Dsk Anandghan (Allotment Letter ... vs Mr Manoj Kumar Agarwal

NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI Company Appeal (AT) (Insolvency) No. 63 of 2024 Arising out of Order dated 23.06.2023 passed by the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench-I in IA No.1950 of 2021 in CP (IB) No.1633/MB/C-I/2019)

IN THE MATTER OF: Deepak Sakharam Kulkarni & Anr. ....Appellants Vs Manoj Kumar Agarwal, Resolution Professional of D.S. Kulkarni Developers Ltd. & Ors. .... Respondents

Present: For Appellants: Mr. Krishnendu Dutta, Sr. Advocate with Akshay Gosavi, Mr. Kumar Anurag Singh, Mr. Kartik Sandal, Ms. Raveena Devan, Mr. Avaneesh Jaiswal and Mr. Zain A. Khan, Mr. Anish Ahlawat, Advocates. For Respondents: Mr. Abhijeet Sinha, Sr. Advocate with Mr. Varun Kalra, Mr. Samir Malik, Mr. Akash Chatterjee and Mr. Pranav Khanna, Advocates for R-1. Mr. Neeraj Kishan Kaul, Mr. Arvind Nayar, Sr. Advocate with Mr. Puneet Singh Bindra, Mr. Akshay Doctor, Mr. Parag Sawant, Mr. Akshay Sharma, Mr. Akshay Joshi, Mr. Rishabh Gupta, Ms. Mehreen Garg , Advocates for SRA.

With Company Appeal (AT) (Insolvency) No. 1142 of 2023 & I.A. No. 3986 of 2023 IN THE MATTER OF: Shirish Deepak Kulkarni ....Appellant Vs Manoj Kumar Agarwal, Resolution Professional of D.S. Kulkarni Developers Ltd. & Ors. .... Respondents

Present:

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 1 For Appellant: Mr. P. Nagesh, Sr. Advocate, Mr. Kumar Anurag Singh, Mr. Zain A. Khan, Mr. Akshay Sharma and Mr. Anish Ahlawat, Advocates. Mr. Krishnendu Datta, Sr. Advocate with Mr. Shikher Deep Aggarwal, Advocates for Impleader.

For Respondents: Mr. Abhijeet Sinha, Sr. Advocate, Mr. Shahan Ulla, Mr. Akash Chatterjee, Advocates for RP. Mr. Neeraj Kishan Kaul, Sr. Advocate with Mr. Puneet Singh Bindra, Mr. Akshay Doctor, Mr. Akshay Sharma, Mr. Rishabh Gupta and Mr. Sameer Sethi, Advocates for SRA. With Company Appeal (AT) (Insolvency) No. 1307 of 2023 & I.A. No. 4619, 4620 of 2023

IN THE MATTER OF: DS Kulkarni and Company ....Appellant Vs Manoj Kumar Agarwal, Resolution Professional of D.S. Kulkarni Developers Ltd. & Ors. .... Respondents

Present: For Appellant: Mr. Sandeep Bajaj, Mr. Naman Tandon, Ms. Adya Singh, Advocates For Respondents: Mr. Abhijeet Sinha, Sr. Advocate, Mr. Shahan Ulla, Mr. Akash Chatterjee, Advocates for RP. Mr. Arvind Nayar, Sr. Advocate with Mr. Puneet Singh Bindra, Mr. Parag Sawant, Mr. Akshay Sharma, Mr. Rishabh Gupta, Mr. Sameer Sethi, Advocates for SRA. With Company Appeal (AT) (Insolvency) No. 1308 of 2023 & I.A. No. 4625, 4627 of 2023

IN THE MATTER OF: DSK Global Education and Research Pvt. Ltd. ....Appellant Vs

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 2 Manoj Kumar Agarwal, Resolution Professional of D.S. Kulkarni Developers Ltd. & Ors. .... Respondents

Present: For Appellant: Mr. Sandeep Bajaj, Ms. Aakanksha Nehra, Mr. Naman Tandon, Ms. Gunjan Nayyar and Ms. Adya Singh, Advocates For Respondents: Mr. Abhijeet Sinha, Sr. Advocate, Mr. Varun Kalra, Mr. Samir Malik, Mr. Akash Chatterjee, Mr. Pranav Khanna, Advocates for RP. Mr. Neeraj Kishan Kaul, Mr. Arvind Nayar, Sr. Advocates with Mr. Puneet Singh Bindra, Mr. Akshay Doctor, Mr. Parag Sawant, Mr. Akshay Sharma, Mr. Rishabh Gupta, Ms. Ira Mahajan, Ms. Pritha Suri, Mr. Jonathan Jose, Advocates for SRA.

With Company Appeal (AT) (Insolvency) No. 1223 of 2023 & I.A. No. 4303 of 2023

IN THE MATTER OF: Sri Umiyaa Construction Pvt. Ltd. & Ors. ....Appellants

Vs

Manoj Kumar Agarwal, Resolution Professional of D.S. Kulkarni Developers Ltd. & Ors. .... Respondents

Present: For Appellants: Mr. Krishnendu Datta, Sr. Advocate with Mr. Shikher Deep Aggarwal, Mr. Ajay Sharma, Advocates

For Respondents: Mr. Abhijeet Sinha, Sr. Advocate with Mr. Varun Kalra, Mr. Samir Malik, Mr. Shahan Ulla, Mr. Akash Chatterjee, Mr. Pranav Khanna, Advocates for RP. Mr. Arvind Nayar, Sr. Advocate with Mr. Puneet Singh Bindra, Mr. Akshay Doctor, Mr. Parag Sawant, Mr. Akshay Sharma, Mr. Akshay

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 3 Joshi, Mr. Rishabh Gupta, Mr. Sameer Sethi, Ms. Mehreen Garg, Advocates for SRA.

WITH Company Appeal (AT) (Insolvency) No. 1226 of 2023 & I.A. No. 4320, 4317 of 2023

IN THE MATTER OF: Dhanaji Mohan Nikam & Ors. ....Appellants Vs Manoj Kumar Agarwal, Resolution Professional of D.S. Kulkarni Developers Ltd. & Ors. .... Respondents

Present: For Appellants: Mr. Krishnendu Datta, Sr. Advocate with Ms. Pallavi Singh, Mr. Shikher Deep Aggarwal, Advocates

For Respondents: Mr. Abhijeet Sinha, Sr. Advocate with Mr. Varun Kalra, Mr. Samir Malik, Mr. Shahan Ulla, Mr. Akash Chatterjee, Mr. Pranav Khanna, Advocates for RP. Mr. Arvind Nayar, Sr. Advocate with Mr. Puneet Singh Bindra, Mr. Akshay Doctor, Mr. Parag Sawant, Mr. Akshay Sharma, Mr. Akshay Joshi, Mr. Rishabh Gupta, Mr. Sameer Sethi, Ms. Mehreen Garg, Advocates for SRA.

WITH Company Appeal (AT) (Insolvency) No. 1660 of 2023 & I.A. No.5986, 5987, 5988 of 2023 (Arising out of Order dated 01.08.2023 passed by the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench-I in IA No.01.08.2023 in CP (IB) No.1633/MB/C-I/2019))

IN THE MATTER OF: Bharat Vitthal Jadhav & Ors ....Appellants Vs

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 4 Manoj Kumar Agarwal & Anr. .... Respondents

Present: For Appellants: Mr. Kushal Choudhary, Mr. Angad Ahluwalia and Mr. Jatin Verma, Advocates. For Respondents: Mr. Abhijeet Sinha, Sr. Advocate with Mr. Anand Singh Sanjor, Advocates for RP Mr. Arvind Nayar, Sr. Advocate with Mr. Puneet Singh Bindra, Mr. Akash Chatterjee, Mr. Rishabh Gupta, Mr. Sameer Sethi, Mr. Parag Sawant, Mr. Akshay D. and Mr. Akshay Sharma, Advocates for SRA

With Company Appeal (AT) (Insolvency) No. 1050 of 2023 (Arising out of Order dated 23.06.2023 passed by the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench-I in IA No.1950 of 2021 in CP (IB) No.1633/MB/C-I/2019)

IN THE MATTER OF: Piyuja Suresh Singhvi & Anr. ....Appellants Vs Manoj Kumar Agarwal & Ors. .... Respondents

Present: For Appellants: Mr. Chaitanya Nikte, Mr. Anuj Tiwari and Ms. Aroshi Pal, Advocates. For Respondents: Mr. Abhijeet Sinha, Sr. Advocate with Mr. Anand Singh Sengor, Advocate for RP Mr. Akash Chatterjee, Advocate Mr. Arvind Nayar, Sr. Advocate with Mr. Rishabh Gupta, Mr. Sameer Sethi, Mr. Parag Sawant, Mr. Akshay Doctor and Mr.Akshay Sharma, Advocates

With Company Appeal (AT) (Insolvency) No. 1051 of 2023 (Arising out of Order dated 23.06.2023 passed by the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench-I in IA No.1950 of 2021 in CP (IB) No.1633/MB/C-I/2019)

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 5 IN THE MATTER OF: Priyash Suresh Singhvi & Anr. .... Appellants

Vs

Manoj Kumar Agarwal & Ors. .... Respondents

Present: For Appellants: Mr. Chaitanya Nikte, Mr. Anuj Tiwari and Ms. Aroshi Pal, Advocates For Respondent: Mr. Abhijeet Sinha, Sr. Advocate with Mr. Anand Singh Sengor, Advocate

Mr. Akash Chatterjee, Advocate

Mr. Puneet Singh, Mr. Rishabh Gupta, Mr. Sameer Sethi and Mr. Akshay Sharma, Advocates

With Company Appeal (AT) (Insolvency) No. 1361 of 2023 & I.A. No. 4843 of 2023 (Arising out of Order dated 01.08.2023 passed by the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench-I in IA No.2157/2021 and in CP (IB) No.1633/MB/C-I/2019) IN THE MATTER OF: Jiten S. Gada & Ors. .... Appellants

Vs

Manoj Kumar Agarwal Resolution Professional of D.S. Kulkarni Developers Ltd. and Ors. .... Respondents

Present: For Appellants: Mr. Krishnendu Datta, Sr. Advocate along with Mr. Varun Garg, Mr. Harsh Pandya, Ms. Alina, Advocates For Respondents: Mr. Abhijeet Sinha, Sr. Advocate with Mr. Varun Kalra, Mr. Samir Malik, Mr. Akash Chatterjee, Mr. Pranav Khanna, Advocates for RP.

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 6 Mr. Arvind Nayar, Sr. Advocate with Mr. Puneet Singh Bindra, Mr. Akshay Doctor, Mr. Parag Sawant, Mr. Akshay Sharma, Mr. Akshay Joshi, Mr. Rishabh Gupta, Ms. Mehreen Garg, Advocates for SRA.

With Company Appeal (AT) (Insolvency) No. 1385 of 2023 (Arising out of Order dated 01.08.2023 passed by the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench-I in IA No.2157/2021 and in CP (IB) No.1633/MB/C-I/2019)

IN THE MATTER OF: Viraj Sham Jadhav .... Appellant

Vs

Bank of Maharashtra & Ors. .... Respondents

Present: For Appellant: Mr. Kunal Cheema, Mr. Apporv Shukla, Mr. Raghav Deshpande, Mr. Shubham Chandankhede, Mr. Puneet Chahar and Ms. Prableen A. Shukla, Advocates For Respondents: Mr. B.P. Singh, Advocate for R-1.

Mr. Abhijeet Sinha, Sr. Advocate with Mr. Varun Kalra, Mr. Samir Malik, Mr. Akash Chatterjee, Mr. Pranav Khanna, Advocates for R-2.

Mr. Arvind Nayar, Sr. Advocate with Mr. Puneet Singh Bindra, Mr. Akshay Doctor, Mr. Parag Sawant, Mr. Akshay Sharma, Mr. Akshay Joshi, Mr. Rishabh Gupta, Ms. Mehreen Garg, Advocates for SRA.

JUDGMENT

ASHOK BHUSHAN, J.

The Appeal(s) have been filed against the - (i) Order dated 23.06.2023

passed by National Company Law Tribunal, Mumbai Bench-I in IA No.1950

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 7 of 2021 filed by the Resolution Professional ("RP"), by which order

Resolution Plan submitted by Ashdan Properties Pvt. Ltd.; Classic

Promoters and Builders Pvt. Ltd. and Atul Builders India Pvt. Ltd. (in

Consortium) have been approved by the Adjudicating Authority in respect

of the Corporate Insolvency Resolution Process ("CIRP") of D.S. Kulkarni

Developers Ltd. (the Corporate Debtor); and (ii) Orders dated 01.08.2023,

rejecting the IA's filed by Homebuyers as infructuous consequent to order

dated 23.06.2023.

2. The above Appeal(s) have been filed by Promoters of the Corporate

Debtor; other Group Entities; Operational Creditors; Employees and

Homebuyers of the Corporate Debtor. For convenience, the Appeal(s) can

be divided in three groups namely - Group-I, Group-II and Group-III.

Group-I

(1) Company Appeal (AT) (Insolvency) No. 63 of 2024 - Deepak Sakharam Kulkarni & Anr. (Promoter);

(2) Company Appeal (AT) (Insolvency) No. 1142 of 2023 - Shirish Deepak Kulkarni (Promoter);

(3) Company Appeal (AT) (Insolvency) No. 1307 of 2023 - DS Kulkarni and Company (Related Entity);

(4) Company Appeal (AT) (Insolvency) No. 1308 of 2023 - DSK Global Education and Research Pvt. Ltd. (Related Entity)

Group-II - (Homebuyers) (1) Company Appeal (AT) (Insolvency) No. 1361 of 2023 - Jiten S. Gada & Ors.

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 8 (2) Company Appeal (AT) (Insolvency) No. 1385 of 2023 - Viraj Sham Jadhav (Homebuyers) (3) Company Appeal (AT) (Insolvency) No. 1050 of 2023 - Piyuja Suresh Singhvi & Anr.

(4) Company Appeal (AT) (Insolvency) No. 1051 of 2023 - Priyash Suresh Singhvi & Anr.

(5) Company Appeal (AT) (Insolvency) No. 1660 of 2023 - Bharat Vitthal Jadhav & Ors.

Group-III

(1) Company Appeal (AT) (Insolvency) No. 1223 of 2023 - Sri Umiyaa Construction Pvt. Ltd. & Ors. (Operational Creditor); (2) Company Appeal (AT) (Insolvency) No. 1226 of 2023 - Dhanaji Mohan Nikam & Ors. (Employees)

3. Before we notice facts and pleadings in above Appeal(s), it is

necessary to notice certain facts with regard to DSK Group, which consists

of the Corporate Debtor - D.S. Kulkarni Developers Ltd. and other Group

Entities, partnership firms, engaged in different business, primarily real

estate development. The CIRP proceedings culminated into the Resolution

Plan, which has been approved by the impugned order dated 23.06.2023.

There has been several proceedings including the proceedings under

Prevention of Money Laundering Act, 2002 (hereinafter referred to as the

"PLMA Act") against the Corporate Debtor and its Promoters, Related

Entities, which also need to be noticed.

4. The D.S. Kulkarni Developers Ltd. and Group Companies have been

in the business of residential and commercial construction since last

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 9 several decades. Deepak Sakharam Kulkarni, Appellant No.1 in one of the

Appeals is founder of the Group. Appellant No.2 - Smt. Hemanti Deepak

Kulkarni is wife of Deepak Sakharam Kulkarni. Shri Shirish Deepak

Kulkarni, Appellant in Another Appeal is son of Deepak Sakharam Kulkarni

and Smt. Hemanti Deepak Kulkarni. On 31.12.1984, Deepak Sakharam

Kulkarni, Hemanti Deepak Kulkarni and Shirish Deepak Kulkarni, as

Partners, constituted a Partnership Firm namely - D.S. Kulkarni &

Company. On 18.05.1987 Deepak Sakharam Kulkarni with Hemanti

Deepak Kulkarni and Shirish Deepak Kulkarni constituted another

Partnership Firm namely - D.S. Kulkarni & Associates. On 20.09.1991,

D.S. Kulkarni Developers Ltd. was incorporated as Public Limited Company

with Deepak Sakharam Kulkarni as its Chairman and Managing Director.

DSK Global Education and Research Pvt. Ltd. was constituted as

Registered Company, wherein Deepak Sakharam Kulkarni, Hemanti

Deepak Kulkarni and Shirish Deepak Kulkarni and other family Members

as Director. There were several other subsidiaries of D.S. Kulkarni

Developers Ltd.; other Partnership Firms; different other Private Companies

and Firms; Trusts of the DSK Group. D.S. Kulkarni & Co. and D.S.

Kulkarni & Associates, which were two Registered Partnership Firms, were

constituted in the year 1984 and 1987 for carrying out various

developments activities and direct and indirect loans from year 2006-07 till

2015-16. The above two Firms successfully completed various residential/

commercial Projects.

