Devendra Singh vs M/S Granite Gate Properties Pvt Ltd

NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI Company Appeal (AT) (Insolvency) No.1477 of 2024 (Arising out of Order dated 24.07.2024 passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi Bench (Court-II) in Company Petition No.(IB)-1248(PB)/2018)

IN THE MATTER OF: Devendra Singh ...Appellant

Versus

Granite Gate Properties Pvt. Ltd. ...Respondent

Present:

For Appellant : Mr. Palash S. Singhai, Ms. Pragya Prakash Upadhyay and Mr. Harshal Sareen, Advocates. For Respondents : Mr. Rachit Mittal, Mr. Parish Mishra, Mr. Kanishk Raj and Mr. Adarsh Srivastava, Advocate for Noida Authority.

Ms. Ridhima Verma, Ms. Aparjit Singh, Mr. Shashwat Tripathi, Ms. Madhu Ayachit, Advocates for R-6.

Mr. Sumant Batra, Mr. Sanyam Saxena, Mr. Sahil Sethi, Ms. Nidhi Yadav, Mr. Shivam Sharma and Mr. Nubair Alvi, Advocates for RP.

JUDGMENT

ASHOK BHUSHAN, J.

This Appeal by erstwhile Resolution Professional ("RP") of the

Corporate Debtor ("CD") - M/s Granite Gate Properties Pvt. Ltd. has been

filed challenging the order dated 24.07.2024 passed in different IAs in

Company Petition No.(IB)-1248(PB)/2018. The Appellant in Appeal has

prayed for following reliefs:

Company Appeal (AT) (Ins.) No.1477 of 2024 1

"(a) Direct that the observations made in para. 63, 64 and 67 of the Impugned Order dated 24.07.2024 against the Appellant be expunged;

(b) Direct that the concession wrongly recorded on behalf Ld. Counsel of the Appellant in para. 70 of the Impugned Order to the effect that NOIDA would be paid two instalments of lease premium which became due during CIRP as part of CIRP Costs, be expunged;

(c) Set aside the Impugned Order dated 24.07.2024 to the extent that it:

(i) It directs payments to NOIDA of instalments of lease premium which became due during CIRP as part of CIRP Costs as mentioned in para 79 (h); and

(ii) It suo motu replaces the Resolution Professional appointed by the CoC as mentioned in para 79 (b).

(d) The Hon'ble Appellate Authority be pleased to pass any other Order in the facts and circumstances of the present Appeal and in the interest of the Justice and Equity."

2. During the course of submissions, learned Counsel for the

Appellant has confined his Appeal only to prayer (a). We need to notice

the relevant facts and sequence of the event giving rise to the impugned

order for deciding the issues raised in the Appeal:

(i) On an Application filed by Homebuyer of the CD, Shinoj

Koshy, under Section 7 of the Insolvency and Bankruptcy

Code, 2016 (hereinafter referred to as the "IBC"), the

Corporate Insolvency Resolution Process ("CIRP") against the

CD commenced by an order dated 10.01.2019. Shri Prabhjit

Singh Soni was appointed as Interim Resolution Professional

("IRP").

Company Appeal (AT) (Ins.) No.1477 of 2024 2

(ii) In the 2nd Meeting of the Committee of Creditors ("CoC") held

on 19.03.2019, appointment of two Valuers by Prabhjit Singh

Soni was approved. The two Valuers appointed were - (1)

M/s. Crest Capital Group Pvt. Ltd.; and (2) M/s. Tech Mach

International Pvt. Ltd. On 22.10.2019, Valuation Report by

one Mr. Prateek Mittal with respect to securities and financial

assets was submitted and on 07.11.2019 another Report by

Mr. Ganesh Chandra Mamgai with respect to land and

building was submitted.

(iii) The CoC did not appoint Prabhjit Singh Soni as RP, the NCLT

appointed one Mr. Rishi Kapoor, to conduct meetings of CoC

to appoint a RP. In the CoC meeting conducted on

21.11.2019, one Mr. Chandra Prakash was approved as RP of

the CD, who was appointed on 27.11.2019.

(iv) In the CIRP, Resolution Plans were received and in the 19th

Meeting of the CoC held on 15.07.2020, it was decided to put

all the Resolution Plans for voting from 19.07.2020 to

22.07.2020. In pursuance of the resolution taken in 19th

Meeting of the CoC held on 15.07.2020 and as per voting

result conducted from 19.07.2020 to 22.07.2020, the

Resolution Plan submitted by one M/s SMV Agencies Pvt.

