R/o 110, Sigma-3, Greater Noida, Gautam Budh Nagar, Uttar Pradesh. ...Appellant

Versus

1. M/s Shubhkamna Buildtech Private Limited Through its Resolution Professional (RP) Mr. Anand Sonbhadra, AAA Insolvency Professionals LLP. E-10A, Kailash Colony, Greater Kailash-I, New Delhi-110014. ...Respondent No. 1

2. M/s Concord Infrastructure Private Limited, Having its registered office at: 184, Saini Enclave, East Delhi - 110092. ...Respondent No. 2

Present For Appellants: Mr. Ajit Singh, Adv.

For Respondents: Mr. Abhishek Anand, Mr. Nipun Gautam, Advocates for RP Comp. App. (AT) (Ins.) No. 534 of 2021

JUDGEMENT

( 04.04.2025)

NARESH SALECHA, MEMBER (TECHNICAL)

1. The present appeal has been filed by the Appellant i.e. Anindya Infrastructure

Pvt. Ltd., under Section 61 of the Insolvency and Bankruptcy Code, 2016

("Code") against the Impugned Order passed in Interlocutory Application No. 369

of 2019 in CP NO. IN-1059/ND/2018 by the National Company Law Tribunal,

New Delhi, ("Adjudicating Authority") on 17.03.2021.

2. M/S Shubkamna Buildtech Private Limited (Corporate Debtor) through its

Resolution Professional Mr. Anand Sonbhadra is the (contesting) Respondent

No.1 herein.

M/S Concord Infrastructure Private Limited (Operational Creditor) is the (non-

contesting) Respondent No.2 herein.

3. The Appellant submitted that it is a company incorporated under the

Companies Act, 1956, and has been engaged in the real estate business since its

inception. The Appellant submitted that it has maintained a business relationship

with the respondent Corporate Debtor since May 2015 with an understanding

reached with Shubhkamna Advert Buildtech Pvt. Ltd., a sister concern of the

Corporate Debtor, formalized through a letter of intent dated 14.05.2015 which

could not be implemented. Consequently, the Corporate Debtor proposed a Joint

Development Agreement (JDA) dated 06.03.2016 with the Appellant, which

included Clause 5 which explicitly stipulated that payments previously made by

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the Appellant to the Corporate Debtor's sister concern would be treated as

payments to the Corporate Debtor itself, thereby formalizing the financial

reconciliation between the parties.

4. The Appellant submitted that the respondent Corporate Debtor transferred

actual physical possession of Plot No. GH-02A, Sector-1, Greater Noida,

designated for the construction of 176 Studio Apartments under Tower T-9,

utilizing a Floor Area Ratio (FAR) of 6,983.52 square meters.

5. The Appellant submitted that in accordance with the responsibilities

outlined in the Joint Development Agreement, it commenced preparations for

advertising and marketing Tower T-9 including installing hoardings at the project

site, establishing a site office, hiring manpower, and initiating the booking process

for the apartments in Tower T-9. The Appellant elaborated that the Appellant was

solely responsible for both sales and construction activities under the terms of the

agreement.

6. The Appellant submitted that upon receiving the architectural and

structural designs, it engaged a contractor named "Adstec" to undertake the

construction of Tower T-9 in accordance with the specifications provided by the

architect.

7. The Appellant submitted that work at the project site was halted due to the

irresponsible behaviour of the Corporate Debtor and its contractor for other

towers, which resulted in a civil suit filed by buyers of those towers. Specifically,

a civil suit bearing No. 450 of 2017 was initiated by M/s Subhkamna City Welfare

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Association (SKCWA) against M/s Shubhkamna Buildtech Pvt. Ltd. in the Civil

Court of Gautam Budh Nagar (Noida), U.P. The Appellant stated that the court

referred the parties to mediation, leading to a final settlement as outlined in the

Minutes of Meeting dated 30.12.2017 between the home buyers and the Corporate

Debtor. The Appellant further elaborated that this settlement culminated into a

Tripartite Agreement between the Flat buyers, Operational Creditor and

Corporate Debtor dated 28.02.2018. The Appellant stated that following the

mediation and settlement, a consent decree was issued on 28.05.2018 by the Civil

Judge (Senior Division), Gautam Budh Nagar, in Civil Suit No. 460/2017.

8. The Appellant submitted that despite the mediation and settlement

between the Corporate Debtor and the home buyers, work at the project site came

to a complete halt due to the continued misdeeds of the Corporate Debtor. The

Appellant submitted that to resolve these issues, a full and final settlement

agreement was executed between the Appellant and the Corporate Debtor on

09.05.2018, which aimed to address all outstanding disputes and claims

comprehensively.

9. The Appellant submitted that a dispute arose between the Corporate

Debtor and the Operational Creditor concerning payments under the agreement

dated 28.05.2018. The Appellant stated that due to the non-payment of dues, the

Operational Creditor filed an application bearing IB No. 1059/ND/2018 in July

2018 before the Adjudicating Authority which was admitted under section 9 of

the code after passing an ex-parte order on 26.11.2018, appointing an Interim

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Resolution Professional (IRP) as proposed by the Operational Creditor and the

Corporate Debtor was subjected to CIRP.

10. The Appellant submitted that on 07.02.2019, the first meeting of the

Committee of Creditors (CoC) was conducted by the IRP and during the meeting,

the IRP recorded in paragraph 11 of the minutes that Ms. Shalini Singh, a Director

of Anindya Infrastructures Pvt. Ltd., stated that her company was carrying out the

construction of Tower T-9, which had been purchased from Shubhkamna

Buildtech Pvt. Ltd. Furthermore, she mentioned that the remaining five towers

were being managed on behalf of Shubhkamna Buildtech Pvt. Ltd. and SKCWA,

an Association of Flat Buyers, under orders from the District Court in Greater

Noida.

11. The Appellant submitted that it filed its claim as an Operational Creditor

in Form B before the IRP on 21.02.2019, providing all necessary particulars and

attaching relevant documents, including the Joint Development Agreement dated

06.03.2016 and the full and final settlement agreement dated 09.05 2018.