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 10

5. In Corporate Debtor - D.S. Kulkarni Developers Ltd. shareholding of

the D.S. Kulkarni Family is 49.98% with Deepak Sakharam Kulkarni

having 28.6% share holding as on 26.03.2016. DSK Group has also

accepted Fixed Deposits from the public for the purposes of working capital

and expansion. D.S. Kulkarni Developers Ltd. with the intent to develop a

SEZ Project entered into with a foreign Company namely - GTC Cyprus

Holding Ltd. in the year 2007-08 in Joint Venture. The Corporate Debtor

also received permission from Director of Industries, Maharashtra on

01.03.2007 to purchase land at village Fursungi, Dist. Pune, which was

subject to various conditions as per provisions of Mumbai Tenancy and

Agricultural Act, 1948. The Corporate Debtor also obtained approval for

constructing of SEZ Project from Government of India, Ministry of

Commerce and Industry on 26.07.2007 with various conditions. As per the

conditions, the Corporate Debtor has to comply the conditions within a

stipulated period to obtain final permission for setting up SEZ Project,

failing which, Corporate Debtor would have to return the land to same

agriculturist at the same price and further it was obligated to purchase

huge land within two years from the date of order and has to purchase land

from the agriculturist on market price with full willingness of the land

owner. On Corporate Debtor having failed to receive an SEZ approval/ final

notification, permission was to be automatically cancelled. Due to

stringent conditions for obtaining the final SEZ permission, Deepak

Sakharam Kulkarni and Hemanti Deepak Kulkarni to minimize the risk of

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 11 losses to Corporate Debtor, purchased the land through their Partnership

Firm and/or through their relatives. The Corporate Debtor started

purchasing land through D.S. Kulkarni & Co. and its relatives. The fund

for purchase of agricultural land to its relatives were given by Hemanti

Deepak Kulkarni, the President of the Group. Relatives of the Deepak

Sakharam Kulkarni purchased various land in their own names from the

funds given by Hemanti Deepak Kulkarni. The foreign Company due to its

financial constraints backed out from the Joint Venture, leading to

cancellation of SEZ Project. On cancellation of SEZ Project, the Promoter

decided to develop an Integrated Township Project spread over 236 acres of

land at Fursungi. The Promoter informed the D.S. Kulkarni & Co. and all

other Partnership Firms as well as relatives to refund the amount advanced

to them for carrying out development in the land purchased by them.

Consequently, the balance amount, which was advanced, was refunded.

The Collector of Pune had sanctioned the proposed outlay of land of 181

acres for special township by way of order dated 21.01.2013. The land,

which was referred to by the Collector, included land in the name of

Corporate Debtor, D.S. Kulkarni & Co. and certain other individual

Members.

6. In the year 2013, DSK Group of Companies with desire to expand

their business, formed six different registered Partnership Firms. DSK

Group of Companies were accepting the deposits on secured loan from

general public. The registered Firms of the DSK Group has also accepted

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 12 Fixed Deposits. D.S. Kulkarni & Associates and D.S. Kulkarni & Co. had

given advances to the Corporate Debtor in the year 2011-2013 for purchase

of property and carrying out development. Other entities of DKS Group also

gave various advances to the Corporate Debtor. In April 2017, the

Corporate Debtor had made allotment to its various homebuyers in several

projects including DSK Vishwa Phase VI, Anandghan, which Project was

situated at Dhayari Pune. Certain other Projects of the Corporate Debtor

namely - DSK Madhukosh, situated at Andheri Mumbai where, possession

were also handed over to the homebuyers. On 28.10.2017, an FIR was

lodged against Deepak Sakharam Kulkarni and Hemanti Deepak Kulkarni

before EOW, Pune. Several FIRs were registered in Police Station at Pune,

as well as in Mumbai being FIR No.347/2017 at Shivaji Nagar Police

Station; FIR No.373/2017 at Rajarampuri Police Station Kolhapur; FIR

No.309/2017 at Shivaji Park Police Station, Mumbai against Deepak

Sakharam Kulkarni, Hemanti Deepak Kulkarni, Shirish Deepak Kulkarni

and DSK Group of Companies and others. Based on above, a case was

registered under MPED Act, 1999. A Provisional Attachment Order dated

14.02.2019 was passed by Deputy Director, Enforcement Directorate

Mumbai Zonal Office with respect to immovable properties and movable

properties against the Corporate Debtor, Promoters and other Group

Companies and the same were attached. A complaint came to be filed

before the Adjudicating Authority under the PMLA against Deepak

Sakharam Kulkarni, Hemanti Deepak Kulkarni and Shirish Deepak

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 13 Kulkarani also against D.S. Kulkarni & Co., D.S. Kulkarni & Associates

and other DSK Group partnership Firms and entities. Notices were issued

in the proceedings. Statements of Deepak Sakharam Kulkarni, Hemanti

Deepak Kulkarni were also recorded. In proceedings under PMLA, by an

order dated 05.08.2019, the Provisional Attachment Order was confirmed

by the Adjudicating Authority.

7. Bank of Maharashtra filed an Application under Section 7 against

the Corporate Debtor and by order dated 26.09.2019, CIRP against the

Corporate Debtor commenced. It is to be noted that prior to initiation of

CIRP against the Corporate Debtor, Deepak Sakharam Kulkarni and

Hemanti Deepak Kulkarni were arrested in the PMLA case on 07.02.2018.

Hemanti Deepak Kulkarni was released on 18.11.2022, whereas Deepak

Sakharam Kulkarni was released on 09.03.2023.

8. After commencement of CIRP vide order dated 26.09.2019, Manoj

Kumar Agarwal was appointed as IRP, who was subsequently confirmed as

RP. RP issued publication in the newspaper as well as on the website,

inviting claims from the homebuyers, some of the homebuyers, who are

Appellants before us and have filed their claims in response to the

publication issued by the IRP. In response to the notice issued, several

homebuyers filed their claim as allotment letter issued by the Corporate

Debtor in the year 2017 itself. The RP sent various communications to

certain homebuyers including some of the Appellants herein, asking details

of payments to the Corporate Debtor. Ultimately the RP issues list of

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 14 creditors dated 09.08.2021. Claim of the homebuyers, who could not file

any documents to support their payment to the Corporate Debtor were

rejected. The claims of the homebuyers who are Appellants before us, also

was not included in the list of creditors, as admitted claims.

9. In the CIRP, Resolution Plans were submitted, including Resolution

Plan by Ashdan Properties Pvt. Ltd.; Classic Promoters and Builders Pvt.

Ltd. and Atul Builders India Pvt. Ltd. (in Consortium), which Resolution

Plans were approved by the Committee of Creditors ("CoC") on 13.08.2021.

On 24.08.2021, RP filed an Application before the Adjudicating Authority

for approval of the Resolution Plan. Certain homebuyers, including two of

the Appellants filed their claims in March 2023, which claim was rejected

and communication was issued by the RP, informing them that their claim

has been filed with delay, cannot be entertained. Some of the homebuyers

filed their Application, whose claim was rejected before the Adjudicating

Authority in the year 2023, which Applications remained pending for

consideration. The Adjudicating Authority heard the IA No.1950 of 2021

filed by the RP for approval of the Plan and approved the Resolution Plan

by order dated 23.06.2023. IAs filed by some of the homebuyers,

challenging the rejection of their claims, remained pending, on the date

when Resolution Plan was approved. The homebuyers, who are in Group

No.II, have filed these Appeal(s), challenging the order dated 23.06.2023

approving the Resolution Plan. Some of the Homebuyers have challenged

subsequent order dated 01.08.2023. We have already noticed above that

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 15 Promoters as well as their Group Entities, Operational Creditors and

employees have also filed the Appeal(s), as noted above, challenging the

approval of Resolution Plan dated 23.06.2023.

10. We have heard the above Appeals on different dates, but since the

Appeal(s) are filed against the orders dated 23.06.2023 and 01.08.2023, we

are deciding these Appeal(s) by this common judgment.

11. After having noticed the brief background facts, now we proceed to

notice facts and pleadings in each Appeal.

12. We now proceed to notice the individual facts and prayers made in

each of the above appeals. As noticed above Group I consists of four

appeals, we proceed to notice details in each appeals separately.

Comp. App. (AT) (Ins.) No. 63/2024

13. This appeal has been filed by Deepak Sakharam Kulkarni and Smt.

Hemanti Deepak Kulkarni challenging the order dated 23.06.2023 passed

in I.A. No.1950/2021, approving the Resolution Plan submitted by

Respondents No. 2 to 4.

14. Appellant's case in the appeal is that upon various complaints

received from few depositors of the Corporate Debtor, various regulatory

authorities investigating agencies took cognizance. Enforcement

Directorate issued letter dated 14.02.2019 in terms of Section 5 of the

Prevention of Money Laundering Act, 2002, (hereinafter referred to as

`PMLA Act, 2005'). The Adjudicating Authority by subsequent order dated

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 16 05.08.2019, confirmed the provisional attachment order. The Appellants

were arrested on 17.02.2018. Appellant No. 1 Deepak Skaharam Kulkarni

was released from Jail on 09.03.2023 and Appellant No. 2 Hemanti Deepak

Kulkarni was released from Jail on 18.11.2022. CIRP against the Corporate

Debtor commenced on 26.09.2019. Appellant's case is that Appellant being

lodged in Jail had no access to any of the documents prepared or drawn by

the Resolution Professional (RP). After release the Appellants were in

process of seeking further information from the stakeholders in respect of

Corporate Debtor, when they learnt that orders on the application for

approval of the Resolution Plan has been heard and reserved. On

23.06.2023, Adjudicating Authority allowed the application filed by the RP.

Appellant's case in the appeal is that the assets of the Corporate Debtor are

extremely undervalued.

15. It is submitted that actual book asset valuation of the assets is over

Rs. 1900 Crores and same has been sold at the meagre amount of around

Rs. 826.30 Crores in respect of which only a sum of Rs. 30 Crores is being

paid upfront and remaining amount is to be payable within seven years.

16. Appellant has brought on record a Valuation Report dated

28.08.2023. Appellant's case is that various assets of the Corporate Debtor

has not even been valued and the valuation has not been done even as per

ready reckoner valuation. Assets of the Corporate Debtor are being handed

over to the Successful Resolution Applicant (SRA) on throw away value.

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 17

17. Appellant's case further is that in the Resolution Plan, the assets

which do not belong to the Corporate Debtor have been included in the

Resolution Plan. The case of the Appellant is that the personal properties

of the promoters have been included in the Resolution Plan. The Appellant

has referred to Clause 13.8 of the Resolution Plan where the Plan

contemplate that 7.33 acres of land, at Fursungi shall be sold to the

Corporate Debtor the Deed of Conveyance by promoter Shirish Kulkarni.

Further land measuring 89.35 acres situated in Village Bavdhan, Taluka

Haveli, District Pune, being survey No. 326/1 has been included, which do

not belong to the Corporate Debtor.

18. It is the case of the Appellant that properties of promoters cannot be

included in the Resolution Plan. It is the case of the Appellant that under

Sections 18 & 25, IRP can take possession of assets of the Corporate Debtor

only.

19. Appellant's further case is that the assets having been attached

under the PMLA Act, 2005, prior to commencement of CIRP cannot be made

the subject matter of the Resolution Plan. The order passed by the

Adjudicating Authority, PMLA dated 06.08.2019 cannot be eclipsed by

operation of provisions of Section 14 of the Code, inclusion of the said

assets makes the Resolution Plan not in compliance of law. It is further

stated that Appellant had filed, after coming to know about the facts and

after being released from prison, an I.A. No. 2423 of 2023 before the

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 18 Adjudicating Authority, which application was kept pending and Resolution

Plan was approved by the Adjudicating Authority on 23.06.2023.

20. In the appeal, Appellant has prayed for setting aside the order dated

23.06.2023, passed by the Adjudicating Authority in I.A. No.1950/2023.

Comp. App. (AT) (Ins.) No. 1142/2023

21. This appeal has been filed by Shirish Deepak Kulkarni, one of the

promoters of the Corporate Debtor and son of Deepak Sakharam Kulkarni

and Hemanti Deepak Kulkarni.

22. Appellant's case in the appeal is that the Resolution Plan submitted

by Respondents No. 2 to 4 takes away the assets of which the Appellant is

owner. Appellant in the appeal in Paragraphs 7.1, 7.2 & 7.3 has pleaded as

follows:

"7.1. The Corporate Debtor i.e. D S Kulkarni Developers Limited was incorporated and it was engaged in the construction business. Print out of the Master Data of the Corporate Debtor as available on the official website of the Ministry of Corporate Affairs is annexed herewith and marked as ANNEXURE "A-5".

7.2. Property being land bearing numbers (i) Survey No. 46, Hissa No. 3 at Fursungi, (ii) Survey No. 53, Hissa No. 3B/2, (iii) Survey No. 36, Hissa No. I at Fursungi, (iv) Survey No. 47, Hissa No. IA, (v) Survey No. 48, Hissa No. I A and (vi) Survey No. 44, Hissa No. 7/1 at Fursungi were conveyed in favour of the Appellant.

Sl. No. Date of Property Description Conveyance

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 19 a. 29.09.2009 Gift Deed as executed by Ms. Shilpa Makrand Kulkarni in favour of Mr. Shirish Deepak Kulkarni for land bearing Survey No. 46, Hissa No. 3 at Fursungi.

b. 29.09.2009 Gift Deed as executed by Ms. Swarupa Makarand Kulkarni in favour of Mr. Shirish Deepak Kulkarni for land bearing Survey No. 53, Hissa No. 3B/2 and Land Bearing Survey No. 36, Hissa No. 1 at Fursungi. c. 29.09.2009 Gift Deed as executed by Ms. Sai Prakash Kulkarni (Sai Kedar Vanjape) in favour of Mr. Shirish Deepak Kulkarni for land bearing Survey No. 47, Land Bearing Survey No. 48, Hissa No. IA and Land Bearing Survey No. 44, Hissa No. 7/1 at Fursungi.

Copy of the Gift Deed dated 29.09.2009 executed by Ms. Shilpa Makrand Kulkarni in favour of Mr. Shirish Deepak Kulkarni for land bearing Survey No. 46, Hissa No. 3 at Fursungi is annexed herewith and marked as ANNEXURE "A-6". Copy of Gift Deed dated 29.09.2009 as executed by Ms. Swarupa Makarand Kulkarni in favour of Mr. Shirish Deepak Kulkarni for land bearing Survey No. 53, Hissa No. 3B/2 and Land Bearing Survey No. 36, Hissa No. l at Fursungi is annexed herewith and marked as ANNEXURE "A-7". Copy of Gift Deed as executed by Ms. Sai Prakash Kulkarni (Sai Kedar Vanjape) in favour of Mr. Shirish Deepak Kulkarni for land bearing Survey No. 47, Land Bearing Survey No. 48, Hissa No. lA and Land Bearing Survey No. 44, Hissa No. 7 /1 at Fursungi is annexed herewith and marked as ANNEXURE "A-8".

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 20 7 .3. The Appellant was arrested on 25.06.2018 as he surrendered in the Ld trial court upon directions of the Hon'ble Apex Court and thereafter, was finally released from Yerawada Central Prison, Pune on 06.03.2023. Thus, the Appellant never had access to any of the documentation being prepared or drawn by the Resolution Professional. Copy of the document proving the date of arrest and release of the Appellant is annexed herewith and marked as ANNEXURE "A-9" (Colly)."

23. Appellant's further case is that with regard to above land, there is no

written contract between the Appellant and the Corporate Debtor and there

is no contract between Appellant and any of the Financial Creditors and

further said properties are mortgaged in favour of Toyota Financial Services

India Ltd. in respect of loan given to DSK Motors Private Limited. It is

further submitted that proceeding under Section 95 has also been initiated

against the Appellant as State Bank of India (SBI) being C.P. IB No. 199

(MB)/2021 which proceedings are still pending. The case of the Appellant

is that Appellant was never given any opportunity in the CIRP of the

Corporate Debtor. The Appellant who was owner of the above property

cannot be compelled to transfer the same in favour of the Resolution

Applicant. The owner that is the Appellant cannot be divested of the rights

to enjoy the ownership rights. Appellant in the appeal has prayed for setting

aside the order dated 23.06.2023.

Comp. App. (AT) (Ins.) No. 1307/2023

24. The appeal has been filed by partnership firm consisting of Deepak

Sakharam Kulkarni and Hemanti Deepak Kulkarni.

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 21

25. The Appellant's case is that in the Resolution Plan in Appendix IV

bearing No. 10, Appellant's property being aggregate 89.35 acres survey No.

326/1 Village Bavdhan have been included in the Resolution Plan without

acknowledging that the aforesaid assets are owned by the Appellant

partnership firm. Appellant's case is that IRP/RP can take possession of

assets which are owned by the Corporate Debtor only. Assets which are not

owned by Corporate Debtor cannot be included in the Resolution Plan.

Proceedings under Section 95(1) has also been initiated against by Encore

Asset Reconstruction Company against DS Kulkarni Company being C.P.

IB No.1215/2022 which is still pending. The asset aggregating to 89.35

acres has been included the Resolution Plan without even specifying as to

in whose name the title vest.