Ltd. was approved with majority of 85% vote share, which

was 100% vote share of Financial Creditors in a class. After

approval of the Resolution Plan, the then RP filed an

Company Appeal (AT) (Ins.) No.1477 of 2024 3 Application being IA No.3255/2020 on 14.08.2020 praying

for approval of Resolution Plan.

(v) Noida, who was included in the CoC, filed objections to the

Resolution Plan. An IA No.2298 of 2021 was filed by Noida.

Fresh objections were raised by Noida by filing IA No.3067 of

2022, to which affidavit in reply was also filed by the

erstwhile RP in the applications filed by the Noida.

(vi) On 11.10.2022, the then RP Shri Chandra Prakash was

suspended by an order passed by IBBI. In 23rd Meeting of the

CoC, held on 05.11.2022, the CoC resolved to appoint the

Appellant as RP, which was approved by the Adjudicating

Authority on 22.11.2022. On the date when Appellant was

appointed as RP, i.e. 21.11.2022, the application filed by

erstwhile RP for approval of Resolution Plan was already

pending and sub-judice before the Adjudicating Authority.

(vii) The Adjudicating Authority after hearing the Noida, passed an

order on 29.08.2023, noting two objections raised by the

learned Counsel for the Noida. The Appellant filed two

additional affidavits dated 16.10.2023 in IA No.3255 of 2020

bringing certain materials facts on record regarding

valuation. The Appellant also sent emails to the two Valuers,

who were appointed by the earlier IRP.

(viii) Again on 31.10.2023, the Adjudicating Authority noticed the

submission of the parties and made observations. The

Company Appeal (AT) (Ins.) No.1477 of 2024 4 parties were permitted to file written submissions, which were

filed.

(ix) On 17.01.2024, learned Counsel for the RP sought time from

the Tribunal to obtain instructions to clarify the issue of

valuation. The Appellant filed IA No.506 of 2024 praying for

various reliefs including seeking leave of the Tribunal to

appoint registered Valuers to submit Valuation Report for

Financial Assets & Securities and fresh Valuation Reports in

accordance with Regulation 35 of the CIRP Regulations.

(x) An IA was filed by Respondent No.6 - Shri Ashmeet Singh

Bhatia praying for replacement of the Appellant as RP.

(xi) The Adjudicating Authority heard different Applications,

which were filed, including IA No.1159 of 2024 filed by

Ashmeet Singh Bhatia (Respondent No.6). The Adjudicating

Authority by the impugned order dated 24.07.2024 exercising

its jurisdiction under Rule 11 of NCLT Rules, 2016 directed

for replacement of the Appellant as RP and replaced the

Appellant with another RP. The Appellant was directed to be

replaced with the IPE. Application filed by Respondent No.6 -

Ashmeet Singh Bhatia praying for replacement of the

Appellant was dismissed as having become infructuous. In

paragraphs 63 and 64 of the order, the Adjudicating

Authority noted the reasons for directing replacement of the

Appellant. It was specifically observed in paragraph 67 of the

Company Appeal (AT) (Ins.) No.1477 of 2024 5 order that RP is not replaced on the plea of Respondent No.6,

Homebuyer (Ashmeet Singh Bhatia), but is replaced because

he remained oblivious about his duties as RP on vital aspects

as mentioned in paragraphs 63 and 64. The Appellant

aggrieved by the order dated 24.07.2024, has filed this

Appeal.

3. As noted above, although in the Appeal, the Appellant has prayed

for various relief, however, during submissions, learned Counsel for the

Appellant has confined his Appeal to prayer (a) only, i.e. for expunging the

observations made in paragraphs 63, 64 and 67 in order against the

Appellant.

4. Learned Counsel for the Appellant challenging the impugned order

submits that observations of the Adjudicating Authority in paragraphs 63

and 64 and the observation that the Appellant remained oblivious about

his duties as RP, are not based on relevant materials. The Appellant has

discharged his duties according to the IBC and CIRP Regulations and has

made all efforts, which were in the domain and power of the Appellant. It

is submitted that the Appellant was appointed as RP after 27 months of

approval of the Resolution Plan by the CoC. It is submitted that earlier

RP has appointed two Valuers, who were approved by the CoC, however,

they being not registered Valuers, did not sign the Valuation Report and

the Reports, which were on record were signed by Mr. Prateek Mittal and

Mr. Ganesh Chandra Mamgai in the records of the CD. The Appellant has

filed the additional affidavit bringing on record all facts and

Company Appeal (AT) (Ins.) No.1477 of 2024 6 circumstances regarding valuation. The observation of the Adjudicating