12. The Appellant submitted that the Resolution Professional, through an

email dated 21.04.2019, responded to the claim submitted by the Appellant in

Form B on 21.02 2019. The Resolution Professional informed the Appellant that

the claim could not be admitted based on the submitted documents. The

Resolution Professional observed that while Mr. Piyush Tiwari, the signatory to

the Joint Development Agreement dated 06.03.2016 and the full and final

settlement agreement dated 09.05.2018, as a Director of the Corporate Debtor had

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been disqualified as a Director under Section 164(2)(a) of the Companies Act,

2013, effective from 1st November 2015. Consequently, under Section 167(1)(a)

of the Companies Act, 2013, the Resolution Professional concluded that Mr.

Tiwari was not holding the position of Director at the time of executing these

agreements, rendering them unenforceable against the Corporate Debtor under

the doctrine of constructive notice. Additionally, the Resolution Professional

raised objections to Clauses 5, 11, and 13 of the Joint Development Agreement

dated 06.03.2018, stating that payment to an unspecified sister concern, which

could not be verified, did not constitute valid consideration under the Indian

Contract Act. However, the Resolution Professional indicated willingness to

reconsider the claim upon submission of further substantiating documents.

13. The Appellant submitted that several flat buyers challenged the order of

appointment of the IRP dated 26th November 2018 before the Adjudicating

Authority in Company Appeal (AT) (Insolvency) No. 471 of 2019. In its order

dated 10.05.2019, the Adjudicating Authority observed that "in the meantime,

construction, etc., of the flats must continue, and the Interim Resolution

Professional will ensure that the company remains a going concern and will take

assistance from the suspended Board of Directors, paid directors, and the

employees."

14. The Appellant submitted that despite the prevailing order of the

Adjudicating Authority dated 10.05.2019, which directed that construction work

must continue and the company remain a going concern under the supervision of

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the Resolution Professional, the Resolution Professional deliberately refused to

recognize the status of the Appellant which is evident from the minutes of the 3rd

CoC meeting dated 18.05.2019, which recorded allegations that Smt. Shalini,

Director of Anindya Infrastructures Pvt. Ltd., "forcibly entered into said property

and took possession of assets and premises by misbehaving with security

personnel." The Appellant contended that these allegations are baseless, as it was

already on record before the Resolution Professional that Smt. Shalini was the

Director of Anindya Infrastructures Pvt. Ltd., supported by Form B, the Joint

Development Agreement dated 06.03.2016, and the full and final settlement

agreement dated 09.05.2018.

15. The Appellant submitted that on 19.08.2019, the Adjudicating Authority

issued an order in the present proceedings, directing the issuance of bailable

warrants against Piyush Tiwari and Deep Tiwari, former Directors of

Shubhkamna Buildtech Pvt. Ltd. The Appellant submitted that the Directors are

still absconding, and there has been no communication whatsoever from the

Resolution Professional with the Directors of the Corporate Debtor. The

Appellant alleged that the Resolution Professional made no efforts to connect

with the office of the Corporate Debtor or to inquire about its accounts, payments,

documents, or agreements to verify the claims of flat buyers and other creditors

including those of the Appellant and buyers of flats in Tower T-9, which raises

concerns regarding the Resolution Professional's commitment to fulfilling the

responsibilities under the insolvency proceedings.

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Comp. App. (AT) (Ins.) No. 534 of 2021

16. The Appellant submitted that the Directors of the present Appellant have

faced legal actions from flat buyers of Tower T-9, who booked flats constructed

under the Joint Development Agreement dated 06.03.2018. These buyers have

raised issues that were settled through a Full and Final Settlement Agreement

dated 09.05.2018 with the Corporate Debtor. Complaints, proceedings under

Section 138 of the Negotiable Instruments Act, and FIRs have been lodged

against the Appellant for delays in the construction of flats in Tower T-9, leading

to the arrest of the Applicant by the police concerning flat bookings in this tower.

The Appellant highlighted that following the signing of the Final Settlement

Deed, the Corporate Debtor issued Builder Buyer Agreements directly in favor of

the allottees of flats in Tower T-9.

17. The Appellant submitted that construction work for Tower T-9 is currently

ongoing, executed by the Appellant through its contractor, Adstec. The site

displays flags and hoardings for Tower T-9 under the name "Anindya Suites,"

indicating that the project exists not only in documentation but also physically on

the ground. The Appellant noted that in an email dated 21.04.2019, the Resolution

Professional stated that the Appellant could present documents to support their

claims, however, when the Director of the Appellant visited the Resolution

Professional's office, she was neither recognized nor were the flat buyers of

Tower T-9 acknowledged. This exclusion was based on the assertion that the

signatories to the Joint Development Agreement, Full and Final Settlement

Agreement, and subsequent Builder Buyer Agreements were technically not

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Directors, despite their names appearing on the Registrar of Companies ('RoC')

website which raises concerns regarding the Resolution Professional's adherence

to due process and his commitment in recognizing legitimate claims associated

with Tower T-9 and its flat buyers.

18. The Appellant submitted that the matter regarding the alleged cash register

and its entries can only be clarified if the Resolution Professional gains access to

the register or if it is provided by the directors, representatives, account

department, or officers of the Corporate Debtor. The Appellant submitted that

however, in the present case, the directors are absconding, and no inquiry has

been conducted by the Resolution Professional to ascertain the status of allotment

of flats to the Appellant.

19. It is the case of the Appellant that in view of these circumstances, the

Appellant filed an application under Section 60(5) of the Code, 2016, read with

Rule 11 of the NCLT Rules, 2016, vide M.A. No. 369/2019 which was disposed

of by the Impugned order dated 17.03.2021.

20. The Appellant submitted that the Appellate Tribunal erred in rejecting its

claims under the Joint Development Agreement ('JDA') dated 06.03.2018 on the

hyper-technical ground of disqualification of the signatory directors, while

simultaneously permitting the CIRP proceedings to proceed based on agreements

executed during the same period by the very same disqualified directors.