26. The RP without verifying the records and without verifying the

ownership of the assets have included assets in the Resolution Plan. There

has been dereliction of duty by Respondent No. 1 and the Committee of

Creditors (CoC). The Partners of the Appellant firm and their family being

imprisoned on account of Criminal Proceedings could not actively realise

the nature of fraud that was being played on them in the CIRP. The

impugned order failed to consider that Resolution Plan is clearly in violation

of applicable provisions of law included but not limited to Transfer of

Property Act 1882.

27. Appellant's case is that property bearing survey No. 326/1 was

purchased by the Appellants by Sale Deed dated 07.06.2002 executed by

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 22 Lata Shivaji Ingale and another Sale Deed of the same date of 07.06.2002

executed by Shivaji Vithalrao Ingale in favour of the Appellant for land

bearing No. 326/1. The Appellant were never divested with the ownership

of the aforesaid plot in the approved Resolution Plan, Appellant's property

has been illegally dealt with, which Resolution Plan did not deserve the

approval by the Adjudicating Authority.

28. Partners of the Appellant being in jail till 09.03.2023 and 18.11.2022

respectively, they had never any access of any documentation being

prepared or plan of the Resolution Professional. The RP without access to

all relevant documents and without obtaining relevant documents have

placed the Resolution Plan before the CoC for approval. Appellant have also

prayed for setting aside the order dated 23.06.2023.

Comp. App. (AT) (Ins.) No. 1308/2023

29. The Appellant is a Company registered under the Companies Act

1956, DS Kulkarni Developers Limited, the Corporate Debtor, by Lease

Deed dated 24.09.2008 leased out land as mentioned in Schedule 1 to

Schedule 4 of the Lease Deed. The lease was taken by the Appellant for

commencement of school for professional courses for animation and

industrial design. Lease of land for 19 acres for 99 years for the yearly rent

of Rs. 1 Crore. Lessee was at liberty to mortgage the land in favour of

Financial Institution Banks for obtaining of financial/loans for

construction of building/structures. The Appellant has taken facility of Rs.

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 23 100 Crores and 20 Lakhs from Central Bank of India to construct and

operate the institute on the said property, charge was taken in favour of

Central Bank of India. The Appellant proceeded to build infrastructure on

the said lease property by investing an amount more than Rs. 263 Crores.

Government of Maharashtra, promulgated DSK World University Act, 2017,

which came into effect on 05.05.2017, establishing the University which

University is offering a variety of courses and the Resolution Plan submitted

by Respondents No. 2 to 4, the rights of Appellant have sought to be

extinguished. The Lease Deed executed by the Corporate Debtor for 99

years could not have been extinguished in the Resolution Plan. Corporate

Debtor at no point of time, including the Resolution Professional, had ever

issued a notice terminating the lease. Appellant has questioned the

provisions of the Resolution Plan 7.1.1.6.

30. It is the case of the Appellant that RP did not terminate the Lease

Agreement since on termination, the Appellant was entitled for

compensation with regard to building constructed by the Appellant on the

lease land, to save the Corporate Debtor from liability of paying

compensation, the Lease Deed was never terminated. The Resolution Plan

cannot terminate the Lease Deed which was granted for 99 years to the

Appellant. The Appellant has also prayed for setting aside the impugned

order dated 23.06.2023.

31. Now we come to appeals of Homebuyers, which are grouped in Group

II.

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 24 Comp. App. (AT) (Ins.) No. 1660/2023

32. The Appellant in the appeal claims to have been issued an allotment

letter dated 29.04.2017 by the Corporate Debtor and its sister concern DSK

Global Education & Research Ltd. in respect of flats in the project, namely

"DSK Vishwa Ph-VI, Anandghan" being developed by Corporate Debtor. The

allotment letters were issued to the Appellant on payment of approximately

90% of the total consideration and allotment letters were to be registered

on or before April 2019. CIRP having been initiated against the Corporate

Debtor, RP called for submission of claims from Homebuyers. RP issued a

set of direction and uploaded on the website under the name "directions to

submit the claim for Homebuyers". As per the directions, the homebuyers

were required to submit Form CA along with documents in order to prove

their claims against the Corporate Debtor. The Appellant submitted their

claim before the RP in October 2019 under the category "allotment letter

holders as Financial Creditors". The RP however, proceeded to reject the

claim on 25.05.2021, solely on the ground that said claims were based only

on allotment letters and there are no proof of payments made to Corporate

Debtor.

33. With regard to Appellants, the list of Creditors was published by the

RP as on 25.05.2021, in which list although claims submitted by the

Appellants were noticed, but claim was rejected with respect to Appellants.

With regard to Bharat Jhadav and others, following was mentioned in the

list of rejecting the claim "claim rejected as claim is based on just

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 25 allotment letter and no other supporting documents provided and

amount is also not received in Books of Corporate Debtor".

34. Appellant after the rejection of their claim filed an I.A. No.

1844/2021, which was filed on behalf of Association of Allotment Letter

Holders titled as DSK Anandghan (Allotment Letter Holders through its

Authorised Representative Bharat Jadhav) seeking a direction to admit

their claim. In the application, details of the Flat No. total consideration of

Flat, total amount paid and allotment date has been mentioned. The entity

who had issued a letter was also mentioned which were mostly the

Corporate Debtor, with regard to few Appellants allotment letter was issued

by DSK Global. In I.A. No. 1844/2021 notices were issued by Adjudicating

Authority on 25.08.2021 to which a Reply was also filed by the RP.

Adjudicating Authority, however, without deciding the application I.A.

1844/2021 proceeded to approve the Resolution Plan on 23.06.2023. By a

subsequent order dated 01.08.2023, I.A. No.1844/2021 was dismissed by

following order:

"IA 2157/2021 IA 1844/2021 IA 913/2023

Mr. Rohit Gupta, Ld. Counsel for the Applicant in IA 913 of 2023 and Mr. Shyam Kapadia, Ld. Counsel for the Resolution Professional of the Corporate Debtor are present. These Interlocutory Applications have been filed by Applicants, Home Buyers seeking direction against the Resolution Professional of the Corporate Debtor for admission of their rejected claims/modification of the Resolution Plan In this case the Resolution Plan has already been approved on 23.06.2023. Hence the present Interlocutory Applications become infructuous and thus, the same are disposed of."

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 26

35. Appellant aggrieved by order approving the Resolution Plan has come

up in this appeal. In the appeal, following prayers have been made:

"A. Allow the present appeal and set aside the order dated 01.08.23 passed by the Hon'ble National Company Law Tribunal, Mumbai Bench, uploaded on 11.08.23 whereby the Ld. Adjudicating Authority was pleased to dispose of IA No. 1844/2021 as being infructuous in view of the approval of resolution plan vide order dated 23.06.23 in CP(IB)/MB/No. 1633/2019; and;

B. Direct the Resolution Professional to admit the claims of the flat purchasers, members of the Appellant, based on their allotment letters and thereafter make provisions for such flat purchasers in the Resolution Plan; and;

C. Summon the entire record of IA No. 1844/2021 in CP(I.B.) No. 1633/2019; and

D. Ad-interim orders in terms of the aforesaid prayer.

E. Pass such other and further reliefs that this Hon'ble Appellate Tribunal may deem fit in the facts and circumstances of this case."

Comp. App. (AT) (Ins.) No. 1050/2023

36. This appeal by two Appellants Piyuja Suresh Sanghvi and Suresh

Sanghvi has been filed challenging the order dated 23.06.2023, by which

Resolution Plan has been approved.

37. Appellant's case in the appeal is that the Development Agreement

dated 31.12.2013 was entered between the Corporate Debtor as a

developer, acquiring development rights from DSK Global Education and

Research Ltd. with respect to property situated at Kirkatwadi, Taluka

Haveli, District Pune. In the year 2015, Appellant No. 2 has advanced

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 27 certain monies as loans to DSK Kulkarni and Company. Appellant's case is

that payments made to DSK Kulkarni and Company are reflected in the

Bank Statement of HDFC Bank. It is pleaded that in the year 2015,

Directors/Partners Shareholders of Corporate Debtor and DS Kulkarni

Company were the same person and management and affairs of the

Corporate Debtor as well as DS Kulkarni & Co. were controlled and

conducted by same person. In the year 2017, Corporate Debtor decided to

take over the liabilities of DS Kulkarni and Company accordingly adjusted

the loan of Appellant No. 2 advanced to DS Kulkarni Company and

executed a registered Agreement dated 30.06.2017 for a Flat bearing No.

201 in G Wing on 2nd Floor in the project DSK Vishwa Ph-VI, Anandghan.

The Corporate Debtor in the capacity of developer and DSK Global

Education & Research Limited as land owner, executed registered Tripartite

Agreement dated 30.06.2017 in favour of the Appellant in purchase of Flat

No 201. DS Kulkarni Developers Limited by the general entry bearing No.

six dated 26.06.2017 for the period from 01.06.2017 to 30.06.2017

adjusted the loan advanced by Appellant No. 2 through DS Kulkarni

Company against the consideration to be paid by the purchasers for the

Appellant towards the said Flat No 201.

38. Appellant made further payments towards VAT and service tax and

towards stamp duties and registration charges directly to the Corporate

Debtor towards purchase of the Flat. A copy of the Ledger Account of the

Appellant No. 1 maintained by the Corporate Debtor along with the copy of

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 28 Bank Statement has also been filed in support of the appeal. Appellant has

already paid the total consideration as well as the amount towards the

Stamp Duty and registration charges and VAT on service tax. The Corporate

Debtor, lastly, modified its RERA application in the month of July 2017,

which include the total No of Flats sold in G wing in project DSK Vishwa

Ph-VI, Anandghan, which also include the Appellant therein.

39. The Appellant in spite of continuous follow-up with the Corporate

Debtor to complete construction and handover possession did not get any

response nor they were aware of the commencement of the CIRP. Appellant

being doctors by profession were occupied by the profession and as soon

as they came to know about the CIRP, they filed their Form CA dated

29.03.2023, along with all supporting documents, including the registered

Tripartite Agreement. The RP vide email dated 03.04.2023, rejected the

claim of Appellant on the ground of delay in filing of the claim. Appellant

on 10.04.2023 filed an I.A. No. 2117/2023 before the Adjudicating

Authority. The Adjudicating Authority approved the Resolution Plan on

23.06.2023 and by subsequent order dated 22.11.2023, rejected I.A. No.

2117/2023 filed by the Appellant. Appellant also filed Comp. App. (AT) (Ins.)

No. 192/2024, challenging the order dated 22.11.2023, which appeal was

dismissed by this Tribunal on 21.02.2024.

40. Appellant aggrieved by the approval of the Resolution Plan vide order

dated 23.06.2023 has come up in the appeal.

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 29 Comp. App. (AT) (Ins) No. 1051/2023

41. The Appellant No. 2 Suresh Sanghwi has advanced certain money in

the year 2015 to DS Kulkarni and Company registered Agreement dated

30.06.2017 for Flat bearing No 601, G Wing on 6th Floor of Project DSK

Vishwa Ph-VI, Anandghan was executed in favour of the Appellant. The

registered Tripartite Agreement was executed with the Appellant as

purchaser wherein DSK Global Education & Research Ltd. as land owners

and Corporate Debtor as developer. By a general entry dated 30.06.2017,

the loan advanced by Appellant to DS Kulkarni and Company was adjusted.

The Appellant further made payment of VAT and service tax as well as

Stamp Duty on registration charge. In the application filed by the Corporate

Debtor through the Maharashtra RERA in July 2017, details of Flats sold

in G Wing including the name of the Appellant was also mentioned. After

admission of CIRP on 26.09.2023, when the Appellant came to know about

the CIRP, they filed their claim on 31.03.2023, which was rejected by RP

on the ground of delay. I.A. No. 2114/2023 was filed by the Appellant before

the Adjudicating Authority which claimed to be dismissed on 22.11.2023

against which Comp. App. (AT) (Ins) No. 192/2024, was filed by the

Appellant which was dismissed by this Tribunal on 21.02.2024. The

present appeal has been filed by the Appellant challenging the order dated

23.06.2023, approving the Resolution Plan by which Resolution Plan, the

Appellant have not been recognised as Homebuyers.

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 30 Comp. App. (AT) (Ins.) No. 1361/2023

42. This appeal has been filed challenging the order dated 01.08.2023

passed by the Adjudicating Authority in I.A. No. 2157/2021 filed by the

Appellant.

43. The Appellant's case is that Appellants are Homebuyers in Project of

the Corporate Debtor, namely DSK Madhukosh, situated in Village Mohili,

Taluka Kurla, sub-District Bandra, Mumbai. Appellants were issued

allotment letter in April 2017. All allotment letters in favour of the

Appellants were issued by the Corporate Debtor dated 20.04.2017 to

29.04.2017. In allotment letter issued in favour of Appellant No. 1 dated

24.04.2017, allotment of Flat No. 503, 5th Floor, in Wing B was made. The

allotment also acknowledged that Appellant has paid consideration of Rs.

81 Lakhs for the said Flat. The Appellants were handed over possession of

the flats. The Corporate Debtor did not execute the registered Agreement

with respect to the units aggrieved by which Appellant had approach the

Maharashtra RERA in which proceeding Authorised Representative of the

Corporate Debtor, gave an undertaking of affidavit admitting that full

consideration have been paid by the concerned Appellant and Corporate

Debtor shall registered agreement of sale on or before 31.05.2023. Relying

on the statement of Corporate Debtor, the Maharashtra RERA disposed of

the complaint. Order was passed by Maharashtra RERA on 05.02.2018 on

the complaint submitted by allottees. After initiation of CIRP, Appellants

filed their claim to the RP in Form CA in October 2019. RP sent an email

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 31 dated 17.07.2020, recognising that possession of Flat is with the allottees,

however, the Agreement has not yet been executed. RP informed that in

absence of duly stamped and registered Agreement, allottee cannot be

treated to be a legal owner of the property. Details of payments were asked

for. Appellant filed an I.A. No. 2157/2021 on 22.09.2021, seeking relief

against the action of the RP for non-execution of Sale Deed and rejection of

the claim of the Appellant. The said applications came to be dismissed on

01.08.2023, holding that application has been infructuous in view of order

dated 23.06.2023.

44. Appellant aggrieved by the said order filed appeal and prayed for

following reliefs:

"i. To set aside the Impugned Order dated August 1, 2023 passed by the Hon'ble National Company Law Tribunal, Mumbai Bench, Kolkata in the application filed under Section 60(5) of the IBC, 2016 being I.A. No. 2157/2021 in C.P. (IB) No. 1633/MB/2019; and/or ii. To direct Resolution Professional/ Respondent No. 1 or Successful Resolution Applicant/ Respondent No. 3 to register sale deed/agreement to sale of the units of the Appellants in the Madhukosh Project of the Corporate Debtor; and/or

iii. To direct Resolution Professional/Respondent No.1 to consider claims of the Appellants as submitted or pleaded before the Hon'ble NCLT;

iv. To direct Hon'ble NCLT, Mumbai Bench to rehear the matter and pass an order after hearing both side and considering all the facts and documents on records including orders of RERA;"

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 32 Comp. App. (AT) (Ins.) No. 1385/2023

45. The facts and the pleadings in this appeal is same as by the Appellant

in Comp. App. (AT) (Ins.) No.1361/2023.

46. The Appellant was also one of the applicants in I.A. No. 2157/2021

filed before the Adjudicating Authority questioning the action of the RP in

not executing the sale deed and rejecting the claim of the Appellant. I.A.

No. 2157/2021 was listed on various dates before the Adjudicating

Authority on different dates in year 2021 and 2022. On 13.06.2022,

Adjudicating Authority passed following orders:

"I.A. No. 1950 of 2021

This application is filed for approval of Resolution Plan. It is made clear that the present Application will be heard after disposing of all other pending Applications. Accordingly, the same is adjourned on 20.07.2022."

47. Although on various subsequent dates, all the applications including

the application of the Appellant was also listed, but I.A. No. 2157/2021 was

kept pending and Adjudicating Authority approved the Resolution Plan on

23.06.2023 and subsequently by the order dated 01.08.2023, dismissed

the application as infructuous.

48. In the appeal following prayers have been made:

"(a) set aside the Impugned Order dated 1st August 2023 passed by the learned National Company Law Tribunal Court-

I, Mumbai Bench in I.A. No. 2157 of 2021 in C.P (IB) 1633 (MB) 2019;

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 33

(b) pending the hearing and final disposal of the Appeal, stay the operation, effect and implementation of the Impugned Order dated 1st August 2023 passed by the learned National Company Law Tribunal Court-I, Mumbai Bench in LA No. 2157 of 2021 in C.P (IB) 1633 (MB) 2019;

(c) pending the hearing and final disposal of the Appeal, the Respondent/s, their servants, agents or any persons acting through or under them be restrained by and order of injunction from creating third party rights and/or dispossessing the Appellant from the Flat No. B-303, 3rd floor in the Building/Wing B admeasuring 52.46 sq. mtrs. of the total carpet area, in project "DSK Madhukosh" alongwith Parking space no. SCP-1 04 situated at CTS No. 659 comprising of S. No. 18/12 (Patt), 1711 (Part), Village Mohili, Tal Kurla, Sub District Bandra, Mumbai;

(d) award the costs of the proceedings;

(e) pass ex-parte/ ad-interim/ interim orders in terms of prayers

(b) and (c) above; and

(f) any other appropriate Order(s) as this Hon'ble Appellate Tribunal deems fit, just and proper, to protect the interests of the Appellants in the interest of justice, equity and good conscience."