Authority that the Appellant, who was appointed on 21.11.2022 is filing

an Application only in the year 2024 for fresh valuation, as he was

oblivious about his duties are unsustainable. When the Application for

approval of the Plan before the Adjudicating Authority was being heard

and Adjudicating Authority has issued various directions asking the

learned Counsel for the RP to explain and clarify, there was no occasion

for the Appellant to obtain a fresh Valuation without the leave of the

Court and the Appellant as advised has filed an Application seeking

various reliefs, including the leave to appoint Valuer. The Appellant in his

Application has also prayed that Resolution Plan be remitted back to the

CoC for reconsideration. It is submitted that allegations with regard to

settlement brought on record in IA No.3926 of 2023 by Ashmeet Singh

Bhatia with regard to Shomit Finance Pvt. Ltd., which was approved by

the CoC, no exception has been taken to the SRA being a confirming party

to the Settlement Agreement. The assets with regard to which settlement

was entered, being part of the Information Memorandum and Resolution

Plan having already been submitted and approved by the CoC, the SRA

was made confirming party to the settlement, which was also approved by

the CoC. The CoC, under whose guidance the entire CIRP runs, having

approved the settlement, bringing the settlement on record by the RP,

there cannot be any reason to observe that Appellant was oblivious about

his duties, as the RP. The observation that it is not clear as to what

manner the amount received from Shomit Finance Ltd. would be

distributed to the stakeholders, i.e creditors, the distribution of the

Company Appeal (AT) (Ins.) No.1477 of 2024 7 amount is under the domain of the CoC. Learned Counsel for the

Appellant has referred to relevant paragraphs of the Appeal, where

necessary pleadings with regard to observations made against the

Appellant has been made, the Appellant also referred to the additional

affidavit filed before the Adjudicating Authority, explaining all details

pertaining to the Valuation. With regard to appointment of Gold Star

Realtors Pvt. Ltd. ("Gold Star") as Contractor, it is submitted by the

Appellant that Gold Star was appointed by the CD, who was working prior

to initiation of CIRP and CoC in its Meeting has deliberated on the work

done by the Gold Star and decided to accept the revised quotes of Gold

Star to allow them to complete the Tower in the 13th CoC Meeting, which

was held under the aegis of Mr. Chandra Prakash, earlier RP. The

Appellant being RP of the CD was duty bound to run the CD as going

concern, which required carrying out the necessary construction

activities. Gold Star, who had one common Director with SRA, who was

working before the appointment of the Appellant as RP, was permitted to

compete the work of Tower 17, 18 and 19 and was appointed as

Contractor. The work of Gold Star was appraised to the CoC during the

26th CoC Meeting. Learned Counsel for the Appellant reiterated that the

Appellant is only challenging the order to the limited extent, assailing the

remarks made in paragraphs 63, 64 and 67. Learned Counsel for the

Appellant submits that the Appellant is not seeking his reinstatement as

RP.

Company Appeal (AT) (Ins.) No.1477 of 2024 8

5. Learned Counsel for the present RP submits that as regards the

prayers sought in the Appeal, qua expunging observations made in

paragraphs 63, 64 and 67, the same lies within the discretion of the

Tribunal.

6. The submissions advanced by learned Counsel for the Appellant

have been opposed by learned Counsel appearing for Respondent No.6 -

Ashmeet Singh Bhatia. It is submitted by Respondent No.6 that

Adjudicating Authority was fully entitled to replace the RP owing to

various misconduct and illegalities committed by the RP as has been

noticed in the impugned order. It is submitted that Gold Star, who is a

related party to the SRA has been appointed as the construction

Contractor for completion of the balance work of the CD, which had one

common Director. The appointment of contractor has been made without

the consent of the Homebuyers, merely on the basis of previous

engagement of the CoC, in respect of different Towers, however, Gold Star

could not have been appointed. The RP has made concealment of the

facts qua Shomit Finance Ltd. The RP connived with the Promoters of

Shomit Finance Ltd. and SRA and caused wrongful financial gains to

them by intentionally causing dishonest and wrongful losses to the CD.