21. The Appellant submitted that its claim could not have been rejected on the

ground of non-submission of documents that were in the possession of the

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Corporate Debtor and subsequently in the possession of the Resolution

Professional. The Appellant stated that the Adjudicating Authority erred in

inferring that the Appellant's claims were barred by law, contrary to the rationale

of Section 31 of the Code. The Adjudicating Authority did not decide the claim

on its merits but dismissed it on the ground that it was "hydra-headed," which is

arbitrary and unjust. The Appellant asserts that such a dismissal undermines the

principles of fairness and due process enshrined in insolvency proceedings.

22. The Appellant submitted that the Adjudicating Authority also erred in

applying the principles laid down in the judgment of Essar Steel vs Satish kumar

Gupta [(2020)8 SCC 531] which pertain to successful resolution applicants,

despite the fact that in the present case, the application under Section 30(6) of the

Code, was then pending, and the resolution plan was not approved to qualify as a

successful resolution plan.

23. Concluding his arguments, the Appellant urged this Appellate Tribunal to

dismiss the Impugned Order and allow its appeal.

24. Per Contra, the Respondent denied all the averments made by the Appellant

in the present appeal.

25. The Respondent No. 1 submitted that the Corporate Debtor, incorporated

on 08.12.2006 under the provisions of the Companies Act, 1956, is engaged in

the real estate business with its registered office located at 197-E, Pocket-IV,

Mayur Vihar Phase-I, Delhi. The Respondent No.1 stated that at the time of

insolvency proceedings, the Corporate Debtor had two ongoing real estate

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projects: Shubhkamna Techomes Project situated at Plot GH 05B, Sector-137,

Noida, and Shubhkamna City Project located at Plot GH02A, Sector-1, Greater

Noida West. These projects form a critical part of the Corporate Debtor's

operations and are central to the claims and disputes arising in the present

proceedings.

26. The Respondent No.1 submitted that an application for the commencement

of the CIRP was filed by an Operational Creditor, Concord Infrastructure Pvt.

Ltd., under Section 9 of the Code. The CIRP was initiated by the Adjudicating

Authority through its order dated 26th November 2018. In the same order, Ms.

Gurkamal Hora Arora (Registration No. IBBI/IPA-001/IP-P00588/2017-

18/11958) was appointed as the IRP. Subsequently, public announcements in

Form A were published twice, on 29th November 2018 and 5th January 2019, in

compliance with the procedural requirements under the Code.

27. The Respondent No. 1 submitted that the first meeting of the CoC was

conducted by the IRP on 7th February 2019 and during this meeting, the CoC

resolved to replace the then IRP with Mr. Anand Sonbdhara as Respondent No. 1

as the Resolution Professional for the Corporate Debtor, a decision confirmed by

the Adjudicating Authority through its order dated 12.02.2019. Subsequently, the

second CoC meeting was conducted by Respondent No. 1 as Resolution

Professional, on 11.03.2019. The key agenda items discussed included the

preparation of the Information Memorandum, transfer of documents from Interim

Resolution Professional to Resolution Professional, appointment of Registered

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Valuers and forensic auditors, and approval of resolutions for the bid evaluation

matrix, Form G, eligibility criteria, and other procedural matters essential to

progressing the CIRP. These steps were duly put to vote in accordance with the

provisions of the Code.

28. The Respondent No. 1 submitted that the third meeting of the CoC was

conducted on 18.05.2019, wherein several critical issues were deliberated,

including the claims received, fixing the performance security amount, extending

the timelines for submission of Expressions of Interest ('EoI'), and seeking an

extension of the CIRP period beyond 180 days for an additional 90 days. The CoC

noted that claims had been provisionally admitted by the Resolution Professional,

comprising 1,264 claims from home buyers, four each from financial creditors

and operational creditors, and 17 from workmen/employees. Further, during this

meeting, M/s Ravi Ranjan & Co. and Alamak Capital Advisors Pvt. Ltd. were

appointed as registered valuers to conduct the valuation of all three classes of

assets of the Corporate Debtor. Additionally, the appointment of M/s Hari Bhakti

& Co. LLP as Forensic Auditor for Shubhkamna Buildtech Private Limited was

confirmed. These decisions were made to ensure compliance with Code, while

progressing towards resolution in a structured and transparent manner.

29. The Respondent No. 1 submitted that the resolution plans submitted by the

two prospective resolution applicants (PRA)were opened during the 5th meeting

of the CoC and the key aspects of the respective plans were discussed in detail

during the meeting. Subsequently, a comparative note highlighting the essential

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points of both resolution plans was circulated among the Authorized

Representative, homebuyers, and other CoC members for their review and

consideration and the Resolution Professional undertook a detailed deliberation

to ensure that the submitted plans complied with the terms and conditions

specified in the Request for Resolution Plan ('RFRP') published on 07.08.2019.

30. The Respondent No. 1 submitted that the resolution plan in the captioned

matter was approved by the CoC with a voting percentage of 87.57%, which

included 66.70% of homebuyers (creditors in a class) voting in favor of the plan.

Following this, on 09.10.2019, the CoC approved the resolution plan, and the

Resolution Professional filed an application under Section 31 of the Code, on

23.10.2019, seeking approval from the Adjudicating Authority which was later

approved by the Adjudicating Authority.

31. The Respondent No.1 further submitted that after the approval of the

resolution plan by the CoC, the Resolution Professional ensured compliance with

procedural requirements and addressed claims submitted during the CIRP. The

Respondent No.1 clarified that the Appellant submitted its claims as an unpaid

operational creditor in Form B on 24.02.2019, however, in response to this claim,

the Resolution Professional sent a detailed reply on 11.04.2019, stating that the

documents submitted were insufficient to substantiate the claim.