49. Now we come to appeals under Group III, i.e., the appeals filed by

Operational Creditor.

Comp. App. (AT) (Ins.) No. 1223/2023

50. This appeal by five Appellants who claimed to be the Operational

Creditor of the Corporate Debtor has been filed challenging the order dated

23.06.2023, approving the Resolution Plan submitted by Respondents No.

2 to 4.

51. Appellant's case is that subsequent to the initiation of CIRP on

26.09.2019, Appellant filed their claim before the Resolution Professional,

which after verification was admitted by the RP in its entirety. Details of

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 34 claims filed by the Appellants and claim admitted and the amount received

under the Plan has been tabulated in para 7.3 of the appeal, which is as

follows:

Sr. Particulars Claim Claim Amount % of No. Submitted Admitted Received Amount Received 1. Sri Umiyaa 7,43,11,257/- 7,43,11,257/- 2,73,831/- 0.368% Construction Private Limited 2. Aryan 60,94,930/- 60,94,930/- 22,429/- 0.368% Images 3. Cosmos 54,46,997/- 54,46,997/- 20,781/- 0.368% Construction Machinery and Equipment Private Limited 4. Nikhil 55,48,330/- 55,48,330/- 20,418/- 0.368% Transport Company 5. Atharva 37,23,992/- 37,23,992/- 13,704/- 0.368% Events

52. Appellants' grievance in the appeal is that impugned order has failed

to correctly consider the market value of the assets of the Corporate Debtor,

which has been severely undervalued to accommodate the Resolution Plan

of the SRA and deprive the various Creditors including the Appellants of

their admitted dues. The commercial wisdom of CoC cannot be used to

defeat rights and claims of other creditors/stakeholders. The Operational

Creditors are lifeline of the Corporate Debtor and treatment of such

Creditors could adversely affect functioning of various industries. The

market value of the assets of the Corporate Debtor is approximately six

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 35 times to the amount proposed to be paid by the SRA under the Resolution

Plan. Adjudicating Authority has failed to apply its mind to the relevant

facts and circumstances.

53. Appellant has prayed for setting aside the order dated 23.06.2023.

Comp. App. (AT) (Ins.) No. 1226/2023

54. This appeal by 58 Appellants have been filed challenging the order

dated 23.06.2023, approving the Resolution Plan.

55. In the CIRP of the Corporate Debtor, the claim of Financial Creditors

and Operational Creditors were filed. The cumulative claim of the

Operational Creditors, including workers, employees was more than Rs.

10.74 Crores. In the Resolution Plan as against Rs. 10.74 Crores amount

of Rs. 9.89 Lakhs have been earmarked which is only 0.97% of the admitted

claim. The CoC never discussed or applied its mind to the payout to the

employees. The Government dues of Rs. 204 Crores were also extinguished

which is contrary to the dictum of Hon'ble Supreme Court in the matter of

`State Tax Officers' Vs. `Rainbow Papers Ltd.' reported in 2022 SCC

OnLine SC 1162. It is pleaded that assets of the Corporate Debtor are more

than Rs. 1,900 Crores which is reflected in the Balance Sheet itself. The

valuation has not taken into consideration the development potential of the

Corporate Debtor. True value of the Corporate Debtor is more than Rs.

4,000 Crores, whereas total valuation of the Resolution Plan is Rs. 826

Crores.

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 36

56. The Appellant in the appeal has raised various grounds to question

the Resolution Plan. Adjudicating Authority has not discussed the

payments relating to any class of Creditors, whereas the Adjudicating

Authority had to satisfy itself that the Resolution Plan meets the

requirement of Section 30(2). It was required for Adjudicating Authority to

satisfy whether the Operational Creditor are given their entitlements under

the provisions of the Code.

57. Appellant has prayed for setting aside the order dated 23.06.2023.

Submission of the parties in the Appeal(s)

58. We now proceed to note the submissions of learned Counsel for the

parties in the above Group of Appeal.

Company Appeal (AT) (Insolvency) No. 63 of 2024 - Deepak Sakharam Kulkarni & Anr. Vs Manoj Kumar Agarwal, Resolution Professional of D.S. Kulkarni Developers Ltd. & Ors.

59. We have heard Shri Krishnendu Datta, learned Senior Counsel

appearing for the Appellant; Shri Abhijeet Sinha, learned Senior Counsel

appearing for the RP; and Shri Neeraj Kishan Kaul and Shri Arvind Nayar,

learned Senior Counsel appearing for the Successful Resolution Applicant.

60. Shri Krishnendu Datta, learned Senior Counsel in support of the

Appeal, submits that CIRP process conducted by the RP and the CoC is in

violation of the provisions of the IBC and the CIRP Regulations, 2016. It is

submitted that CIRP of the Corporate Debtor came to an end on

13.06.2021, after extension and exclusion by the Adjudicating Authority.

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 37 The Resolution Plan, which was submitted by SRA on 02.07.2021, was after

expiry of the CIRP period. The Resolution Plans were revised and final

Resolution Plan was submitted on 29.07.2021, which was approved by the

CoC on 13.08.2021, i.e., subsequent to the expiry of the CIRP period, which

ended on 13.06.2021. The learned Counsel for the Appellant has referred

to Form-H, which has been noticed by the Adjudicating Authority in the

impugned order, which itself has suggested that 13.06.2021 was the date

of expiry of extended period of CIRP. Application for exclusion of time as

filed on 10.06.2021, no order was passed by the Adjudicating Authority,

extending the period of CIRP. Thus, the entire process of approval of

Resolution Plan, so held after expiry, is in clear violation of IBC and CIRP

Regulations. It is submitted that Appellant(s), were put behind the bar,

much before the commencement of CIRP and Appellant No.1 was released

on 06.03.2023, after the order was reserved by the Adjudicating Authority

on the Plan approval Application. The RP had no access to the Office of the

Corporate Debtor and the documents, since they were attached in the year

2017-18 itself by the EOW and subsequently by ED, all assets of the

Corporate Debtor were attached by Provisional Attachment Order, which

was confirmed on 05.08.2019. The Office of the Corporate Debtor and all

assets being attached, the RP without access to the Office of the Corporate

Debtor and the documents prepared incomplete and faulty Information

Memorandum. The entire process, which was founded on incorrect and

faulty Information Memorandum is vitiated. Shri Datta further submits

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 38 that Valuation Report obtained by RP were incorrect and shows too low

valuation of the assets of the Corporate Debtor. In paragraph-13 of the

Form-H, the RP himself has admitted that books and records of the

Company were attached by the EOW and ED, no employees were available

and the Applications filed for access of record and handing over of

possession, are pending to be adjudicated by the Adjudicating Authority.

The Report submitted by Two Valuers namely - Puneet Tyagi and Deepak

Bansal contains gross irregularities and there is unreasonable differences

in the Valuation Report. As per the Notification of the Urban Development

Department, dated 11.09.2014 under Maharashtra Regional and Town

Planning Act, 1966, actual parcel of land was 241.60 acres, whereas

Valuation Report submitted by the Puneet Tyagi, parcel of land measured

at only 218.6 acres and Valuation Report submitted by the Deepak Bansal,

parcel of land measures at only 233 acres. The above is glaring

discrepancies in the valuation exercise. Further, Valuer one has

considered fair value of parcel of land @ Rs.2.30 crores per acre, whereas

Valuer two considered fair value of parcel of land @ Rs.2.51 Crores per acre,

whereas as per the ready reckoner at value of @ Rs.3.14 crores per acre

was to be taken. There has been several other discrepancy in value of the

different projects of the Corporate Debtor. The work completed has not

been correctly measured. With regard to Bavdhan land of the Corporate

Debtor, which is shown as only 6.27 acres of land, whereas Valuer one has

measured the land parcel of 89.66 acres, whereas Valuer two has not even

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 39 valued the said parcel of land stating that the said land has been sold to

third party. No objection was raised by the RP to the above discrepancies

in the Report of the Valuers, nor attention of CoC was invited. The

Resolution Plan has included 89.66 acres of land at Bavdhan, which was

not the property of the assets of the Corporate Debtor. Audited Financial

Report mentions value of the assets of the Corporate Debtor as Rs.1906

crores. Several items of the property were not included by the Valuers and

several assets, which does not pertain to the Corporate Debtor has been

included, making both the Valuation Report faulty and unacceptable. The

Plan suffers from material irregularity and does not comply with the law.

61. Shri Abhijeet Sinha, learned Senior Counsel for the PR submits that

the RP has prepared the Information Memorandum on the basis of

attachment orders available from the Directorate of Enforcement. The

Suspended Directors being unavailable, could not provide any inputs or

documents. It is submitted that the RP conducted the proceedings in

accordance with the IBC and CIRP Regulations. The two Valuers were

appointed as per Regulation 35 of the CIRP Regulations, who have

submitted their Report. No objection at any point of time was filed by the

Appellant before the Adjudicating Authority and IA No.2423 of 2023 was

filed by the Appellant belatedly on June 7, 2023, challenging the approval

of Resolution Plan, when hearing on Application IA No.1950 of 2022 were

already heard and reserved on 22.02.2023. The RP has no information of

documents to believe that properties referred to by the Appellant in the

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 40 Appeal were not specifically owned by the Corporate Debtor. The RP

included the property, which were forming part of the special township area

as assets of the Corporate Debtor. The RP has acted in the best interest of

the CoC and the Corporate Debtor and conducted the CIRP as is where is

basis. It is submitted that record prepared by the RP were received from

the Regulatory Authorities and Investigation Agency, which was the basis

for preparing the Information Memorandum.

62. Shri Neeraj Kishan Kaul, learned Senior Counsel appearing for the

Respondent, submits that the Appellants, who were the Director and have

grounded the Corporate Debtor are not entitled to be heard. Valuation was

conducted as per Regulation 35 of the CIRP Regulations by the two Valuers,

who have assessed all assets of the Corporate Debtor. It is submitted that

period of CoC was extended till 24.08.2021, whereas Plan was approved on

13.08.2021. The learned Counsel for the Respondent has referred to the

order dated 23.06.2023 of the Adjudicating Authority. It is submitted that

SRA has no role in valuation exercise, which was conducted by the RP in

accordance with law. Even copy of the Valuation Report had not been

provided to the SRA. The Promoters have no locus to challenge the

valuation. It is submitted that there was no challenge to valuation by any

Member of the CoC, even in any paragraph of the Appeal, there was no

challenge to the valuation and it is only by way of an additional affidavit,

valuation is sought to be challenged by the Appellant. The Valuation

Report, as obtained by the Appellant is only for the purpose of the case,

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 41 which valuation does not include liabilities of the Corporate Debtor. The

RP in Financial Statement has mentioned the assets of the CD as Rs.1906

crores and has also mentioned the liabilities of Rs.1600 crores. The CD

has abandoned the Projects as well as the land and it is the SRA, who has

to deal and develop the Project. The development potential of the CD is for

SRA to consider.

63. Shri Krishnendu Datta, learned Senior Counsel making submissions

in his rejoinder submits that the Appellant has the locus to file the Appeal.

The Appellant - Promoter has right to receive the Resolution Plan. It is

submitted that there is no order of extension of CIRP and submission to

the contrary advanced by the Counsel for the Respondent is incorrect. It

is submitted that commercial wisdom of CoC, cannot be justified when

process is arbitrary. The law gives right to question the Plan. The Appellant

is not relying on 2023 Valuation Report. The submission of the Appellant

was that RP ignored the assets, which were part of the CD's asset. The

development potential is intangible assets of the Corporate Debtor. In the

Application filed by the SRA before the Stock Exchange, the value of the CD

was shown as Rs.3000 crores.

64. The learned Counsel for the parties have also placed reliance on

various judgments of this Tribunal as well as Hon'ble Supreme Court.

Company Appeal (AT) (Insolvency) No. 1142 of 2023 - Shirish Deepak Kulkarni Vs. Manoj Kumar Agarwal, Resolution Professional of D.S. Kulkarni Developers Ltd. & Ors.

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 42

65. We have heard Shri Krishnendu Datta, learned Senior Counsel

appearing in IA No.5185 of 2023; Shri P. Nagesh, learned Senior Counsel

appearing for the Appellant; Shri Abhijeet Sinha, learned Senior Counsel

for the RP and Shri Neeraj Kishan Kaul and Shri Arvind Nayar, learned

Senior Counsel appearing for the SRA.

66. Learned Counsel for the Appellant challenging the order dated

23.06.2023 submits that in the Resolution Plan approved by the CoC,

personal assets of the Appellant has been included. The Appellant's case

is that assets which were covered by Gift Deed dated 29.09.2009, three in

number, gifting various land at Village Fursungi, have been wrongly

included in the Resolution Plan. The Appellant being owner of the said

assets, the assets were required to be kept out of the Resolution Plan. It is

submitted that Clause 6.4.1.8 of the Resolution Plan states that properties

described in Appendix IV shall stand transferred to the Corporate Debtor

and further by Clause 13.8, the Appellant has been mandated to handover

the 7.33 acres of land at Village Fursungi and execute and register a Deed

of Conveyance in favour of the Corporate Debtor, which is beyond the

jurisdiction of the Resolution Plan. Respondent No.1 is not entitled to take

possession of the personal assets of the Promoter under Section 18(1)(f).

67. Learned Counsel for the RP submits that the properties of Fursungi,

Survey Nos.46, 53, 36, 47, 48 and 44 have been included as part of the

assets of the Corporate Debtor, which forms a small portion of a special

township area, which was owned and developed by the Corporate Debtor.

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 43 The Gift Deed, which have been executed in favour of the Appellant were

not brought to the attention of the RP, prior to the Appeal. The above assets

were included according to the information regarding the special township.

68. Shri Neeraj Kishan Kaul, learned Senior Counsel appearing for the

SRA refuting the submission of the Appellant, submits that land which is

claimed by the Appellant by virtue of above Gift Deeds, were all land

belonging to the Corporate Debtor and purchased from the consideration

of the Corporate Debtor. It is submitted that the above land, which have

been gifted to the Appellant were the land purchased by different Members

of the family, directly from farmers, for which the consideration was paid

to family Members by Hemanti Deepak Kulkarani and out of the said

consideration, the individual family Members have purchased the land

from farmers directly. Purchase by family Members of the Deepak

Sakharam Kulkarni were all on the basis of money received from the

Corporate Debtor/ its sister companies. Hence, the land did not belong to

the individual family Members in whose name Sale Deeds were purchased.

When individual family Members were not the rightful owner of the assets,

they have no right to gift the assets to the Appellant. Further, the entire

land covered by the Gift Deed is part of the integrated township project and

included in the order issued by the Collector, granting permission of

township, hence, it is not open for the Appellant to now claim right in the

assets, which do not really belong to the Appellant.

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 44

69. IA No.5185 of 2023 has been filed by the Toyota Financial Services

India Ltd. ("TFSIL"), who claimed to have extended credit facility of

Rs.103.60 crores to DSK Motors Pvt. Ltd. ("DSK Motors"), in which, the

Appellant was the Director. It is a case of the Toyota Financial Services

India Ltd. that to secure the credit facility, the Appellant mortgaged the

personal properties in favour of TFSIL. Shri Krishnendu Datta, learned

Senior Counsel has referred to the Memorandum of Entry for deposit of

Title Deeds dated 29.04.2017 as well as Memorandum of Entry for deposit

of Title Deeds dated 20.01.2018, by which the Appellant mortgaged

immovable property including Survey No.48 and 49 of Village Fursungi.

DSK Motors is currently undergoing liquidation. The Resolution Plan has

been approved, in which Survey No.48, Hissa No.1/C/2 and Survey No.49,

Hissa No.1A has been included. The properties, which are mortgaged to

the TFSIL cannot be included in the Resolution Plan, of which the TFSIL is

secured creditor. The NCLT lack jurisdiction to deal with the personal

properties of the Appellant, which are not the assets of the Corporate

Debtor. TFSIL prays that the Applicant be impleaded as party and be

heard.

Company Appeal (AT) (Insolvency) No. 1307 of 2023

70. We have heard Shri Sandeep Bajaj, learned Counsel for the

Appellant; Shri Abhijeet Sinha, learned Senior Counsel for RP; Shri Arvind

Nayar, learned Senior Counsel has appeared for SRA.

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 45

71. Shri Sandeep Bajaj, learned Counsel for the Appellant, challenging

the order of the Adjudicating Authority approving the Resolution Plan

submits that the Resolution Plan includes the assets of the Appellant,

which was purchased by two Sale Deeds dated 07.06.2002 purchased from

Shivaji Ingale and Shivaji Vithalrao Ingale respectively. With regard to

Survey No.326/1 at Bavdhan in the Revenue record Extract - 7/12, the

name of the Appellant appears. The Resolution Plan seeks to include the

said property as assets of the Corporate Debtor, which is clearly illegal and

in contravention of provisions of IBC and Transfer of Property Act, 1882.