The avoidance application was filed by the earlier RP against the

transaction with Shomit Finance Ltd., which was withdrawn by the

Appellant on the basis of settlements. The Appellant failed to take action

against several illegalities and has also been suspended by the IBBI with

regard to his activity with respect to another CD, vide order dated

Company Appeal (AT) (Ins.) No.1477 of 2024 9 02.08.2024. It is submitted by learned Counsel for Respondent No.6 that

detailed written submissions have already been made by Respondent No.6

in Company Appeal (AT) (Ins.) No.1474 of 2024 - Shomit Finance Ltd. vs.

Devendra Singh, Resolution Professional for Granite Gate Properties Pvt.

Ltd.

7. We have considered the submissions of learned Counsel for the par-

ties and have perused the records.

8. As noted above, the present Appeal is confined to adverse

observations made against the Appellant in paragraphs 64, 64 and 67. In

paragraph 63, the Adjudicating Authority observed that application filed

by Ashmeet Singh Bhatia (Respondent No.6) being IA No.1159 of 2024 for

replacement of RP, cannot be entertained as the single Homebuyer has no

locus to seek replacement. The Adjudicating Authority, however, made

certain observations with regard to said settlement in paragraph 63,

which are as follows:

"....Thus, apparently, a single homebuyer has no locus standi to seek replacement of an RP. However, we cannot be oblivious of the fact that the RP could not appreciate that the settlement reproduced in IA-3926/2023 provided that the terms of settlement would be binding on being approved by the CoC and the Successful Resolution Applicant. It is not understood that how the RP could not appreciate the scheme of IBC and the Regulations issued thereunder. In terms of the provisions of Section 28 of IBC, 2016, the RP could take certain actions with the approval of CoC, but such actions should have been final independent of the involvement of SRA. Anything what needed involvement of SRA should have been part of the Resolution Plan, which needed to be approved by this Tribunal. Besides, anything which comes as part

Company Appeal (AT) (Ins.) No.1477 of 2024 10 of bid in the form of Resolution Plan, need to be distributed in the order of priority mentioned in Section 53 of IBC, 2016. When as per the Settlement Deed, M/s Shomit Finance Limited agree to pay certain amount to the Corporate Debtor, it is not clear that in what manner the amount is to be distributed amongst the stakeholders viz. Creditors. The way the Settlement Deed is entered into, we are left with the impression that a lot is needed from RP qua the present proceedings. It is also quite surprising that how the RP could not take note of the fact that M/s Gold Star Realtors Private Limited, a related party of the SRA, could already be involved as contractor for completion of balance work of the projects qua the Corporate Debtor. Notably, both the SRA and M/s Gold Star Realtor Private Limited have Mr. Rajkumar Ramrakhiyani as their common director. The current RP who had taken over the responsibility on 21.11.2022 could prefer application for fresh valuation only in the year 2024. He could also remain indifferent regarding the inventories and assets of the Corporate Debor like his predecessors."

9. The second observation in paragraph 63 is that RP, who had taken

over the responsibility on 21.11.2022, could prefer application for fresh

valuation only in the year 2024.

10. Insofar as, the settlement with Shomit Finance Ltd., it is pleaded

that after Appellant was appointed as RP, Shomit Finance Ltd. has sent

an email to the RP indicating its willingness to resolve the dispute

between the CD and itself. After several meetings and discussions, the

proposed terms of settlement were incorporated by way of Agreement

dated 30.05.2023, which was placed before the CoC. The CoC in its 25th

Meeting held on 06.06.2023 resolved to accept the settlement with 96%

votes share. Noida has raised objections regarding the Valuation and

Company Appeal (AT) (Ins.) No.1477 of 2024 11 Agreement to Sale to Shomit Finance Ltd., which took place in 2016,

much before initiation of CIRP, was only for Rs.32 crores. In the

settlement, Shomit Finance Ltd. came forward to pay Rs.50 crores in

place of earlier Rs.32 crores and the CoC in its 25th Meeting approved the

terms of settlement dated 30.05.2023. In the 25th CoC Meeting held on

06.06.2023, under Agenda Item No.B-1, following was minuted:

"The Chairman further expressed that the instant settlement, the Corporate Debtor will be able to realise a value of Rs. 50,00,00,000.00 (Rupees Fifty Crores Only) for the commercial shops in iRing Project, and also get back undisputed title over constructed School having super area of 25,000 sq.ft., the average market value of which was accessed to be Rs. 6,832.00 per sq.ft. by the forensic auditor, M/s S.P. Chopra & Co., thereby making the estimated total market value of the school to be Rs. 17,08,00,000 (Rupees Seventeen Crore Eight Lakh). The amount being realized from M/s Shomit Finance from this settlement shall be used to meet the deficit of the Towers undergoing construction and for additional utilities such as STP, Electrical Connection, etc. and the distribution of the amount shall be decided post discussion and consensus amongst the Monitoring and the Construction Committee.