32. The Respondent No. 1 submitted that following the email reply sent by the

Resolution Professional on 11.04.2019 to the Appellant seeking more information

and directions the Appellant failed to provide any additional documents to

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substantiate its claim and furthermore, the Appellant did not approach the

Adjudicating Authority for any remedy against the rejection of its claim by the

Resolution Professional. On 27.08.2019, the Appellant made another inquiry

regarding the status of their claim without submitting the requested documents. It

is the case of the Appellant that he as the Resolution Professional responded on

the same day to the Appellant, referring the Appellant to the detailed reply sent

on 11.04.2019 but the Appellant failed to respond with the required clarifications

or documents for over five months. Subsequently, in September 2019, while

deliberations over the Resolution Plan by the CoC were ongoing, the Appellant

filed an application before the Adjudicating Authority which was listed on

27.09.2019. The Respondent No.1 highlighted that the Resolution Plan was

approved by the CoC on 17.102019 with a voting share of 87.57%. It is also the

case if the Respondent No.1 that the Appellant is barred from raising grievance at

this belated stage. The issue of "filing of claims" has already been settled by this

Appellate Tribunal in its order dated 30.07.2021 in case Mukul Kumar vs. M/s

RPS Infrastructure Ltd passed in Company Appeal (AT)(Ins.) No. 1050 of

2020. This precedent underscores that claims not properly filed within the

stipulated timeline cannot be entertained after the approval of a Resolution Plan

by the CoC.

33. The Respondent No. 1 submitted that the Resolution Professional is not

obligated to accept any claims filed after the stipulated period outlined in

Regulation 12(2) of the Insolvency and Bankruptcy Board of India (Insolvency

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Resolution Process for Corporate Persons) Regulations, 2016 (CIRP

Regulation,2016). The Respondent No.1 submitted that the Resolution

Professional lacks the discretion to admit claims submitted after the expiration of

the 90-day period as per the applicable CIRP regulations.

34. The Respondent No. 1 submitted that the Appellate Tribunal , in its order

dated 18th June 2021, stated that-

"10. We find that the reasons recorded by the Adjudicating Authority have

substance and if at belated stage when the Resolution Applicants are already

before the Committee of Creditors with their Resolution Plan(s) if new claims

keep popping up and are entertained, the CIRP would be jeopardized and

Resolution Process may become more difficult. Keeping in view the object of the

'I&B Code' which is Resolution of the Corporate Debtor in time bound manner to

maximize value, if such requests of applicants like Appellant are accepted the

purpose of 'I&B Code' would be defeated."

35. The Respondent No. 1 submitted that, as per Clause 5 of the Joint

Development Agreement dated 06.03.2018 executed between the Appellant and

the Corporate Debtor, the claimed debt was not owed by the Corporate Debtor to

the Appellant. Instead, it was explicitly stated that the payment of Rs. 2.5 Crores

were made by the sister concern of the Corporate Debtor to the sister concern of

the Appellant and would be considered as payment under the Joint Development

Agreement dated 06.03.2018. The Respondent No.1 submitted that the Appellant

cannot be classified as a creditor of the Corporate Debtor.

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Comp. App. (AT) (Ins.) No. 534 of 2021

36. The Respondent No. 1 submitted that the Appellant has failed to provide

any details regarding transactions in which money was remitted to the Corporate

Debtor. Furthermore, no proof of disbursement or evidence of any payment was

attached to the claim form submitted by the Appellant. The Respondent No.1

highlighted that the sister concern of the Corporate Debtor is a distinct legal entity

and therefore, any claim related to alleged transactions with the sister concern

cannot be considered a valid claim in the CIRP of the Corporate Debtor.

37. The Respondent No. 1 submitted that the settlement agreement dated

09.05.2018, signed by Mr. Piyush Tiwari on behalf of the Corporate Debtor, is

not tenable in law as Mr. Tiwari was disqualified from acting as a director by the

RoC for the period 01.11.2015 to 31.10.2020 under Section 164(2)(a) of the

Companies Act, 2013. The Respondent No.1 clarified that as per the Doctrine of

Constructive Notice, documents filed with the Registrar are deemed public

documents, and anyone dealing with the company is presumed to have reviewed

and understood these documents in their true perspective. Moreover, the list of

disqualified directors for the relevant period was available on the Ministry of

Corporate Affairs (MCA) website, making it a public document. The Respondent

No.1 emphasized that the Appellant, therefore, had an obligation to verify the

directorship status of Mr. Piyush Tiwari before entering into any agreement with

him on behalf of the Corporate Debtor and the failure to exercise due diligence

renders the agreement legally invalid and unenforceable.

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Comp. App. (AT) (Ins.) No. 534 of 2021

38. The Respondent No. 1 submitted that the list of disqualified directors,

including their details, was updated on the Ministry of Corporate Affairs (MCA)

website on 12th September 2017. This information was affirmed by the MCA

through an affidavit filed before the Adjudicating Authority in the present case.

The Respondent No.1 also submitted that the Appellant has forcefully taken

possession of a portion of the premises belonging to the Corporate Debtor, despite

an order passed by the Adjudicating Authority against the Appellant in CA No.

86/2019, and the Appellant had failed to vacate the said property to date. The

Respondent No.1 had also written to the relevant authorities seeking assistance in

vacating the premises, but no action has been taken so far.

39. The Respondent No. 1 submitted that the tripartite arrangement between

the Corporate Debtor, Operational Creditor, and Shubhkamna City Welfare

Association holds no relevance in the present case. The Respondent No.1

emphasized that as a result of fact, the members of Shubhkamna City Welfare

Association passed a resolution expressing their support and confidence in the

CIRP of the Corporate Debtor.

40. The Respondent No. 1 submitted that the Respondent No.1 does not

possess any details regarding the alleged letter of intent, and it has no bearing on

the subject matter of the present application. The Respondent No.1 further

submitted that the said letter of intent was executed with a different entity,

namely Shubhkamna Advert Buildtech Limited, which is a separate legal entity

distinct from the Corporate Debtor, as such, the letter of intent is irrelevant to the

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current proceedings and cannot be considered in relation to the CIRP of the

Corporate Debtor.