The RP was empowered only to deal with assets of the Corporate Debtor

and the assets of third party in possession of Corporate Debtor, are not the

assets of the Corporate Debtor. The learned Counsel has referred to Section

18(1)(f) of IBC to support his submission. It is submitted that Provisional

Attachment Order issued by the Enforcement Directorate cannot be

considered as source of title of the property. The ownership assets of third

party whether related or not, cannot be extinguished through Resolution

Plan. It is submitted that liabilities in respect of said properties not being

taken over even the assets cannot be taken over. Shri Sandeep Bajaj,

further submits that challenging the order passed by this Tribunal,

affirming the rejection of the claim of the Appellant, Civil Appeal No.4354

of 2024 was filed by the Appellant, which Appeal was dismissed on

01.04.2024 clarifying that order dated 01.04.2024 in no way affect the

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 46 rights of third party, if any, in proceedings before the NCLT and NCLAT or

before Hon'ble Supreme Court.

72. Shri Abhijeet Sinha, learned Senior Counsel for the RP submits that

property S. No.326/1 was considered as part of the assets of the Corporate

Debtor as the same was specified in the schedule of the Provisional

Attachment Order dated 14.02.2019 passed by Enforcement Directorate.

It is submitted that the Appellant or its Promoters have never approached

the RP to raise its grievance. The Appellant has never approached the NCLT

also raising any grievance. All contentions are sought to be raised in this

Appeal for the first time. Respondent No.1 was never shown the purported

Sale Deed or any documents, hence, Respondent No.1 had justified reason

to believe that property was owned by the Corporate Debtor, as the same

was clearly mentioned and attached by ED as per order dated 14.02.2019.

The RP has acted in best interest of the CoC and the Corporate Debtor and

conducted the exercise as is where is basis.

73. Shri Arvind Nayar, learned Senior Counsel appearing for SRA

submits that the Partners of the Appellant Firm were Deepak Kulkarni and

Hemanti Kulkarni, who were directly responsible of the precarious state of

financial affairs of the Corporate Debtor. The Appellant cannot be held to

be entitled to challenge the approval of Resolution Plan. The interest of the

Corporate Debtor for the purpose of the IBC is not to be conflated with the

interest of the Promoter. The Appellant's challenge is grossly barred by

delays and latches. The Appellant never approached the NCLT to raise any

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 47 grievance, which is sought to be raised in this Appeal. Shri D.S. Kulkarni,

who is one of the Partners of the Appellant, filed an IA No.722 of 2023 before

the NCLT on 21.02.2023 seeking the reliefs stated therein. Therefore, if

the Appellant could take out his own application before the NCLT, it does

not stand to reason why the Appellant had not filed any Application before

the Adjudicating Authority. The property was mentioned in the Information

Memorandum as the assets of the Corporate Debtor. The property was

mortgaged in favour of Tata Capital Housing Finance Limited ("TCHFL").

The Corporate Debtor is signatory to the creation of mortgaged in favour of

TCHL. TCHFL was the Member of the CoC of the Corporate Debtor and

loan advanced against the aforesaid mortgage are being repaid by the SRA

in terms of the Resolution Plan. The Appellant's Firm or its Partner have

never challenged the PMLA order. It is further submitted that Civil

Disputes and title claims are not the part of jurisdiction of NCLT. The SRA

has taken various steps in furtherance of the implementation of the Plan.

Company Appeal (AT) (Insolvency) No. 1308 of 2023

74. We have heard Shri Sandeep Bajaj, learned Counsel for the

Appellant; Shri Abhijeet Sinha, learned Senior Counsel appearing for the

RP; and Shri Arvind Nayar, learned Senior Counsel appearing for SRA.

75. Shri Sandeep Bajaj submits that lease was executed in favour of the

Appellant by the Corporate Debtor dated 24.09.2008, by which Lease Deed

executed for 99 years, the Corporate Debtor has leased 19 acres land

situated at Village Fursungi , Taluka Haveli, District Pune with granting

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 48 lessee right to construct buildings and structures. The Appellant has

constructed educational institution after taking facility from Central Bank

of India of Rs.100 crores. The Resolution Plan contemplates

extinguishment of rights of the Appellant in the building, which was

constructed on the lease land. The lease provided that the for terminating

the lease, the CD was required to assess the building and make payment

spent towards construction. The ownership of building is of the Appellant.

Under Section 18, the RP cannot take the assets of subsidiary company.

The CD or RP never terminated the lease. The Appellant has paid rentals

and even if any rental is due, it could have been adjusted. The Appellant

has not filed its claim, since it had not arisen. The claim of the Appellant,

would only arise when CD terminate the lease. The Central Bank has filed

its claim during CIRP. The lease was never terminated, it is only in the

Resolution Plan the building has now been transferred. The building

cannot be owned by the lessor.

76. The learned Counsel for the RP replying to the submissions of the

Appellant, submits that as per the Lease Deed dated 24.09.2008 executed

by the Corporate Debtor with regard to Survey No.53, 54, 55 and 56 at

Village Fursungi, the Appellant was required to pay yearly rent of Rs.1

crore. The Appellant has continuously defaulted in payment of rental

amount, since April 2013 to till date. The total outstanding rent against

the Appellant is Rs.10.50 crores. The Appellant was also liable to pay

interest with delayed payment on rentals. The Lease Deed provided that in

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 49 event, rental is due fore more than 180 days, the Corporate Debtor shall be

entitled to re-enter the property. The RP has issued a notice dated

09.10.2020 to the Appellant in relation to breach of terms and conditions

of the Lease Deed. The CD was fully entitled to terminate the lease.

77. The learned Senior Counsel for the SRA submits that assets, which

was leased out to the Appellant, belong to the Corporate Debtor and the

Resolution Plan has rightly taken over the entire assets of the Corporate

Debtor including the land and building standing thereon, which is part of

the CIRP. It is submitted that no claim was filed by the Appellant in the

CIRP of the Corporate Debtor, hence, the Appellant is not entitled to

challenge the approval of Resolution Plan.

78. Now we proceed to consider appeals relating to homebuyers, we shall

notice the submissions of the parties in this group of appeals.

Company Appeal (AT) (Insolvency) No.1660 of 2023

79. We have heard Shri Kushal Choudhary and Shri Angad Ahluwalia,

Learned Counsel for the Appellants and Shri Abhijeet Sinha, Learned

Senior Counsel appearing for the Resolution Professional and Shri Arvind

Nayar, Learned Senior Counsel appearing for the Successful Resolution

Applicant.

80. Counsel for the Appellant submits that the Appellants were allotted

flats in Project- 'DSK Vishwa Phase-VI, Aanandghan' by the Corporate

Debtor vide allotment letters issued between 20.04.2017 to 29.04.2017.

The allotment letters clearly acknowledged the payments received by the

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 50 Appellants. Appellants had made payments of approximately 90% of the

total consideration. Allotment letters were issued by the Corporate Debtor

and its sister concern- 'DSK Global Education and Research Limited'. After

initiation of CIRP, Appellants filed their claims under the category of

allotment letter holders in October 2019. However, the same came to be

rejected by the Resolution Professional on 25.05.2021 on the ground that

no proof of payments to the Corporate Debtor has been filed by the

Appellants. It is submitted that the Corporate Debtor having acknowledged

the payments by the Appellants, there was no occasion for the Resolution

Professional not to accept the payments. The list of creditors published by

the Resolution Professional on 25.05.2021 mentioned reason for rejection

of the claim and the only reason was that Appellants had not submitted

proof of payment to the Corporate Debtor. It is submitted that the

Appellants have filed their IA No.1844 of 2021 before the Adjudicating

Authority on 06.08.2021 questioning the decision of Resolution

Professional which application remains pending before the Adjudicating

Authority and was never decided before approval of the Resolution Plan. It

was only on 01.08.2023 that application was rejected as infructuous. When

application has questioned the Resolution Professional's decision rejecting

their claims, it was incumbent on the Adjudicating Authority to decide the

application prior to approval of the Resolution Plan. Appellants who had

given their life savings for allotment of flat and having paid 90%

consideration rejection of the claims by the Resolution Professional was

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 51 wholly illegal and unsustainable. Adjudicating Authority failed to consider

the interest of the flat purchaser which is paramount.

81. Counsel for the Resolution Professional replying the submissions of

the Appellants contended that the claims of the Appellants were rejected

since there were no supporting documents provided except allotment letters

by the Corporate Debtor. No amount was received in the books of accounts

of the Corporate Debtor. It is further submitted that the claims of some of

the Appellants were rejected since it was on the basis of the agreement

made with 'DSK Global Education and Research Ltd.' and no amount was

received in the books of accounts of the Corporate Debtor. It is further

submitted that the payments made to 'DSK Kulkarni & Company' was

never deposited or encashed by the Corporate Debtor. No payments having

been made by the Appellants to the Corporate Debtor, the claim was rightly

rejected by the Resolution Professional.

82. Counsel for the Successful Resolution Applicant submitted that no

steps were taken by the Appellants to get their application IA No.2157 of

2021 decided the claims of the Appellants was solely on the basis of

allotment letters without evidence of consideration having been paid to the

Corporate Debtor. Application before the NCLT was not maintainable since

it was filed by Association purporting to espouse the cause of the

constituent members. With regard to 8 Appellants, it is submitted by the

Counsel for the Appellants that the allotment letters were issued by 'DSK

Global Education and Research Ltd.', sister concern of the Appellants

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 52 whereas for Appellant Nos.2 and 24 although allotment letters were issued

by the Corporate Debtor, however payments were made to sister concern

'DS Kulkarni & Company'. With regard to other Appellants, although

allotment letters were issued by the Corporate Debtor but no supporting

documents were provided regarding payments to Corporate Debtor and

amount never reflected in the books of the Corporate Debtor.

Company Appeal (AT) (Insolvency) No.1050 of 2023 & Company Appeal (AT) (Insolvency) No.1053 of 2023:-

83. We have heard Shri Chaitanya Nikte, Learned Counsel for the

Appellant, Shri Abhijeet Sinha, Learned Senior Counsel for the Resolution

Professional and Shri Arvind Nayar, Learned Senior Counsel for the

Successful Resolution Applicant.

84. Submissions advanced by Counsel for the Appellants in both the

above appeals being similar are noticed together.

85. Counsel for the Appellants submits that the Appellants have paid

amount to sister concern which amount was acknowledged and adjusted

towards consideration of flat at the time of adjustment. Corporate Debtor

admittedly took money in its account towards Stamp Duty, Registration,

Service Tax and VAT. Appellants in support of his submissions referred to

ledger filed along with the appeals. In the RERA disclosures made by the

Corporate Debtor the flat allotted to the Appellants were sold. It is

submitted that a Tripartite Agreement was entered between the Appellants,

Corporate Debtor and its sister concern dated 30.06.2017 allotting the flats

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 53 to the Appellants in the Project- 'DSK Vishwa'. The Corporate Debtor who

was a developer has acquired development rights in the land mentioned in

Schedule II (a) of the Agreement dated 30.06.2017 by executing a

Development Agreement dated 31.12.2013. 'DSK Global Education &

Research Limited' being land owner also was a part of the Agreement.

Allotment of flats to the Appellants cannot be denied by the Resolution

Professional. Appellants being unaware of the CIRP process could not file

the claim before the Resolution Professional within time and claims could

be filed by the Appellants only in March 2023 which was rejected by the

Resolution Professional vide e-mail dated 03.04.2023 on the ground that

plan has been approved by the CoC on 13.08.2021, hence, claim cannot be

considered. Appellants filed an IA before the Adjudicating Authority which

too was rejected against which Appellants filed an appeal before this

Tribunal which was dismissed by order of this Tribunal dated 21.02.2024

passed in Company Appeal (AT) (Insolvency) No.192 of 2024 and Company

Appeal (AT) (Insolvency) No.193 of 2024. It is submitted that in view of the

law laid down by this Tribunal in "Puneet Kaur vs. K.V. Developers Pvt.

Ltd. & Ors.- Company Appeal (AT) (Insolvency) No.390 of 2022", it was

duty of the Resolution Professional to reflect the claims which are in the

records of the Corporate Debtor in the Information Memorandum. There

being registered agreement entered with the Corporate Debtor which is part

of the record of the Corporate Debtor, Resolution Professional was obliged

to reflect the claim of the Appellants. Resolution Professional has failed in

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 54 its duty to notice and reflect the allotment in favour of the Appellants which

was through a Registered Agreement entered into a Corporate Debtor on

30.06.2017 i.e. more than two years prior to commencement of the

Insolvency.

86. Counsel for the Resolution Professional justifies its rejection of the

claims of the Appellants on the ground that the same was filed after

approval of the plan by CoC. It is submitted that the plan having been

approved by the Adjudicating Authority, the claim of the Appellants cannot

be considered. It is further submitted that even on the merits, the claims

of the Appellants deserve to be rejected. It is submitted that the Appellants

loaned money to sister concern of the Corporate Debtor i.e. 'DSK &

Company' and not to the Corporate Debtor and no documents was filed to

show that money paid by the Appellants to 'DSK & Company' has been

transferred to the Corporate Debtor. Resolution Professional has appointed

Independent Forensic Auditor to carry out transaction. Erstwhile

promoters of the Corporate Debtor have entered into agreement with

homebuyers but no money has been paid to the Corporate Debtor.

87. Counsel for the Successful Resolution Applicant submits that the

appeal filed by the Appellants having been dismissed by order dated

21.02.2024 where the Appellants have challenged the order of the NCLT

dated 22.11.2023 rejecting their applications, the Appellants have no locus

to file these appeals. In the order dated 21.02.2024 passed by this Tribunal

rejection of the claim of the Appellants has been upheld. It is submitted

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 55 that the Appellants have not made any challenge to the Resolution Plan

before the Adjudicating Authority now they cannot be allowed to challenge

the Resolution Plan. Appellants cannot be held to be homebuyers.

Appellants have filed their claims before the Resolution Professional with

great delay. They having filed claims only in March 2023 i.e. after the order

was reserved in the plan approval application, Adjudicating Authority has

rightly rejected their claims.

Company Appeal (AT) (Insolvency) No. 1361 of 2023 & Company Appeal (AT) (Insolvency) No. 1385 of 2023:-

88. We have heard Shri Gaurav S. Sethi, Shri Varun Garg and Shri Harsh

Pandya, Learned Counsel for the Appellants in Company Appeal (AT)

(Insolvency) No. 1361 of 2023 and Shri Kunal Cheema, Learned Counsel

for the Appellant in Company Appeal (AT) (Insolvency) No.1385 of 2023.

Shri Abhijeet Sinha, Learned Senior Counsel for the Resolution

Professional, Shri Arvind Nayar, Learned Senior Counsel for the Successful

Resolution Applicant and Shri B.P Singh, Learned Counsel appeared for

the Bank of Maharashtra.

89. Counsel for the Appellants submits that the Appellants were allotted

the flats in the Project- 'DSK Madhukosh' situated in Village Mohill, Tal

Kurla, Sub-District Bandra, Mumbai. The allotment letters itself mentioned

that Appellants have paid the entire consideration and they have also

agreed to pay Stamp Duty, Registration Fee and other charges. Appellants'

case is that after allotment letters they were handed over the possession of

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 56 the units and they have been continuing in possession since then. The

Corporate Debtor did not execute the agreement in favour of the

homebuyers then complaint was filed before the Maharashtra Real Estates

Regulatory Authority by one of the Appellants where the Corporate Debtor

had appeared and undertaken to execute the Registered Agreement for Sale

by May, 2018. The complaint was disposed of by RERA on 05.02.2018 i.e.

much before the initiation of CIRP. When before RERA Authority, the

Corporate Debtor admitted that the Appellants are allottees and Agreement

shall be executed in their favour, the Resolution Professional has

committed gross error in rejecting the claim of the Appellants. Appellants

filed their claims before the Resolution Professional in October, 2019 as per

the guidelines issued by the Resolution Professional which claim was

rejected by the Resolution Professional on 17.07.2020. Appellants have

filed an IA No.2157 of 2021 before the Adjudicating Authority against the

unjust and illegal actions against the Resolution Professional. The

Adjudicating Authority on 23.06.2023 approved the Resolution Plan but

kept the application filed by Appellants pending which was dismissed on

01.08.2023 as infructuous.

90. Shri Kunal Cheema, Learned Counsel has further submitted that in

fact while hearing the applications filed by the Appellants and plan approval

application, Adjudicating Authority has passed earlier orders that plan

approval application shall be heard after all applications are decided.