Upon deliberation and discussion, the following resolution was placed before the CoC for their consideration and approval through e-voting:

Resolution:

To consider and if thought fit, to pass with or without modification the following Resolution:

"RESOLVED THAT the terms of Settlement as per the Term Sheet dated 30.05.2023 executed between M/s Shomit Finance and the Resolution Professional, is hereby approved, and the RP is hereby

Company Appeal (AT) (Ins.) No.1477 of 2024 12 authorized to do all acts, deeds, and things as may be required to have the terms of settlement recorded before the Hon'ble NCLT."

11. The CoC, thus, has clearly noted that the amount of Rs.50 crores

received for commercial shops in iRing Project, shall be used to meet the

deficit of the Towers undergoing construction and for additional utilities

such as STP, Electrical Connection, etc. Further, the resolution, which

was approved, clearly provided that RP is authorized to do all acts, deeds,

and things as may be required to have the terms of settlement recorded

before the Hon'ble NCLT. Thus, filing of the Application before the

Adjudicating Authority, bringing settlement on record was with the

approval of the CoC, in view of its 25th Meeting and the resolution passed

therein. We are of the view that action of RP in bringing the settlement on

record, cannot be faulted. Further, the CoC has already resolved, as to

how the amount is to be distributed, if received by the CD, no fault can be

found with the RP. We make it clear that in the present Appeal, we are

not examining the settlement, which was entered with Shomit Finance

Ltd., because that is the subject matter of Company Appeal (AT) (Ins.)

No.1474 of 2024 and in the present Appeal, we only need to consider the

nature of observation and the material available on the record to

substantiate the observation made against the Appellant.

12. The Adjudicating Authority has also taken exception to the

involvement of the SRA in the Settlement Agreement dated 30.05.2023. It

has been observed that 'anything what needed involvement of SRS should

have been part of the Resolution Plan, which needed to be approved by this

Company Appeal (AT) (Ins.) No.1477 of 2024 13 Tribunal'. The settlement with regard to asset, which was part of the IA

and for which Resolution Plan has already been submitted by the SRA, no

exception can be taken to the action of the CoC and the RP, in SRA being

made confirming party to the Settlement Agreement.

13. The second observation made in paragraph 63 is that although the

Appellant was appointed as RP on 21.11.2022, but he filed the

Application only in 2024 regarding obtaining Valuation. As noted above,

the earlier RP has already filed an Application for approval of the

Resolution Plan on 14.08.2020, after approval of the Resolution Plan by

the CoC, the Appellant has come into picture only on 21.11.2022, when

the Application as well as objections of Noida were being heard and

decided. The Appellant in paragraph 7.1.13 has extracted the order dated

29.08.2023 passed by the Adjudicating Authority. Paragraph 7.1.13 of

the Appeal is as follows:

"7.1.13 That the Hon'ble NCLT, Principal Bench, vide the Order dated 29.08.2023 issued by the Hon'ble NCLT, Principal Bench, was pleased to record two alleged breaches of law, including one fresh objection raised by NOIDA for the first time, and directed that it wishes to hear the Ld. arguing Counsel on behalf of the Appellant with respect to the implication thereof, as under:

"During the course of hearing, two breaches of law have been mainly raised by Adv. Rachit Mittal for NOIDA which are disclosure of liquidation value in the Information Memorandum and also the value which has been determined by the /RP in the CIRP Proceedings was only from one valuer whereas the regulation provided for two valuation reports. On the above two breaches of law and the effect of the same on the ongoing proceedings before this Adjudicating Authority,

Company Appeal (AT) (Ins.) No.1477 of 2024 14 we would like to hear Mr. Sumant Batra, Ld. Counsel for the RP as to the implications of these breaches of the laid down law and the impact thereof on the CIRP Proceedings. We would like the Ld. Counsels for the parties to address this Tribunal on 25.09.2023. Accordingly, list the matter on 25.09.2023."

Copy of the Order dated 29.08.2023 passed by the Hon'ble NCLT, Principal Bench is annexed herewith as Annexure - A19."