41. The Respondent No. 1 submitted that it is unclear which subsidiary the

Appellant's sister concern allegedly made payments to, and no specific details

have been provided to substantiate these claims. The Respondent No.1 submitted

that the Joint Development Agreement dated 06.03.2018 cited by the Appellant

has no bearing on the current dispute raised in this application. The Respondent

No.1 emphasized that the said Joint Development Agreement was executed by a

disqualified director of the Corporate Debtor, Mr. Piyush Tiwari, and therefore

lacks legal sanctity. The Respondent No.1 alleged that the Appellant's actions in

collusion with Mr. Tiwari was deliberately done to raise frivolous liabilities upon

the Corporate Debtor which warrant scrutiny. The Respondent No.1stated that

Mr. Tiwari had been disqualified by the MCA, and it remains ambiguous how the

Appellant proceeded to enter into the JDA under such circumstances. Moreover,

the Appellant has admitted that the consideration was received by their sister

concern, which is a separate legal entity from the Corporate Debtor. Under

corporate law principles, debts owed to one entity cannot be presumed to be debts

owed to another distinct entity.

42. The Respondent No. 1 specifically denied that the Appellant has lawfully

taken possession of the site bearing No. GH-02A, Sector-1, Greater Noida. It is

submitted that a part of the project site office is currently under the illegal

possession of the Appellant, who has no rightful claim over the said part of the

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site, as it belongs to the Corporate Debtor. The Respondent No.1 brought to the

attention of this Appellate Tribunal that there is no record indicating lawful

transfer or handing over of possession of the site by the Corporate Debtor to the

Appellant. The Respondent No.1 reiterated that an order/direction has already

been passed by this Appellate Tribunal against the Appellant, directing it to vacate

the portion of the site it is unlawfully occupying. Despite this order, the Appellant

continues to retain possession in violation of legal directives, obstructing the

CIRP.

43. The Respondent No. 1 submitted that it is incorrect to suggest that any

mediation was lawfully or legitimately entered into with the Appellant. The

Mediation Proceeding Report dated 21.05.2018 was signed by Mr. Piyush Tiwari,

who had already been disqualified as a director by the MCA at the time of signing

and the Appellant was not a party to the said mediation proceedings, which

involved only the Shubhkamna City Welfare Association. The Respondent No.1

stated that the Appellant merely signed the Mediation Report as a witness, and

therefore, it has no bearing on the present subject matter of dispute. The

Respondent No.1 castigated the Appellant's attempt to mislead this Appellate

Tribunal by implying that they were a party to these proceedings and in a previous

appeal filed by a group of homebuyers, Tribunal had already addressed and

dismissed similar issues related to the settlement in question.

44. The Respondent No. 1 submitted that the purported "full and final

settlement" dated 09.05.2018 was entered into by a disqualified director of the

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Corporate Debtor, rendering it non-est and devoid of any legal sanctity. The

Respondent No.1 further submitted that the Appellant's conduct raises serious

concerns, as they have entered into multiple agreements with disqualified

directors of the Corporate Debtor. The Respondent No.1 stated that the

information regarding disqualified directors was made publicly available on the

MCA website on 12.09.2017 and was affirmed by the MCA through an affidavit

filed before the Adjudicating Authority. This public disclosure imposes an

obligation on parties dealing with such directors to exercise due diligence, which

the Appellant has failed to do and consequently, the settlement agreement cited

by the Appellant has no bearing on the present matter and cannot be relied upon

in these proceedings.

45. The Respondent No. 1 submitted that the Appellant failed to provide any

of the information requested by the Resolution Professional. Furthermore, the

Respondent No.1 asserts that the Appellant's claim regarding ongoing

construction work is misleading and to substantiate this, the Respondent No.1

referred to the email sent by the IRP to Ms. Shalini, Director of the Appellant, on

08.12.2018. demonstrating the IRP's attempts to obtain necessary information

from the Appellant, which were not adequately addressed.

46. The Respondent No. 1 clarified that no substantiation of the claim was

provided by the Appellant. The Resolution Professional emphasized that the Joint

Development Agreement dated 06.03.2018 and the full and final Settlement dated

09.05.2018 are non-est and legally untenable.

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Comp. App. (AT) (Ins.) No. 534 of 2021

47. The Respondent No. 1 stated that from the initial pages of the alleged

Builder Buyer Agreements which the Corporate Debtor does not indicate any

liability toward the Appellant. Moreover, in the absence of receipts for money

paid or bank transaction records, the Corporate Debtor does not have any such

alleged liability. The Respondent No.1 stated that it is also unclear when these

Builder Buyer Agreements were entered into and if they were signed by a lawful

Authorized Representative of the Corporate Debtor.

48. Concluding his arguments, the Respondent No.1 requested this Appellate

Tribunal to dismiss this appeal with exemplary costs.

Findings

49. The Appellant had challenged the Impugned Order dated 17.03.2021

basically on two primary grounds, based on which we find that, following issues

are required to be examined and determined to decide the present appeal.

Issue No. (I) Whether, the claims of the Appellant submitted to the Respondent

No. 1 should have been accepted based on various documents submitted by the

Appellant or not.

Issue No. (II) Whether, disqualification of Mr. Piyush Tiwari, the former

director of the Corporate Debtor, was only technical in nature and therefore, the

agreement signed by the Appellant with Mr. Piyush Tiwari remained valid or not.

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Comp. App. (AT) (Ins.) No. 534 of 2021

50. Since, both these issues are inter-dependent, inter-connected and inter-

related, we shall deal these issues in conjoint and combined manner in the

following discussions.

51. It is the case of the Appellant that it has submitted various documents to

substantiate its claim, inter-alia, including joint development agreement dated

06.03.2016 signed between the Appellant and the Corporate Debtor and therefore

that its claims are squarely covered based on this joint development agreement

dated 06.03.2018.