However, departing from its earlier order passed by the Adjudicating

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 57 Authority, Adjudicating Authority proceeded to approve the Resolution Plan

on 23.06.2023 and kept the application of the Appellants pending which

action of the Adjudicating Authority is contrary to its own order and

unsustainable. Appellants who have paid the total consideration and are in

possession of their flats, they cannot be given a treatment as has been given

by the Resolution Professional and the Adjudicating Authority. The action

of the Resolution Professional in rejecting the claim is wholly uncalled for

and unjustified. After receiving the claims by the Appellants, Resolution

Professional has sent an e-mail to the Appellants where it was noticed that

the Appellants are in possession of the flats. In IA No.2157 of 2021, reply

was also filed in which Resolution Professional has reiterated its stand that

amount having not been received in the account of the Corporate Debtor,

the claim cannot be admitted.

91. Counsel for the Resolution Professional replying the submissions of

the Appellants submits that the Appellants have failed to attach any proof

of actual payments made to the Corporate Debtor. Payments made by the

Appellants were not reflected in the books of accounts of the Corporate

Debtor, therefore, the Resolution Professional was constraint to reject the

claim. Only such amount which are raised under any transaction or

purchase agreement would have affect the commercial borrowing when

amount is paid to the Corporate Debtor and reflected in the books of

account of the Corporate Debtor. Admission made before the RERA

Authority on behalf of the Corporate Debtor was only in respect of one of

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 58 the Appellants. It is submitted that the homebuyers have approved the

Resolution Plan and miniscule minority cannot object the same.

92. Counsel for the Successful Resolution Applicant also refuted the

submissions of the Appellants and submits that the Appellants have failed

to prove any payment to the Corporate Debtor, hence, the claim was rightly

rejected by the Resolution Professional. Amount shown in the allotment

letters given to the Appellants were never received by the Corporate Debtor

in its bank account. Reliefs sought by the Appellants before NCLT could

not have been granted by the Adjudicating Authority. Undertaking before

the RERA Authority was given by the Authorised Representative of the

Corporate Debtor. It is submitted that the Appellants are not entitled for

any relief in the Appeals.

93. Now we proceed to consider the Appeals in Group-III i.e. Appeals filed

by the Operational Creditors and Employees.

Company Appeal (AT) (Insolvency) No. 1223 of 2023:-

94. We have heard Shri Krishnendu Dutta, Learned Counsel for the

Appellant, Shri Abhijeet Sinha, Learned Senior Counsel for the Resolution

Professional and Shri Arvind Nayar, Learned Senior Counsel for the

Successful Resolution Applicant.

95. Counsel for the Appellants submits that the Appellants who are

Operational Creditors whose full claims were admitted by the Resolution

Professional have been proposed an amount of 0.368% which is nothing

but denial of any claim of the Appellants. Operational Creditors who are life

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 59 line of the Corporate Debtor cannot be treated in such manner. It is further

contended that the assets of the Corporate Debtor has been severely

undervalued to deprive various creditors including the Appellants their

admitted claims. Approval of the Resolution Plan by the CoC and

subsequent approval by the Adjudicating Authority is against settled

position of law. Adjudicating Authority has failed to consider the object of

the Code namely value maximisation of the assets of the Corporate Debtor

and protection of the interest of all stakeholders of the Corporate Debtor.

Respondents have failed to protect the interest of the Appellants

Receivables due to the Corporate Debtor are more than Rs.200 Crores and

the Successful Resolution Applicant's proposal to make payment of Rs.866

Crores within seven years defeats logic and commercial wisdom. The value

of the Corporate Debtor is approximately six times the amount proposed to

be paid by the Successful Resolution Applicant under the Resolution Plan.

96. Counsel for the Successful Resolution Applicant submits that the

Appellants being Operational Creditors are not entitled to be paid any

amount beyond their entitlement under Section 30(2)(b) of the IBC.

Appellants did not take any measure to contest the Resolution Plan before

the Adjudicating Authority. They failed to file any objection before the

Adjudicating Authority. Appellants have no locus standi to challenge the

approval of the Resolution Plan based on commercial wisdom of the CoC.

Company Appeal (AT) (Insolvency) No. 1226 of 2023:-

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 60

97. We have heard Shri Krishnendu Dutta, Learned Senior Counsel for

the Appellants, Shri Abhijeet Sinha, Learned Senior Counsel for the

Resolution Professional and Shri Arvind Nayar, Learned Senior Counsel for

the Successful Resolution Applicant.

98. Appellants 58 in numbers are employees of the Corporate Debtor

whose claim in the CIRP was admitted. Appellants claim was accepted by

Rs.10.74 Crores and they have been proposed an amount of Rs.9.89 lacs

in the Resolution Plan which is 0.97%. There is no fair or equitable

treatment to the Appellants. It is submitted that the payments to the related

party debenture holders, debenture holders, fixed deposit holders, banks

and financial institutions ranges from 100% to 66.47% whereas employees

are shabbily treated having paid only 0.97% of their claims. The Corporate

Debtor has not been correctly valued in the CIRP. Valuation assigned to the

Corporate Debtor is much lower to the actual valuation of the Corporate

Debtor. The IBC and its Regulations contemplate fair and equitable

treatment to all stakeholders including the employees. The payments

proposed to the Appellants can neither be said to be fair nor equitable and

the mandate of the IBC and CIRP Regulations have been flouted by the

Respondents.

99. Counsel for the Resolution Professional refuting the submissions of

the Appellants submits that the CIRP has been conducted according to

procedure prescribed, no objection was raised by the Appellants before the

Adjudicating Authority. Valuation Report cannot be challenged by the

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 61 Appellants. Appellants were not entitled for any higher amount to what has

been recommended in the Resolution Plan.

Consideration of issues raised in the appeals.

Comp. App. (AT) (Ins.) No.63/2024

100. The first submission which has been pressed by Sh. Krishnendu

Dutta, learned Sr. Counsel for the Appellant is that the Plan has been

approved by the CoC after expiry of the CIRP period and the entire process

leading to approval of the Resolution Plan is vitiated and contrary to the

provisions of IBC and CIRP Regulations, 2016. Although in the appeal filed

by the Appellant, no such ground was initially taken, but in the Additional

Affidavit dated 31.01.2024, relevant dates and events have been pleaded to

support the submission.

101. Sh. Krishnendu Dutta learned senior Counsel contended that the

last date of CIRP came to an end on 13.06.2021 after expiry of the extension

period. It is submitted in Form H which was filed by RP, 13.06.2021 was

also mentioned as last date on which CIRP expired. It is submitted that

although in the Form H it was noticed that an application for extension was

pending but no orders were passed for extension of CIRP, CIRP period came

to an end.

102. Learned Counsel for the Respondent refuting the above submissions

has placed before the Court the copy of the order dated 11.01.2022 passed

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 62 by the Adjudicating Authority in I.A. No. 2017/2021 and the order dated

20.06.2022 passed in I.A. No. 1563/2022.

103. We now proceed to consider the grounds as urged by the Counsel for

the Appellant. The Resolution Plan was approved by the CoC on 13.08.2021

and thereafter RP filed the application before the Adjudicating Authority on

18.02.2022 along with Form H. Form H, which was filed by RP has been

extracted by the Adjudicating Authority in Paragraph 14 of the impugned

order. Column Nos. 13 to 17 of Form H which is relevant for the present

purpose is as follows:

"FORM H COMPLIANCE CERTIFICATE (Under Regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 I, Manoj Kumar Agarwal, an Insolvency Professional enrolled with IIIPICAI and registered with the Board with registration number IBBI/IPA-001/IP-Poo714/2017-18/11222, am the Resolution Professional for the Corporate Insolvency Resolution Process (CIRP) of DS Kulkarni Developers Limited (DSKDL).

2. The details of the CIRP are as under:

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 63 Sl. Particulars Description No. 13 Date of Approval of 13.08.2021 Resolution Plan by CoC 14 Date of Filing of 18.02.2022 Resolution Plan with Adjudicating Authority 15 Date of Expiry of 180 On March 12, 2020, the days of CIRP RP had filed an application for extension of 90 days and the same was granted by Hon'ble NCLT. The RP further filed exclusion applications twice on March 2, 2021 and June 10, 2021.

However, the 2nd Exclusion Application dated June 10, 2021 has neve been listed. Therefore, the last date of the CIRP is subject to the outcome of the second Exclusion Application dated June 10, 2021. 16 Date of Order extending 03.12.2020 (90 days the period of CIRP extension was granted from the date of extension order) 17 Date of Expiry of 13.06.2021 (after

Extended Period of CIRP considering the extension and exclusion granted by the Hon'ble NCLT Mumbai Bench).

Subsequent to the above, last exclusion application filed on 10.06.2021 for seeking a further exclusion of time till 23.05.2021 is awaiting hearing."

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 64

104. At Item No. 17, RP has mentioned that 13.06.2021 is the date of

expiry for extended period of CIRP. However, in the same column, it has

also been mentioned "subsequent to the above last Exclusion Application

filed on 10.06.2021 for seeking for further exclusion of time till 23.05.2021

is awaiting hearing". The above statement clearly indicates that application

for exclusion of time till 23.05.2021 was filed on 10.06.2021 and awaiting

hearing.

105. Learned Counsel for the RP has placed before the Court two orders

i.e., order dated 11.01.2022 passed in I.A. 2017/2021, by which

Adjudicating Authority has allowed an exclusion from 24.03.2021 to

22.05.2021, i.e., period of 60 days. The order dated 11.01.2022 passed in

I.A. No. 2017/2021 is as follows:

"Mr. Shyam Kapadia, Advocate for the Applicant/Resolution Professional is present. This is an Application seeking exclusion of 60 days from the Corporate Insolvency Resolution Process (CIRP) period. This Bench vide order dated 24.03.2021 had allowed the exclusion for period of 24.03.2020 to 23.03.2021 for one year. The present Application now seeks exclusion from 24.03.2021 to 22.05.2021. This Bench allows the exclusion of 60 days from the CIRP period. Accordingly, IA 2017/2021 is allowed and disposed of."

106. Subsequently, an application was filed by the RP being I.A. No.

1563/2022 for rectification of the order dated 11.01.2022, where it was

prayed that another 2 days time be allowed to complete the Resolution

Process. The Adjudicating Authority while noticing the order dated

11.01.2022 has noticed that exclusion of time was granted extending the

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 65 CIRP period till 24.08.2021. Adjudicating Authority vide order dated

20.06.2022 granted exclusion of two more days time i.e., from 22.05.2021

till 24.05.2021. The order dated 20.06.2022 is as follows:

"IA 1563/2022

This is an Application filed by the Applicant, Mr. Manoj Kumar Agrawal, RP of the Corporate Debtor, seeking rectification of order dt. 11.01.2022, whereby exclusion of time was granted w.e.f. 24.05.2021, extending the CIRP period till 24.08.2021. Counsel appearing for the Applicant submits that time granted by this Bench to complete the Resolution Process expired, however the CIRP could not be completed. Hence, they require extension of another two days' time to complete the Resolution process. Having considered the submission of the Counsel and taking note of peculiar circumstances, this Bench in exercise of power enshrined in Rule 11 of NCLT Rules, 2016, grant Two more days' time from 22.05.2021 till 24.05.2021 to complete the Resolution Process.

With the aforesaid observation, IA 1563 of 2022 is allowed and disposed of."

107. Whether the above order can be read to mean that CIRP period stood

extended from 13.06.2021 till 24.08.2021 or the orders cannot be treated

to any extension of CIRP period is a question to be answered.

108. There is no dispute between the parties that CIRP period was coming

to an end on 13.06.2021, which is the case taken by the Appellant in

Additional Affidavit filed on 31.01.2024. It was pleaded in the list of dates

and events as contained in Paragraph 8(d) of the Additional Affidavit that

on 13.06.2021, CIRP period expired even after the extending period.

109. When we look into the order dated 11.01.2022, as extracted above, it

is clear that exclusion of 60 days' time was granted from 24.03.2021 to

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 66 22.05.2021 meaning thereby that 60 days exclusion was allowed, and when

we add this 60 days from after 13.06.2021, it goes to 12.08.2021. It appears

that it is due to the aforesaid reasons a rectification application was filed

by RP being I.A. No. 1563/2022, praying for exclusion of further two days'

time to complete the process and by order dated 20.06.2022, in addition to

60 days exclusion allowed by order dated 11.01.2022 two days further time

was allowed which period clearly covered the date on which Resolution Plan

was approved by the CoC i.e., 13.08.2021. The Form H although has

noticed that application for exclusion is pending, but order dated 11.01.222

and 20.06.2022 were not referred to in the Form H and when we read Form

H along with the orders dated 11.01.2022 and 20.06.2022 passed by the

Adjudicating Authority, granting exclusion of time till 13.08.2021, which is

the date of which the Resolution Plan falls well within the CIRP period,

hence the submission of the Appellant that Resolution Plan was approved

by the CoC after expiry of the CIRP period cannot be accepted.

110. Now we come to the next submission of Sh. Krishnendu Dutta,

learned Sr. Counsel for the Appellant questioning the valuation of the

Corporate Debtor as obtained by the RP. Appellant submits that RP did not

have relevant records of the Corporate Debtor and the Appellant being

behind the prison could not give any documents or assistance to the RP

leading the RP to obtain valuation of the assets on incomplete information

which lead valuation of the assets which is not the correct valuation and is

much lower than the correct valuation of the assets of the Corporate

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 67 Debtor. It is further submitted that in the financial statements prepared by

the RP assets of the Corporate Debtor were valued as Rs. 1,906 crores,

whereas two valuers pointed out by RP gave much lower valuation.

111. It is on the record that in the Meeting of the CoC held on 08.11.2019

two registered valuers were appointed. The RP issued letter to the two

valuers, namely Puneet Tyagi and Deepak Bansal to value the land and

building of the Corporate Debtor. Appellant by Additional Affidavit dated

29.02.2024 has brought on the record Valuation Reports Submitted by

both the valuers. Valuation Report was submitted by Puneet Tyagi dated

22.10.2020 and the Addendum Report was also submitted on 23.06.2021.

It is useful to notice the Addendum Report dated 23.06.2021 submitted by

Puneet Tyagi, where fair value of the Corporate Debtor has been found as

Rs. 798,32,19,714/- and liquidation value has been noticed as Rs.

557,14,44,655/-. The Addendum Letter dated 23.06.2021 has brought on

record by the Appellant as Annexure A-3, is as follows:

"To Mr. Manoj Kumar Agarwal, Resolution Professional M/s. D.S Kulkarni Developers Limited - Under CIRP Subject: Submission of Addendum Report Dear Sir, This letter bears the reference of my engagement as asset valuer in the matter of corporate insolvency resolution proceedings of M/s. D.S Kulkarni Developers Limited as per IBC - 2016. I am pleased to submit the addendum report to the initially submitted report on October 22, 2020, vide reference no.- PT112019/DSK/0143. Due to unavailability of land documents, the valuation of a property having Survey No. 125,

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 68 Hissa No. 1 to 4+8/56, Village- Dhayari, Taluka Haveli, Pune was not given.

1.1 Valuation of the Land component We are provided with the ownership documents in favour of M/s. D.S Kulkarni Developers Ltd. Hence, the same has been considered to derive the value.

In order to estimate the prevailing market rate of the subject property, market survey has been conducted amongst the real estate agent, brokers, property owners in vicinity of subject property which reveals that the plots are available for sale in the range of INR 40,000 to INR 50,000 per sqm for commercial plots depending upon the various factors like, locations, marketability, amenities, demand and supply of similar properties in the said locality. Considering all the factors that have bearing on the market value of a plot and other economic factors; we are of the opinion that the achievable capital value of underlying land component at the subject property as on date of valuation is Rs. 40,000 per sqm. The same is considered for the purpose of valuation. Thus, land valuation Area Market Rate Fair Value Liquidation (sqm) (INR/sqm) (INR) Value (INR) 2,240 40,000 8,96,00,000 7,16,80,000

1.2 Valuation of building component S. Particulars Total Age Fair Value Liquidation No. Area (INR) Value (INR) (sqm) 1 Parking Floor 192.94 14 18,29,000 13,72,000 2 Ground Floor 192.94 14 24,39,000 18,29,000 3 First Floor 192.94 14 24,39,000 18,29,000 4 Second Floor 192.94 14 24,39,000 18,29,000 772 91,46,000 68,59,000

I have incorporated the valuation of land and building development and the updated final summary can be read as follows:

S No. Properties Fair Value Liquidation (INR) Value (INR) 1 Property 01: 5,40,04,59,456 3,74,30,55,674 Dream City 2 Property 02: DSK 13,04,42,627 9,13,09,839 Nandanvan 3 Property 03: DSK 19,42,26,699 13,59,58,689 Mayurban 4 Property 04: DSK 7,51,85,214 5,26,29,650 Goldleaf

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 69 5 Property 05: Land 75,24,02,039 52,66,81,427 at Balewadi 6 Property 06: DSK 67,18,51,245 47,02,95,872 Anandghan 7 Property 07: DSK 9,99,46,000 7,88,83,200 Meghmalhar Flats 8 Property 08: DSK 48,04,91,434 33,63,44,004 Madhukosh 9 Property 09: Land 5,82,79,000 7,07,95,300 at Bavdhan 10 Property 11: DSK 2,11,90,000 1,69,52,000 Chandrdeep Flat 11 Property 12: Land 9,87,46,000 7,85,39,000 & Building in Survey No. 125, Hissa No. 1 to 4+8/56, Village-

Dhayari, Taluka-

Haveli, Pune Total 7,98,32,19,714 5,57,14,44,655 Total (Round 798 Cr 557 Cr Off)

Hope you will find everything in order; feel free to contact if you have any further query.