14. It is submitted by the Appellant that Appellant has filed two

additional affidavits dated 16.10.2023, where steps taken by the

Appellant regarding valuation have been noticed. It is useful to refer to

pleading in paragraph 7.1.14 of the Appeal, which is as follows:

"7.1.14 In pursuance to the above, the Appellant filed two Additional Affidavits dated 16.10.2023 in IA 3255/2020, placing on record the true and correct facts as known to the Appellant till that date. Summary of the same is provided below:

(i) The Appellant had found two signed valuation reports on record, one dated 07.11.2019 by Mr. Ganesh Chandra Mamgai with respect to land and building, and another dated 22.10.2019 by Mr. Prateek Mittal with respect to securities and financial assets.

(ii) The Appellant also found two unsigned valuation reports on record, one by M/s Crest Capital Advisors with respect to both securities and financial assets as well as land and building, and another by Er. Ajay Chaturvedi (apparently on behalf of M/s Tech Mach) with respect to land and building.

(iii) Mr. Ganesh Chandra Mamgai and Mr. Prateek Mittal were Registered Valuers, duly registered with the IBBI. Whereas, M/s Crest Capital Advisors and M/s Tech Mach were not registered as valuers with the IBBI on the date of their appointment.

Company Appeal (AT) (Ins.) No.1477 of 2024 15 (iv) The Appellant sent emails dated 06.09.2023 and 07.09.2023 to M/s Crest Capital requesting for valuation report prepared by them. However, no response was received by the Appellant.

(v) The Appellant sent emails dated 06.09.2023 and 16.09.2023 to M/s Tech Mac International Private Limited. Tech Mac, in its reply forwarded its e-mail dated 06.04.2019 sent to the IRP requesting certain documents from the IRP which were required by it for completion of the report and were never provided to it. The Appellant provided the requisite documents to M/s Tech Mac vide e-mail dated 19.09.2023.

(vi) The Appellant also contacted Er. Ajay Chaturvedi, whose unsigned report was found on record (on behalf of M/s Tech Mac). Er. Ajay Chaturvedi informed that he can provide the signed report subject to the requisite documents and information being provided. The Appellant provided the requisite information to Er. Ajay Chaturvedi vide e-mail dated 22.09.2023, pursuant to which a final signed Valuation Report dated 03.10.2023 for land and building was provided by Er. Ajay Chaurvedi.

(vii) The Appellant filed all the above reports before the Hon'ble NCLT, Principal Bench, for its consideration.

Copies of the Additional Affidavits dated 16.10.2023 in IA 3255/2020 filed on behalf of the Appellant before the Hon'ble Adjudicating Authority are annexed herewith as Annexure - A20 and Annexure - A21 respectively."

15. The Adjudicating Authority further passed an order on 31.10.2023,

which has been extracted in paragraph 7.1.15 and further on 17.01.2024,

where it is noted in the order of Adjudicating Authority that Ld. Counsel

for the RP seeks time to seek instruction to clarify the issue of valuation.

Paragraph 7.1.16 is as follows:

Company Appeal (AT) (Ins.) No.1477 of 2024 16

"7.1.16 In view of the above, Written Submissions dated 25.11.2023 were filed on behalf of the Ld. arguing Counsel for the Appellant. Further arguments were also advanced by the Ld. Counsel appearing on behalf of all the parties, including the Respondent No. 3 and 5 before the Hon'ble NCLT Principal Bench on 17.01.2024 whereby the Hon'ble NCLT, Principal Bench was pleased to record as under:

"In course of the arguments, it was suggested by the Ld. Counsel for the RP who seeks time to seek instruction to clarify the issue of valuation and to that end he wanted accommodation so that on instructions, he can pursue the remedy available as per law."

Copy of the Order dated 17.01.2024 passed by the Hon'ble NCLT, Principal Bench is annexed herewith as Annexure - A23."

16. The Appellant thereafter filed an IA No.506 of 2024. The prayers

made in IA No.506 of 2024 have been extracted in paragraph 7.1.17,

which are as follows:

"(a) take on record the final signed valuation report dated 03.10.2023 by Er. Ajay Chaturvedi, obtained by the Applicant subject to approval of this Hon'ble Tribunal;

(b) permit the Applicant to appoint a registered valuer to submit valuation report for Financial Assets & Securities;

(c) Alternately, permit the Applicant to commission fresh valuation reports of assets of Corporate Debtor in accordance with Regulation 35 of CIRP Regulations;

(d) Direct the existing or fresh valuation reports, as the case may be, in light of prayers (a) to (c) above, to be placed before the CoC, if deemed fit by this Hon'ble Tribunal;

(e) Pass any such further orders/directions as may be deemed necessary in the facts and circumstances of the case."