52. Since, the joint development agreement dated 06.03.2018 seems to be the

foundation of the present appeal, we would like to refer to the relevant part and

clauses of the joint development agreement dated 06.03.2018 which are

reproduced as under :-

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Comp. App. (AT) (Ins.) No. 534 of 2021

Page 23 of 38 Comp. App. (AT) (Ins.) No. 534 of 2021

Page 24 of 38 Comp. App. (AT) (Ins.) No. 534 of 2021

"Clause 4. That, the Developer shall make the total payment of Rs. 1,500/- (Rupees One Thousand Five Hundreds only) per square feet of FAR to be utilised by the Developer for the construction of the Studio Apartments in the said Tower totalling to approximately Rs. 11,27,56,000/- (Rupees Eleven Crores Twenty Seven Lakhs Fifty Six Thousands only) as consideration under the present agreement towards acquiring the exclusive rights for sale, construction and development of the studio apartments to be constructed in the said Tower along with the duty to complete the development and construction of the whole of the said Tower including the parking and the commercial areas contained in the said Tower. The said consideration shall be paid by the Developer lo the owner in a maximum period of 12 (twelve) months from the date of execution of the present Construction Contract (Agreement). The cost of Construction and Development of the Studio Apartments and the two basement parking floors shall be borne and paid exclusively by the Developer. The developer shall also be allotted 176 covered parkings in the said Tower in lieu of the Construction and Development of two basements for the Parking in the said Tower. It is agreed by and between the parties that the cost of construction of the commercial area shall be paid by the owner to the Developer directly on actual basis. It is expressly agreed by and between the Parties that the service FAR has not been included in the above mentioned calculations on the premise however the same shall be included for the purpose of calculation of the total consideration, at the same rate which has been agreed between the parties, payable under the present agreement in

Page 25 of 38 Comp. App. (AT) (Ins.) No. 534 of 2021

case the same is not granted free of cost by the land owning Authority.

Clause 5. That, the Developer had already made a payment of Rs. 2,50,00,000/- (Rupees Two Crores Fifty Lakhs Only) to the sister concern of the Owner through its sister concern in the said payment shall be considered to be a payment made by the Developer to the owner under the present agreement. The parties shall take steps to cancel/terminate all the prior agreements, MO Us and/or LOis executed between the parties or between their sister concerns.

Clause 11. All of the collection received by the sale and marketing of the units of the said Tower shall be deposited in an escrow account lo be opened by the owner in the name of the said project/Tower. Two accounts one each of the Owner and the Developer shall be connected with the said Escrow account (designated accounts). All the collections received in the said escrow account shall be distributed in equal proportion to the owner and the Developer i.e. 50% each on a daily basis and shall be transferred into their respective designated accounts. The escrow agent shall be given strict instructions in this regard. The above-mentioned escrow account shall be closed only after all the payments contemplated under the present agreement are paid by the Developer to the Owner. It is however agreed by and between the parties that the first Rs. 2,50,00,000/- (Rupees Two Crores Fifty Lakhs Only) collected in the said Escrow account shall be transferred to the designated/connected account of the Developer and thereafter all the amounts

Page 26 of 38 Comp. App. (AT) (Ins.) No. 534 of 2021

collected in the said escrow account shall be distributed in the abovesaid proportion till all the payments contemplated under the present agreement arc paid by the Developer to the O\.vner. The Parties agree that such Escrow Account shall be opened by the Developer \1vithin a period of two weeks from the date of the present Agreement.

Clause 13. The parties agree that all of the money shall be collected by the Developer and Guarantors from the prospective Developers only in form of crossed cheques/pay orders/demand drafts drawn in favour of the Developer Company. All such payments shall be deposited in a separate escrow account mentioned above and opened in the name of the Developer Company. For clarity, the schedule of the payment under the present Agreement shall also be shared with the said escrow Agent/Bank."

Page 27 of 38 Comp. App. (AT) (Ins.) No. 534 of 2021

53. From the above, we note that the joint development agreement dated

06.03.2016 was signed by Mr. Piyush Tiwari, who has signed as director of

Subhkamna Buildtech Pvt. Ltd., and by Smt. Shalini Singh, Director of Anindya

infrastructure Pvt. Ltd., the Appellant herein.

54. It is noted that M/s Subhkamna Buildtech Pvt. Ltd., the Respondent No. 1

herein is stated to be "owner or the first party", whereas Anindya infrastructure

Pvt. Ltd., the Appellant herein is stated to be "developer or the second party" and Page 28 of 38 Comp. App. (AT) (Ins.) No. 534 of 2021

Smt. Shalini Singh w/o Mr. Ranjan Kumar Singh alongwith Mr. Ranjan Kumar

Singh are stated to be "conforming parties/ guarantors".

55. The Corporate Debtor was allotted a plot of land bearing GH-02A, Sector -

1, Greater Noida, District Gautambudhnagar, U.P. admeasuring about 33538 sq.

mtr. and was developing a real estate project under the name of Subhkamna

Buildtech Pvt. Ltd. (Group Housing) at the said plot. It is further brought out that

the Corporate Debtor wanted to engage a developer to construct, develop and

market one of the towers of the project consisting of studio apartment,

commercial area and the basement parking, to be constructed and developed by

the developer in fully furnished condition.

56. We note that the Appellant is stated to be a developer in joint developer

agreement. It has further been mentioned that the developer were given

construction and marketing rights of 176 studio apartments utilizing 6983.52 sq.

meter i.e., 75,170 sq. ft. of FAR.

57. It is noted from the joint development agreement dated 06.03.2018 that it

seems that the Appellant had already made a payment of Rs. 2.5 Crores to the

sister concern of the owner i.e., the Corporate Debtor

58. Clause 11 of the Joint Development Agreement dated 06.03.2018 stipulates

that all money received by the sale and marketing of the units of the said tower

were to be deposited in the escrow account and to be distributed amongst the

Appellant and the Respondent No. 1 in the ratio of 50% each on daily basis in

Page 29 of 38 Comp. App. (AT) (Ins.) No. 534 of 2021

their respective accounts after paying first Rs. 2.5 Crores to the Appellant from

the escrow account.