Best Regards Puneet Tyagi, Director, Dated: June 23,2021"

112. Another valuer Sh. Deepak Bansal who in its Report dated

06.10.2020 has noticed the fair value and liquidation value in following

manner:

"Resolution Professional Mr. Manoj Kumar Agarwal D S KULKARNI DEVELOPERS LTD REGD. OFFICE: 1187 /60 J M ROADSHIVAJINAGAR PUNE MH 411005 IN Date: 06/10/2020

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 70 Dear Sir, In accordance with our appointment letter dated 08st November 2019, we enclose our report on the fair & liquidation valuation of specified assets of D S KULKARNI DEVELOPERS LTD (or the "Company") as on 26th September 2019 ("Valuation Date") in accordance with regulation 27 and 35 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The Company has been put under corporate insolvency resolution process by National Company Law Tribunal ("NCLT") through order dated on 26th September 2019. Registered Valuer has been appointed to determine fair & liquidation value of the specified fixed assets of the Company on standalone basis in accordance with regulation 27 and 35 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. Based on the review and analysis of the information provided by the company as well as analysis of industry and macroeconomics trends as on valuation date, the estimated fair & liquidation value of the below specified assets of D S KULKARNI DEVELOPERS LTD is summarized as below:-

Particulars Book Value as Fair Value Liquidation Methodology Annexure on 26th (INR) Value (INR) September 2019 Land 15,98,92,91,000 6,67,96,12,798 4,75,69,16,181 Market Page 19 Approach Building 1,76,91,59,489 1,41,53,27,591 Market & Page 20 Cost Approach Total 15,98,92,91,000 8,44,87,72,287 6,17,22,43,772

The above Estimated Fair & Liquidation value is subject to the basis of valuation mentioned in main report and respective annexures.

Transactions Costs pertaining to the sale /purchase of the assets has not been considered while estimating the fair & liquidation value.

The valuation is not intended for general circulation or publication and is not be reproduced without our prior written consent, or used for any purpose other than for the purposes stated above and cannot be relied upon the third parties. We will not accept any responsibilities to any other party to whom the report may be shown or who may acquire a copy of this report."

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 71

113. Learned Counsel for the Appellant submitted that there are lot of

discrepancies in the Valuation Report submitted by above two valuers,

several properties which does not belong to the Corporate Debtor has been

valued whereas some properties which ought to have been valued has been

left out for the valuation. Learned Counsel has further submitted that there

is variance in the area of the assets taken by both the valuers.

114. Learned Counsel for the Appellant has referred to Notification dated

11.09.2014 issued by Urban Development Department Mantralaya,

Mumbai, under which in Schedule A, details of the land area notified for

Special Township Project of M/s. DS Kulkarni Developers Limited is

mentioned total is equivalent to 241.6 acres of land, whereas Mr. Puneet

Tyagi the first valuer has measured only 218.6 acres of land and another

valuer Mr. Deepak Bansal has measured only 233 acres thus there is a

glaring difference between taking correct area of the valuation.

115. The Valuation Report of Puneet Tyagi has been brought on record by

the Appellant itself as the Township Project has been referred to as Property

No. 1 and area 218.6 acres have been taken. The Report submitted by

valuer is a detailed Report containing the details as to how the valuers have

valued the assets, land, and building.

116. When we look into the valuation working submitted by valuer, it is

clear that in the description of asset value, Puneet Tyagi has taken total

land area of property as 233.27 acres, which according to Report as per the

PMLA order provided to the valuer. Page 82 of the Report is as follows:

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 72 "(a) CIVIL Properties:

Specific for Land (DSK Dreamcity -Village Pharsungi, Pune, Maharashtra) ▪ The physical inspection of land has been carried out on 30st January 2020.

▪ At the time of our site inspection, we were assisted by Mr. Pankaj (RP Team) ▪ The total land area of the property in the favor of D S KULKARNI DEVELOPERS LTD is 233.27 Acres as per the PMLA order provided to us and the same is considered in the valuation exercise.

▪ Description of the property -

▪ Location - DSK Dreamcity -Village Pharsungi , Pune, Maharashtra ▪ Latitude & Longitude - (18.483577,73.986875)- Waterfall (18.484127,73.992240)- Hi Bliss ▪Boundaries - North : Road South : Road East : DSK Centre West : DSK Land"

117. The above indicates that both the valuers have taken the same area

i.e., 233.27 acres, which was area provided to the valuers as per the PMLA

order. Valuers proceeded to take the area as per PMLA order in which we

do not find any infirmity. The above indicates that both the valuers

considered the same area for property at DSK Green City, Village Fursungi,

Pune.

118. One more submission advanced by the Appellant was that although

land admeasuring 89.66 acres i.e., land at Bavdhan was considered by first

valuer, but the second valuer has not valued the said parcel of land stating

that sale has been sold to the third-party. The Appellant further stated that

in the Bavdhan land, Corporate Debtor is having only 6.27 acres of land.

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 73

119. It is relevant to notice that the Valuation Report were shared by the

RP with the CoC and no Member of the CoC raised any question with regard

to Valuation Report and the CoC proceeded to examine the Resolution Plan

accordingly. Valuation Reports obtained by RP is for the benefit of the CoC

to examine the offers made in the Resolution Plan. It is also relevant to

notice that before the Adjudicating Authority at no point of time, any

objection was raised with regard to valuation conducted by two registered

valuers. The CIRP regulation provides for a mechanism for value of the

assets of the Corporate Debtor, which mechanism was followed by the RP.

The Valuation Report having not been objected by any Member of the CoC

and all proceeded to evaluate the Resolution Plan as per valuation, we at

the instance of the promoters of the Corporate Debtor are not inclined to

entertain objections raised regarding the Valuation Reports submitted by

the expert valuers.

120. Learned Counsel for the SRA has placed reliance on the Judgment of

the Hon'ble Supreme Court as well as this Tribunal to support his

submission that question of valuation cannot be allowed to be raised.

121. Counsel for the SRA has placed reliance on the Judgment of the

Hon'ble Supreme Court reported in (2024) 2 SCC 122 in the matter of

`Ramkrishna Forgings Ltd.' Vs. `Acil Ltd. (Resolution Professional)'.

In the above case, Adjudicating Authority on an application seeking

approval of the Resolution Plan directed the application to be kept in

abeyance and directed the official liquidator to carry out the revaluation of

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 74 the assets of the Corporate Debtor and provides the exact figures of value

of the assets and exact valuation, the facts have been noticed in Paragraph

1 of the Judgment, which is as follows:

"1. Heard the learned counsel for the parties. The present appeal under Section 62 [ "62. Appeal to Supreme Court.--

(1) Any person aggrieved by an order of the National Company Law Appellate Tribunal may file an appeal to the Supreme Court on a question of law arising out of such order under this Code within forty-five days from the date of receipt of such order.(2) The Supreme Court may, if it is satisfied that a person was prevented by sufficient cause from filing an appeal within forty-five days, allow the appeal to be filed within a further period not exceeding fifteen days."] of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as "the Code") is directed against the judgment dated 19-1-2022 (hereinafter referred to as "the impugned judgment") passed by the National Company Law Appellate Tribunal (hereinafter referred to as "Nclat") in Ramkrishna Forgings Ltd. v. ACIL Ltd. (Resolution Professional) [Ramkrishna Forgings Ltd. v. ACIL Ltd.

(Resolution Professional), 2022 SCC OnLine NCLAT 1151] which has upheld the order [IDBI Bank Ltd. v. ACIL Ltd., 2021 SCC OnLine NCLT 30896] passed by the adjudicating authority (National Company Law Tribunal [ The National Company Law Tribunal is a creature of Section 408 of the Companies Act, 2013. Under Section 60 of the Code, it has been designated as the adjudicating authority for corporate persons.] ) [hereinafter referred to as "the adjudicating authority -- NCLT" or "adjudicating authority" or "NCLT"], Principal Bench dated 1-9- 2021 [IDBI Bank Ltd. v. ACIL Ltd., 2021 SCC OnLine NCLT 30896] by which the application seeking approval of a resolution plan for ACIL Ltd. (hereinafter referred to as either "ACIL" or "the corporate debtor") being IA No. 1636 of 2019 in CP (IB) No. 170(PB)/2018 (hereinafter referred to as "the approval application") was kept in abeyance while directing the Official Liquidator (hereinafter referred to as "the OL") to carry out a revaluation of the assets of the corporate debtor and to provide exact figures/value of the assets and exact valuation details."

122. The order of this Tribunal affirming the order of Adjudicating

Authority was challenged before the Hon'ble Supreme Court, where Hon'ble

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 75 Supreme Court after noticing the contention of the parties noticed the

provision of Regulations 27 and 35 of the CIRP Regulations, 2016. The

Hon'ble Supreme Court laid down following in Paragraph 30:

"Analysis, reasoning and conclusion

30. Having considered the matter in depth, the Court is unable to uphold the decisions rendered by the adjudicating authority

-- NCLT as also Nclat. The moot question involved is the extent of the jurisdiction and powers of the adjudicating authority to go on the issue of revaluation in the background of the admitted and undisputed factual position that no objection was raised by any quarter with regard to any deficiency/irregularity, either by the RP or the appellant or the CoC, in finally approving the resolution plan which was sent to the adjudicating authority -- NCLT for approval. Further, the statutory requirement of the RP involving two approved valuers for giving reports apropos fair market value and liquidation value was duly complied with and the figures in both reports were not at great variance. Significantly, the same were then put up before the CoC, which is the decision-maker and in the driver's seat, so to say, of the corporate debtor."

123. Ultimately, the Hon'ble Supreme Court allowed the appeal, set aside

both the orders and directed the Adjudicating Authority to pass order on

the Plan approval application.

124. Learned Counsel for the Respondent also relied on the Judgment of

this Tribunal in Comp. App. (AT) Ins. No. 1633/2023, decided on

16.02.2024 in the matter of `CoC through its Representative, Jaga Ath

Kar' Vs. `Anil Tayal, Resolution Professional of Horzion Buildcon

Ltd.'. In the above case, the appeal was filed against an order of the

Adjudicating Authority by which the prayer made in I.A. for rejecting the

Valuation Report obtained by RP was considered. This Tribunal has noticed

the respective submissions of the parties and observed that the question of

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 76 valuation is sought to be raised after the approval of the Resolution Plan.

This Tribunal affirmed the order of the Adjudicating Authority, rejecting the

application seeking rejection of the Valuation Report. In Para 2 of the

Judgment facts pertaining to impugned order was noticed, which is as

follows:

"2. Heard learned counsel for the Appellant and learned counsel for the Resolution Professional. This Appeal has been filed against the order dated 25.07.2023 passed by the NCLT, New Delhi, Court-III in I.A. No.1993 of 2023. The Application was filed by the Appellant praying for following reliefs in I.A. No.1993 of 2023:

"a) Reject the valuation report obtained by the RP from its valuers and direct him to consider the valuation reports dated 21.12.2022 given by Mr. Anil Kumar Saxena and Ms. Aditi Aggarwal; or in the alternative;

b) Appoint a fresh valuer to ascertain a fair value and liquidation value of the assets of Group Housing Society Known as IRIDIA in the matter of M/s Horizon Buildcon Pvt. Ltd.;

c) Pass any other or further orders/directions as this Hon'ble Tribunal may deem fit and appropriate in the present circumstances of the matter and in the interest of justice."

125. This Tribunal, following Judgment of the Hon'ble Supreme Court in

`Ramkrishna Forgings Ltd.' (Supra), upheld the order of the Adjudicating

Authority in Paragraphs 8 and 9, are as follow:

"8. The learned Senior Counsel in this connection submitted that there was no occasion for NCLT to embark upon a totally alien procedure of getting the OL involved in such valuation, for which a mechanism is already provided under the Code and which, as per him, was strictly adhered to in the present case. It was contended that NCLT had limited power of judicial review given the supremacy of the CoC under the Code. At best, the learned Senior Counsel contended, that it could have disapproved the resolution plan on cogent ground(s) relevant for

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 77 doing so after testing whether it complies with the requirements of Section 30(2) of the Code, but it could not have acquired jurisdiction, where no such residuary or equity based jurisdiction is available under the Code by interfering with the CoC's decision without pointing out any non-conformity with the provisions of the Code and the Regulations thereunder.

9. For such proposition, Mr Divan relied upon the decision of this Court in Pratap Technocrats (P) Ltd. v. Reliance Infratel Ltd. (Monitoring Committee) [Pratap Technocrats (P) Ltd. v. Reliance Infratel Ltd. (Monitoring Committee), (2021) 10 SCC 623 : (2022) 1 SCC (Civ) 80] , the relevant being at paras 25, 26 and 44, wherein it has been held that the jurisdiction conferred upon the adjudicating authority -- NCLT in regard to the approval of a resolution plan is statutorily structured by sub-section (1) of Section 31 of the Code and such jurisdiction is limited to determine whether the requirements which are specified in sub-section (2) of Section 30 of the Code have been fulfilled. Further, it has been explained that such jurisdiction which is statutorily defined, recognised and conferred, cannot be equated with the jurisdiction in equity that operates independently of the provisions of the statute for the reason that the adjudicating authority -- NCLT, which is a body owing its existence to the Code, must abide by the nature and extent of its jurisdiction as defined therein. Regarding the appointment of the OL for getting valuation of the assets, the stand of Mr Divan was that it was not in line with the Code and the Regulations made thereunder."

126. The valuation of Corporate Debtor is conducted by registered valuers

as per the statutory requirement of the CIRP Regulations, 2016, valuers are

expert, who are entrusted the job of valuing the assets of the Corporate

Debtor. Valuation of assets is not an exact science which is a reason that

Reports are obtained from two registered valuers and in event, there are

difference of more than 10% only then the Report of third valuer is obtained.

Present is the case where there being no substantial difference into the

Valuation Reports, services of third valuer was not requisitioned. We are

also not unmindful of the fact that assets of the Corporate Debtor were

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 78 attached by the State of Maharashtra in MPID Act, 1999 and thereafter

Directorate of Enforcement under the PMLA Act, 2002, assets had already

been attached, which was an admitted fact. The RP has obtained all

relevant details of the assets from the investigating agencies as well as the

Directorate of Enforcement, which, in all documents pertaining to title

obtained from the agencies were given to the valuers, which was basis of

the valuers to proceed to value the land and building of the Corporate

Debtor. In the facts of present case, we are not inclined to interfere with the

Resolution Plan approved by the Adjudicating Authority on the ground of

valuation as contended by the Appellant.

127. Learned Counsel for the Appellant has contended that certain assets

which belong to the promoters of the Corporate Debtor has been included

in the Resolution Plan, which is a ground to set aside the Resolution Plan

because in the Resolution Plan properties of promoters cannot be included.

Learned Counsel for the Appellant has referred to Section 18(1)(f) of the

Code and submit that in the Resolution Plan, third-party assets cannot be

included. The assets which have been referred to in appeal are according

to the Appellant has been wrongly included are assets which have been

dealt in Paragraph 13.8 in the Resolution Plan as well as assets

admeasuring 89.35 acres situated at Village Bavdhan. In the brief synopsis,

in Paragraph XIII under the heading C, following has been pleaded:

"C.PERSONAL PROPERTIES OF THE PROMOTORS INCLUDED IN THE RESOLUTION PLAN:

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 79 xiii. It is a settled position of law that in terms of Section 18, 25 of the Code, the Resolution Professional and/or the Interim Resolution Professional ,as the case may be, can only take possession of the assets of the Corporate Debtor. However, the following clause of the Resolution Plan deals with the personal assets of the promotors. The relevant clauses of the same are being reproduced hereinunder: Clause 13.8:

"Mr. Shirish Kulkarni shall handover the 7.33 acres of land at Fursungi to the Corporate Debtor and execute and register a deed of conveyance in relation thereto in favour of the Corporate Debtor without any consideration as the lands were held by them in trust for the benefit of the Corporate Debtor and the approval of township including the lands are in the name of the Corporate Debtor"

3.2. Internal Page 172 of 118 at Para 11 Entry No. 10 in the table, which is reproduced hereinbelow provides as follows:

"All that piece and parcel of land admeasuring in the aggregate 89.35acres (i.e. 3,61,610 square meters) or thereabouts situate, lying and being at Village Bavdhan, Taluka Haveli and District Pune which includes but not limits the following survey numbers"

Sr. No. Survey No. 10 326/1

In addition to the same, various lands which do not belong to the corporate debtor have been included including a land admeasuring about 89.35 acres at Sl. No. 11 of the Resolution Plan. That hence, it is the submission of the Appellant that the said Resolution Plan is clearly in violation of applicable provisions of law. Accordingly, in the humble submission of the Appellant, the Impugned Order deserves to be set aside."