Company Appeal (AT) (Ins.) No.1477 of 2024 17

17. When Application for Plan approval as well as objections raised by

the Noida regarding valuation were already being addressed and

considered by the Adjudicating Authority, the RP on its own without any

direction of the Adjudicating Authority or the CoC, could not have

proceeded for obtaining fresh valuation. We, thus, are of the view that

observation made in paragraph 63 that Appellant although appointed on

21.11.2022, could prefer application for fresh valuation only in the year

2024, could not be held to be reflecting any dereliction of duty on the part

of the RP. When Resolution Plan Application is pending consideration

before the Adjudicating Authority, without leave of the Court and the

valuation, which were on the record, were already part of the Application

of RP along with Form-H which was filed, it was not open for the RP to

take steps for appointment of any Valuer for valuing the assets of the CD,

which course is not permitted as per the CIRP Regulations and any steps

by the RP, could have only be taken after order of the Adjudicating

Authority. Hence, the above observation also cannot be sustained.

18. In paragraph 64, the Adjudicating Authority further observed that

RP was not expected to take two years to convince himself that a fresh

exercise in terms of the provisions of Regulation 27 read with Regulation

36 of IBC, 2016 was required to be done. As noted above, when

Application for Plan approval was pending consideration, including the

objections by the Noida and Adjudicating Authority has considered

submissions and issued various directions, without there being any leave

by the Court, as per the CIRP Regulations, the RP had no authority or

Company Appeal (AT) (Ins.) No.1477 of 2024 18 jurisdiction to direct for fresh valuation. Hence, observation made in

paragraph 64 that RP was not expected to take two years to convince

himself that a fresh exercise in terms of the provisions of Regulation 27

read with Regulation 35 of IBC, 2016 was required to be done, are

unsustainable.

19. The observations made in paragraph 67 are for direction to replace

the Appellant because he remained oblivious about his duties as RP on

vital aspects mentioned in paragraphs 63 and 64. In paragraph 63,

another adverse observation made is that RP could not take note of the

fact that M/s Gold Star Realtors Pvt. Ltd., a related party of the SRA,

could be involved as contractor for completion of balance work of the

projects qua the CD and both the SRA and M/s Gold Star Realtor Pvt.

Ltd. have Mr. Rajkumar Ramrakhiyani as their common Director. With

regard to appointment of Gold Star, the RP has pleaded that Gold Star

was engaged as Contractor by the CD, even prior to initiation of CIRP and

the CoC in different Meetings has already noted and approved the work of

Gold Star. The Appellant has referred to 13th Meeting of the CoC held on

26.12.2019, during the period of earlier RP, where Gold Star was one of

the three major contractors of the CD and was working with the CD since

01.09.2017 and the IRP has also continued with M/s Gold Star Realtors

Ltd. The Appellant has referred to subsequent Meetings of the CoC on

10.01.2020, where a decision was taken by the CoC to continue the Gold

Star with construction work on Project site. The relevant parts of the 14th

CoC Meeting dated 10.01.2020, are as follows:

Company Appeal (AT) (Ins.) No.1477 of 2024 19

"CIRP PROGRESS UPDATE:

4. To discuss mechanism to continue construction at the project sites and to take note of the proposals submitted by the contractors namely, M/s GoldStar Realtors Limited, M/s RCB Infra Cons Pvt. Ltd. and M/s Groundwork Concept Pvt.

Ltd. for the purpose of undertaking construction.

The RP informed the members of the CoC, that the RP had requested all the current contractors to submit their fresh proposals for the construction to be undertaken at the site. The RP further informed the members that the RP had apprised the contractors that the corporate debtor has paucity of funds and therefore sought that discounted rates lower from the ones agreed with the erstwhile management of corporate debtor (3C) be given for completion of the work. The RP updated the members of the CoC, that M/s GoldStar Realtors and M/s RCB Infra Cons Pvt. Ltd. have both agreed to reduce their rates from the ones negotiated with 3C and which were being continued by the IRP, Mr. Soni. The quotes as shared by the aforesaid contractors as detailed in the agenda notice were deliberated upon. The RP further informed the members of CoC that since, M/s Groundwork Concept Pvt. Ltd. has not offered any discount on its previous quotes, one last offer is being made to M/s Groundwork Concept Pvt. Ltd. to reduce it rates and bring it at par with other aforesaid contractors in order to undertake the construction work. In the event any revised offer is received from M/s Groundwork Concept Pvt. Ltd., the same shall be put to vote by before the CoC. In any circumstances, the said agenda would again be put to vote before he CoC.