59. This escrow account was to be opened by the developer within a period of

two weeks from the date of joint development agreement signed on 06.03.201,

which was not opened by the Appellant.

60. During pleading before us, it has been brought out that as stipulated in

Clause 5 of the Joint Development Agreement dated 06.03.2018 between the

Appellant and the Corporate Debtor, the purported debt forming the basis of the

Appellant's claim is, in reality, owed to the sister concern of the Corporate Debtor

by the Appellant's sister concern, as the alleged payments related to this

transaction was directed to Shubhkamna Advert Buildtech Pvt Ltd, the sister

concern of the Corporate Debtor, and not to the Corporate Debtor itself,

Shubhkamna Buildtech Pvt Ltd. Thus, it is inferred that the Appellant does not

have the necessary direct privity of contract with the Corporate Debtor concerning

the present alleged debt and, as a result, the alleged claimed debt does not qualify

as a financial creditor of the Corporate Debtor as defined under Section 5(7) of

the Code, which reads as under :-

"5 (7)- "financial creditor" means any person to whom a financial debt is owed and includes a person to whom such debt has been legally assigned or transferred to;"

(Emphasis Supplied)

Page 30 of 38 Comp. App. (AT) (Ins.) No. 534 of 2021

61. While examining the attached joint development agreement dated

06.03.2018, we observe that as per Clause 5, the Appellant is said to have paid

Rs. 2.5 Crores to sister concern of the Corporate Debtor. Interestingly, Clause 11

further states that Rs. 2.5 Crores paid by the developer i.e., Appellant herein will

be repaid to the Appellant. We fail to understand the logic of such circuitous

transaction, which denotes the purpose of such alleged joint development

agreement dated 06.03.2018 was something else. This does not augur well for

the cause of the Appellant.

62. We have noted that the Appellant has failed to furnish any details of

transactions evidencing the remittance of funds to the Corporate Debtor and no

proof of disbursement or payment has been annexed with the claim form to

substantiate the alleged debt. There cannot be any dispute that the sister concern

of the Corporate Debtor is a distinct legal entity and any claim arising from

transactions with such a sister concern cannot be treated as a valid claim in the

CIRP of the Corporate Debtor, thereby making the claim submitted by the

Appellant non-est in law. We have noted that in terms of Clause 11 of the Joint

Development Agreement 06.03.2018, the parties were required to open an Escrow

account within two weeks, however, the same was admittedly never opened,

making it evident that no disbursement was ever made to the Corporate Debtor,

and the clauses of the Joint Development Agreement were not honoured. This

absence makes it clear that the Joint Development Agreement dated 06.03.2018

Page 31 of 38 Comp. App. (AT) (Ins.) No. 534 of 2021

was never acted upon, rendering the Appellant's claims unsubstantiated and

legally untenable.

63. We observe that the Appellant has allegedly paid the consideration

amount, as stipulated by the Joint Development Agreement to the sister concern

of the Corporate Debtor. We also note submissions of the Respondent No. 1 that

even the ledger account maintained with the Corporate Debtor's sister concern

clearly demonstrates that all payments were allegedly made in cash to

Shubhkamna Advert Buildtech Ltd as such these transactions have no connection

to the Corporate Debtor, Shubhkamna Buildtech Pvt Ltd, and no amount has been

disbursed by the Appellant to the Corporate Debtor. This fact demonstrates the

lack of a valid financial debt owed by the Corporate Debtor to the Appellant.

64. We note that as per Regulation 12 of the CIRP Regulations, 2016, every

creditor has to submit proof of its claim to the IRP, alongwith relevant supporting

documents. The submission of this proof of claim, along with the necessary

supporting documentation, is a critical requirement under the Code, as it enables

the IRP to properly scrutinize the claim, assess its validity, and determine the

admissibility of the claim submitted by the creditors of the Corporate Debtor.

Without proper proof of claim and supporting documents, the claim cannot be

verified or admitted. From various pleadings and correspondence exchange

between the Respondent No. 1/ Resolution Professional and the Appellant, it

seems that the Appellant failed to establish its claims.

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Comp. App. (AT) (Ins.) No. 534 of 2021

65. We have noted during the hearing that the Respondent No.1 stated that

upon receiving the claim from the Appellant, the Respondent No.1 requested the

Appellant to provide any lease deed or tenancy agreement signed between the

parties for the allotment of space, if any, however, the Appellant failed to provide

any such lease deed or tenancy agreement, which also does not support the cause

of the Appellant.

66. We also take into consideration the fact that, after verifying the documents

provided by the Appellant, the Respondent No.1 informed the Appellant via email

dated April 11, 2019, that their claim could not be verified as the documents

produced by the Appellant were executed by Mr. Piyush Tewari, acting as a

Director of the Corporate Debtor, where as Mr. Piyush Tiwari had already been

disqualified as a Director of the Corporate Debtor under Section 164(2)(a) of the

Companies Act, 2013, as of November 1, 2015. This disqualification rendered the

Agreements supporting the Appellant's claim non-enforceable as on the date of

their execution, as Mr. Piyush Tewari lacked the authority to act as an Authorized

Signatory of the Corporate Debtor and execute such documents. Consequently,

the agreements lack legal validity.

67. At this stage, we will take into consideration Section 164(2)(a) and Section

167 (1) of the Companies Act, 2013 which reads as under :-

"164. Disqualifications for appointment of director. -- (2) No person who is or has been a director of a company which--

Page 33 of 38 Comp. App. (AT) (Ins.) No. 534 of 2021

(a) has not filed financial statements or annual returns for any continuous period of three financial years;

167- Vacation of office of director. -- (1) The office of a director shall become vacant in case--

(a) he incurs any of the disqualifications specified in section 164:

[Provided that where he incurs disqualification under sub- section (2) of section 164, the office of the director shall become vacant in all the companies, other than the company which is in default under that sub-section];

(b) he absents himself from all the meetings of the Board of Directors held during a period of twelve months with or without seeking leave of absence of the Board;

(c) he acts in contravention of the provisions of section 184 relating to entering into contracts or arrangements in which he is directly or indirectly interested;

(d) he fails to disclose his interest in any contract or arrangement in which he is directly or indirectly interested, in contravention of the provisions of section 184;

(e) he becomes disqualified by an order of a court or the Tribunal;

(f) he is convicted by a court of any offence, whether involving moral turpitude or otherwise and sentenced in respect thereof to imprisonment for not less than six months:

[Provided that the office shall not be vacated by the director in case of orders referred to in clauses (e) and (f)--

(i) for thirty days from the date of conviction or order of disqualification;

(ii) where an appeal or petition is preferred within thirty days as aforesaid against the conviction resulting in sentence or order, until expiry of seven days from the date on which such appeal or petition is disposed of; or

(iii) where any further appeal or petition is preferred against order or sentence within seven days, until such further appeal or petition is disposed of.