xxx xxx xxx

7. Other matters discussed / Proposed for Resolution

xxx

c) The RP further informed that in the Notice & Agenda for 14th CoC as shared in the Agenda for Voting No. 1 "

RESOLVED THAT the revised quote submitted for undertaking construction by M/s GoldStar Realtors Pvt. Ltd. is approved and M/s Goldstar Realtors Pvt. Ltd is appointed to carry on pending construction in Tower 29, 28 and 14 of Lotus Panache" ; Tower No. 27 had inadvertently not been incorporated. However, the voting has been done on the Agenda including Tower no. 27 and the Agenda stands amended and shall read as:

"RESOLVED THAT the revised quote submitted for undertaking construction by M/s GoldStar Realtors Pvt. Ltd.

Company Appeal (AT) (Ins.) No.1477 of 2024 20 is approved and M/s Goldstar Realtors Pvt. Ltd is appointed to carry on pending construction in Tower 29, 27, 28 and 14 of Lotus Panache"

d) The voting on agenda item by the Homebuyers was open till 1500 hours today and the Noida Authority will caste their vote till 1900 hours.

Agenda items for voting

1. ""RESOLVED THAT the revised quote submitted for undertaking construction by M/s GoldStar Realtors Pvt. Ltd. is approved and M/s Goldstar Realtors Pvt. Ltd is appointed to carry on pending construction in Tower 29, 27, 28 and 14 of Lotus Panache"."

Voting of home buyers : Approved with 85% in favour

Voting of Noida Authority : Abstain"

20. The Appellant's submission is that the Gold Star has already been

carrying out construction work much prior to the appointment of the

Appellant as RP and was allowed to complete the construction work in

Tower 17, 18 and 19 of the Project. From the materials on record as well

as Minutes of the CoC as referred above, it is clear that no exception can

be taken by the Adjudicating Authority in permitting the work to be

carried on by Gold Star.

21. The submission of learned Counsel for Respondent No.6 that the

Adjudicating Authority has ample jurisdiction to replace the RP is

supported by the judgment of this Tribunal in Stressed Assets

Stabilization Fund (SASF) v. Piyush Periwal & Ors. - Company

Appeal (AT) (Ins.) No.947 of 2021. The submission of Respondent No.6

is that RP does not have locus to file an Appeal, suffice it to say that

Company Appeal (AT) (Ins.) No.1477 of 2024 21 present Appeal has been confined to the adverse observations made

against the RP, which ultimately led to replacement of the RP. Thus, the

RP is an aggrieved person, insofar as, the above parts of the order is

concerned and has every right to file the Appeal. The reliance on

judgment of this Tribunal in Ranjeet Kumar Verma (Erstwhile IRP) vs.

Committee of Creditors of Straight Edge Contract Pvt. Ltd. (Through

Resolution Professional), Company Appeal (AT) (Ins.) No.1129 of

2020 and the judgment of Hon'ble Supreme Court in Regen Powertech

Ltd. vs. Giriraj Enterprises & Anr. - Civil Appeal Nos.5985-6001 of

2023, do not support the submission of Respondent No.6 that in the facts

of the present case, the Appellant has no locus to file the Appeal.

22. With regard to other allegations made by Respondent No.6

supporting the observations made by the Adjudicating Authority in

paragraphs 63, 64 and 67, we have already noticed the relevant pleadings

and materials on the record and have come to the conclusion that the

adverse observations made by the Adjudicating Authority in the above

paragraphs are not sustainable.

23. In view of the foregoing discussions and conclusions, we are of the

view that adverse observations made in paragraphs 63, 64 and 67 of the

impugned order dated 24.07.2024, need to be expunged and the

observations made in the above paragraphs, not be treated to adverse to

the Appellant. We make it clear that this order shall have no effect and

consequence on the new RP, who has been appointed in place of the

Company Appeal (AT) (Ins.) No.1477 of 2024 22 Appellant. The Appeal is disposed of accordingly. Parties shall bear their

own costs.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical)

NEW DELHI

17th July, 2025

Ashwani

Company Appeal (AT) (Ins.) No.1477 of 2024 23