(g) he is removed in pursuance of the provisions of this Act;

(h) he, having been appointed a director by virtue of his holding any office or other employment in the holding, Page 34 of 38 Comp. App. (AT) (Ins.) No. 534 of 2021

subsidiary or associate company, ceases to hold such office or other employment in that company."

(Emphasis supplied)

68. We note that as per Section 164(2)(a) read with Section 167(1) of the

Companies Act, 2013, Mr. Piyush Tiwari was disqualified from acting as a

director with effect from November 1, 2016, due to the non-filing of Financial

Statements and Annual Returns for three consecutive years. This formal

declaration by the MCA further reinforces the Respondent No.1's contention that

agreements executed by Mr. Tiwari during his period of disqualification are

invalid.

69. We observe that Respondent No. 1 had communicated his doubts regarding

the enforceability of Joint Development Agreement dated 06.03.2018. It has been

brought to our notice that the Appellant acknowledged these concerns of the

Respondent No. 1 through an email dated 28.08.2019, but failed to provide further

clarifications or supporting documents for a long time and consequently, the

claims remained unverified and non-compliant with Regulation 12 of the CIRP

Regulations, 2016. We observe that the Adjudicating Authority in the Impugned

Order dated 13.03.2021 concluded that requisite documents were not provided to

substantiate the Appellant's claim, thereby justifying dismissal of the Claim

application filed by the Appellant. The relevant para of the Impugned Order reads

as under:

"35. Considering the documents on record-and submissions made by the counsels, we find force in the contention of the

Page 35 of 38 Comp. App. (AT) (Ins.) No. 534 of 2021

Respondent that the resolution professional has sought for the clarifications/ documents with regard to the claim. The Applicant sat on their claim for months, without furnishing the proof substantiating the claim, owing to which their claim could not be verified. In the absence of documents supporting the claim of the Applicant, the RP cannot process and accept the claim of the Applicant."

(Emphasis Supplied) We cannot find any error in the Impugned Order in this account.

70. We also note that the 6th CoC meeting was held on 09.10.2019, during

which the Resolution Plan submitted by the Consortium of Executive of

Association of Home Buyers, Mr. Surender Kumar Singhal, and Mr. Sunil Kumar

Agarwal was put to vote and approved with an affirmative voting percentage of

87.60%, making them the Successful Resolution Applicant for the Corporate

Debtor. Subsequently, Respondent No. 1 filed an application bearing C.A. No.

485/ND/2019 under Section 30(6) read with Section 31(1) of the Code, seeking

approval of the Resolution Plan by the Adjudicating Authority. The Resolution

Plan was duly approved by the Adjudicating Authority vide its Order dated

12.09.2022.

71. It is the case of the Appellant that its claims were not considered rightfully

by the Appellant and the Adjudicating Authority. It is further the case of the

Appellant that its claims did not get extinguished. In this connection, we note that

the Hon'ble Supreme Court of India, in a catena of judgments, has clearly held

that once a Resolution Plan stand approved under Section 31 of the Code, all

Page 36 of 38 Comp. App. (AT) (Ins.) No. 534 of 2021

claims not included in the plan stand extinguished, holding that claims post-

approval would amount to "hydra head popping," creating uncertainty regarding

the liabilities and amounts payable by the SRA, who takes over the Corporate

Debtor's business. This principle ensures that the SRA begins operations with a

clean slate, free from pre-existing liabilities, thereby upholding the sanctity and

finality of the approved Resolution Plan.

72. We note that the Adjudicating Authority, vide its well-reasoned Order

dated 17.03.2021, rightly observed that the Respondent No.1 had, through an

email dated 11.04.2019, clearly communicated to the Appellant that their claim

would be reconsidered upon submission of relevant documents substantiating the

claim, however, despite this communication, the Appellant failed to act promptly

and sat on their claim for months without furnishing the requisite documents. This

inaction prevented the Respondent No.1 from verifying the Appellant's claim,

thereby justifying the observations and conclusions made by the Adjudicating

Authority in dismissing the claim application.

73. Thus, we note that the Appellant failed to provide relevant information and

documents to establish its claims and we also reiterate that there has been no

evidence of any payment made by the Appellant to the Corporate Debtor directly.

The alleged claimed payments made by the sister concern of the Appellant/

Appellant to the sister concern of the Corporate Debtor, does not translate into

debts. We also noted from the submissions of the Respondent No.1 that even the

books of sister concern of the Corporate Debtor do not corroborate the claims of

Page 37 of 38 Comp. App. (AT) (Ins.) No. 534 of 2021

the Appellant. The fact that alleged documents furnished by the Appellant i.e.

Joint Development Agreement dated 06.03.2018 to the Respondent No.1 were

non est as counter party on behalf of the Corporate Debtor i.e. Mr. Piyush Tiwari

had already ceased to be the Director of Corporate Debtor in the terms of Section

164 and Section 167 of the Companies Act, 2013.

74. Thus, we do not find any merit in the appeal and same stand rejected. No

Cost. IA, if any, are closed.

[Justice Rakesh Kumar Jain] Member (Judicial)

[Mr. Naresh Salecha] Member (Technical)

[Mr. Indevar Pandey] Member (Technical) Sim

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