128. We have already noticed that Shirish Kulkarni, the son of the

Appellant has already filed Comp. App. (AT) (Ins.) No. 1142/2023,

questioning the Paragraph 13.8, where Shirish Kulkarni has been directed

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 80 to handover 7.33 acres of land at Fursungi and directed to execute the Deed

of Conveyance. Shirish Kulkarni having already filed an appeal challenging

the above Clause, we are of the view that it shall be appropriate to consider

the said issue in the appeal filed by Shirish Kulkarni i.e., Comp. App. (AT)

(Ins.) No. 1142/2023, hence the said ground need no consideration at this

stage. Similarly, with regard to land at Bavdhan, the Comp. App. (AT) (Ins.)

No. 1307/2023 by DS Kulkarni & Company, where the DS Kulkarni &

Company is claiming title to the land by virtue of two Sale Deeds executed

in the year 2002. The above ground thus also, need to be considered in the

appeal while considering the appeal filed by DS Kulkarni & Company,

hence, in the present appeal, the above grounds need no consideration.

129. The submission of learned Counsel for the Appellant is that Book

value of the assets of the Corporate Debtor was Rs. 1,906 crores, whereas

the fair value and liquidation value has been pegged at much lower value

by two valuers. We have noticed above that Book Value of the Corporate

Debtor was also noticed by the second valuer. Learned Counsel for the SRA

is right in his submission that the Book value has been looked into in

conjunction with the liabilities of the Corporate Debtor and mere Book

Value do not reflect the value of the Corporate Debtor.

130. Learned Counsel for the Appellant has also advanced submission

that RP had no access to the Corporate Office or the records of the

Corporate Debtor which are still under attachment, it has proceeded to

prepare Information Memorandum and obtain valuation and conduct the

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 81 CIRP, which proceeding cannot be said to be in accordance with the CIRP

Process. The facts of the present case indicates that there had been several

statutory investigations and attachments of the assets of the Corporate

Debtor, much before initiation of CIRP, assets and Bank Accounts of the

Corporate Debtor were already attached by the said authorities. The CIRP,

had to be conducted in accordance with the IBC and CIRP Regulations. RP

on basis of whatever record was available and could be obtained from

regulatory authorities and investigating authorities proceeded to the CIRP.

Attachment of assets and Office of the Corporate Debtor is the matter of

record.

131. Submission of the Appellant that assets were not available to be

considered in the Resolution Plan in view of the attachment by Directorate

of Enforcement has already been settled by Judgments of this Tribunal as

well as High Courts. Section 32-A of the IBC which was inserted in the IBC

giving overriding effect to all offences committed by Corporate Debtor prior

to initiation of CIRP, fully entitled the assets of the Corporate Debtor to be

dealt in the Resolution Plan.

132. In view of the forgoing discussions, we do not find any ground to

interfere with the order, approving the Resolution Plan on the ground

advanced by the Appellant.

133. Comp. App. (AT) (Ins.) No. 63/2024, deserved to be dismissed.

Comp. App. (AT) (Ins.) No. 1142/2023

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 82

134. The principal ground of challenge to the order of the Adjudicating

Authority approving the Resolution Plan in the present appeal is that

Resolution Plan has included the land which is owned by the Appellant and

the land which is owned by the Appellant cannot be dealt in the Resolution

Plan, nor the Appellant can be asked to convey in favour of the Corporate

Debtor/Resolution Applicant. In paragraph 7.2 of the appeal, details of land

and source of title of the Appellant has been pleaded, which paragraph 7.2

of the appeal is as follows:

"7.2. Property being land bearing numbers (i) Survey No. 46, Hissa No. 3 at Fursungi, (ii) Survey No. 53, Hissa No. 3B/2, (iii) Survey No. 36, Hissa No. I at Fursungi, (iv) Survey No. 47, Hissa No. IA, (v) Survey No. 48, Hissa No. I A and (vi) Survey No. 44, Hissa No. 7/1 at Fursungi were conveyed in favour of the Appellant.

Sl. No. Date of Property Description Conveyance a. 29.09.2009 Gift Deed as executed by Ms. Shilpa Makrand Kulkarni in favour of Mr. Shirish Deepak Kulkarni for land bearing Survey No. 46, Hissa No. 3 at Fursungi. b. 29.09.2009 Gift Deed as executed by Ms. Swarupa Makarand Kulkarni in favour of Mr. Shirish Deepak Kulkarni for land bearing Survey No. 53, Hissa No. 3B/2 and Land Bearing Survey No. 36, Hissa No. 1 at Fursungi. c. 29.09.2009 Gift Deed as executed by Ms. Sai Prakash Kulkarni (Sai Kedar Vanjape) in favour of Mr. Shirish Deepak Kulkarni for land bearing Survey No. 47, Land Bearing Survey No. 48, Hissa No. IA and Land Bearing Survey No. 44, Hissa No. 7/1 at Fursungi.

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 83 Copy of the Gift Deed dated 29.09.2009 executed by Ms. Shilpa Makrand Kulkarni in favour of Mr. Shirish Deepak Kulkarni for land bearing Survey No. 46, Hissa No. 3 at Fursungi is annexed herewith and marked as ANNEXURE "A-6". Copy of Gift Deed dated 29.09.2009 as executed by Ms. Swarupa Makarand Kulkarni in favour of Mr. Shirish Deepak Kulkarni for land bearing Survey No. 53, Hissa No. 3B/2 and Land Bearing Survey No. 36, Hissa No. l at Fursungi is annexed herewith and marked as ANNEXURE "A-7". Copy of Gift Deed as executed by Ms. Sai Prakash Kulkarni (Sai Kedar Vanjape) in favour of Mr. Shirish Deepak Kulkarni for land bearing Survey No. 47, Land Bearing Survey No. 48, Hissa No. lA and Land Bearing Survey No. 44, Hissa No. 7 /1 at Fursungi is annexed herewith and marked as ANNEXURE "A-8".

135. The land which is claimed by the gift deed by the Appellant is the

land situated at Village Fursungi, Pune. Appellant has claimed title to the

land by three Gift Deed dated 29.09.2009 executed by Ms. Shilpa

Makarand Kulkarni, Ms. Swarupa Makarand Kulkarni, Ms. Sai Prakash

Kulkarni.

136. All the aforesaid Survey Nos. being Survey No. 46 Hissa No. 3, Survey

No. 53 Hissa No. 3B/2, Survey No. 36 Hissa No. 1, Survey No. 47 & Survey

No. 48 Hissa No. 1A and Survey No. 44 Hissa No. 7/1 are the land of Village

Fursungi, which are included in the order dated 11.09.2014, issued by

Urban Development Department Mantralaya, Mumbai, by which, Special

Township Project has approved on 08.06.2011 by the Government

Notification. Special Township Project was approved as a Project of the

Corporate Debtor including the aforesaid all the Survey Nos. which are

claimed by the Appellant.

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 84

137. It is further relevant to notice that all the land of Fursungi which is

included in special Township Project have been attached by Directorate of

Enforcement which was subsequently confirmed on 05.08.2019. The copy

of the order dated 05.08.2019 has been brought on the record in the reply

filed by Respondent No. 2 to 4. The detailed order dated 05.08.2023, notice

the details of land attached by Directorate of Enforcement and other details

with regard to purchase of Fursungi land. We have noticed above that land

at Fursungi was purchased from the Agriculturist Farmers by close

relative/family members of the Deepak Kulkarni and later sold to the

Corporate Debtor.

138. As noticed above, the Gift Deed was executed in favour of the

Appellant by Ms. Shilpa Makrand Kulkarni, Ms. Swarupa, Makram

Kulkarni & Ms. Sai Prakash Kulkarni. In the order dated 05.08.2019,

details of land purchased at Fursungi by different family members from the

close relatives and family members, details of land and the date of purchase

of the land by different family members have been mentioned in the order

05.08.2019 of the PMLA. At page 633 under Table No. 4, details of land

purchased by Ms. Swarupa Makrand Kulkarni has been given, which is as

follows:

Purchase of Land by Swarupa Makarand Sale of the same Land By Swarupa Kulkarni (niece of Deepak S. Kulkarni) from Makarand Kulkarni to DSKDL Agriculturist Sr. Sale Date Total - Sr. Sale Date Total -

No. Deed Amount No. Deed Amount No. No. 1 6700 29-08-2007 6737500 - 1 1529 16/02/2008 94250000 -

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 85 2 6834 30-08-2007 7081250 - 2 3820 05-02-2008 38268750 - 3 6838 30-08-2007 9040625 - 3 3963 05-07-2008 5200000 - 4 9027 14-11-2007 5775000 - 4 7874 10-04-2007 26325000 - 5 9694 11-12-2007 7287500 - 5 8504 13/10/2008 15925000 - 6 9852 15-12-2007 5637500 - 6 5890 07-08-2008 43550000 - 7 6797 29-08-2007 11825000 - 7 6477 28/07/2008 26325000 - 8 6024 01-08-2007 3231250 - ___ _____ ____________ _________ - 9 6022 01-08-2007 8387500 - ___ _____ ____________ _________ - 10 6293 10-08-2007 11137500 - ___ _____ ____________ _________ - 11 1910 25/02/2008 14377500 - ___ _____ ____________ _________ - 12 2573 19/03/2008 9407500 - ___ _____ ____________ _________ - 13 6158 17/07/2008 14377500 - ___ _____ ____________ _________ -

___ _____ ____________ 114303125 - ___ _____ ____________ 24984375 -

139. Further at page 634 of the Reply, details of land purchased by Ms.

Shilpa Makrand Kulkarni and the date of purchase is mentioned, which is

as follows:

Purchase of Land by Shilpa Makarand Sale of the same Land By Shilpa Makarand Kulkarni (niece of Deepak S. Kulkarni) from Kulkarni to DSKDL Agriculturist Sr. Sale Date Total - Sr. Sale Date Total -

No. Deed Amount No. Deed Amount No. No. 1 6291 10-08-2007 28325000 - 1 1527 16/02/2008 66950000 - 2 8326 20-10-2007 17050000 - 2 1585 18-02-2008 86775000 - 3 66 02-01-2008 5500000 - 3 3739 29-04-2008 28140000 - 4 837 28-01-2008 14162500 - 4 3961 05-07-2008 4062500 - 5 6707 27-08-2007 11618750 - 5 5813 07-05-2008 23400000 - 6 3180 04-09-2008 2887500 - 6 6677 08-04-2008 8190000 - 7 3248 04-09-2008 1375000 - 7 9633 28/11/2008 64400000 - 8 3246 04-09-2008 8087500 - 8 5892 07-08-2008 39487500 - 9 5062 06-12-2008 4252500 - 9 6401 24/07/2008 9100000 - 10 2804 28/03/2008 33575000 - ___ _____ ____________ __________ - 11 2852 29/03/2008 412500 - ___ _____ ____________ __________ - 12 1706 20/02/2008 12602500 - ___ _____ ____________ __________ - 13 2229 03-10-2008 4437500 - ___ _____ ____________ __________ - 14 2231 03-10-2008 4526250 - ___ _____ ____________ __________ - 15 5512 26/06/2008 4970000 - ___ _____ ____________ __________ - ___ _____ ____________ 15378250 - ___ _____ ____________ 330505000 -

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 86

140. The land purchase by Kedar Vanjape (Sai Prakash Kulkarni) are at

Table No. 6, which is as follows:

Purchase of Land by SaekedarVanjape Sale of the same Land By (niece of Deepak S. Kulkarni) from SaekedarVanjape to DSKDL Agriculturist Sr. Sale Date Total - Sr. Sale Date Total -

No. Deed Amount No. Deed Amount No. No. 1 5728 21-07-2007 8250000 - 1 2235 13-10-2008 28275000 - 2 6682 24-08-2007 2337500 - 2 3737 29/04/2008 19880000 - 3 6684 24-08-2007 2337500 - 3 3818 05-02-2008 20800000 - 4 7143 10-09-2007 8800000 - 4 4576 28/05/2008 96850000 - 5 7359 17-09-2007 3712500 - 5 5766 07-04-2008 15000000 - 6 8289 19-10-2007 17393750 - 6 7418 18/09/2007 70037500 - 7 8046 11-10-2007 38981250 - 7 8344 22/10/2008 47450000 - 8 5967 31-07-2007 17531250 - 8 _____ ____________ _________ - 9 5965 31-07-2007 3300000 - 9 _____ ____________ _________ - 10 5372 10-07-2007 4400000 - ___ _____ ____________ _________ - 11 5370 10-07-2007 4400000 - ___ _____ ____________ _________ - 12 1583 18-02-2008 7100000 - ___ _____ ____________ _________ - 13 3235 04-10-2008 6500000 - ___ _____ ____________ 298292500 - 14 _____ ____________ 125043750 - ___ _____ ____________ ___________ -

141. The order dated 05.08.2019, further notices that the amount for

purchase of the land by family members of the Deepak Kulkarni were from

the Corporate Debtor/sister companies of the Corporate Debtor. The order

dated 05.08.2019 has tabulated the fund source to both relative/family

members of the Deepak Kulkarni for purchase of Fursungi land,

mentioning the details amounts for purchase of the land and amount

financed by different entities, which table include Swarupa Makrand

Kulkarni, Shilpa Makrand Kulkarni and Sai Prakash Kulkarni (Sai Kedar

Vanjape), which is at Page 653, 654 and 655:

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 87 Fund source to close relatives/family members of Deepak S. Kulkarni to purchase the Fursungi land Sr. Purchase of Relation Total Financer Amt (in Rs.) No Fursungi with D S payment in . land from Kulkarni purchase of agriculturist the property s Amt (in Rs) 1 Ashwani Daughte 13,03,38,76 DSKDL 9,27,07,369 Sanjay r 8 DSK Motors 1,16,90,000 Deshpande Pvt Ltd DS Kulkarni 2,26,07,425 and Company Hemanti 30,90,530 Kulkarni Ambiance 2,43,444 Total 13,03,38,76 8 2 Swarupa Niece 11,43,03,12 DSKDL 7,00,11,980 Kulkarni 5 Saptashrungi 73,82,500 Oil Mills Pvt Ltd DSK Motors 53,91,563 Pvt Ltd GrowrichAgro 55,24,875 Forestry Pvt Ltd Skylap 36,83,250 Marketing Pvt Ltd D S Kulkarni 47,03,750 & Associates D S Kulkarni 97,70,000 & Company Hemanti 82,35,207 Kulkarni Total 11,43,03,12 5 3 Shilpa Niece 15,25,05,46 DSKDL 8,71,56,516 Makrand 9 Skylap 1,33,33,125 Kulkarni Marketing Pvt Ltd

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 88 Saptashrungi 59,15,000 Oil Mills Pvt Ltd D S Kulkarni 50,41,985 Const Pvt Ltd DSK 22,50,703 WorldmanProj . Pvt Ltd D S Kulkarni 44,99,203 & Associates D S Kulkarni 3,28,99,437 & Company Hemanti D 14,09,500 Kulkarni Total 15,25,05,46 9 4 Jyoti Deepak Wife 4,46,87,000 DSK Motors 21,50,000 Kulkarni Pvt Ltd (dead) DSKDL 3,37,45,000 Ambiance 32,48,750 Ventures Estates & Dev Pvt Ltd Saptashrungi 2,70,000 Oil Mills Pvt Ltd D S Kulkarni 52,73,250 & Company Total 4,46,87,000 5 Hemanti D Wife 47,43,750 DSKDL 10,93,750 Kulkarni Saptashrungi 12,25,000 Oil Mills Pvt Ltd D S Kulkarni 24,25,000 and Company Total 47,43,750 6 Makarand Brother 4,87,25,000 DSKDL 3,88,54,000 Kulkarni D S Kulkarni 29,07,000 & Associates D S Kulkarni 69,64,000 & Company Total 4,87,25,000

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 89 7 Shirish Son 9,11,63,375 DSKDL 5,93,39,777 Deepak DSK Motors 18,12,500 Kulkarni Pvt Ltd Ambiance 1,17,66,124 Venture Estates & Dev Pvt Ltd Saptashrungi 1,17,66,124 Oil Mills Pvt Ltd D S Kulkarni 64,78,850 & Company Total 9,11,63,375 8 SAI Vanjape Niece 12,50,43,75 DSKDL 6,91,34,063 0 DSK Motors 48,86,500 Pvt Ltd Saptashrungi 23,80,000 Oil Mills Pvt Ltd D S Kulkarni 4,21,43,187 & Company D S Kulkarni 65,00,000 Const. Pvt Ltd Total 12,50,43,75 0

142. The plot of land which was purchased by Agriculturists, utilising the

funds of sister companies of the Corporate Debtor, as noted above clearly

indicate that land purchased by family members of the Deepak Kulkarni

were not out of their own source and the consideration flow from the

Corporate Debtor and its sister companies. When the agriculture land

which was purchased by above family members who have gifted the same

to the Appellant, the land really did not belong to family members i.e.,

Shilpa Makrand Kulkarni, Swarupa Makrand Kulkarni, Sai Prakash

Kulkarni (Sai Kedar Vanjape), who facilitated the transfer of land from the

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 90 Agriculturists, utilising the consideration which was routed through

different sister companies of the Corporate Debtor. When Shilpa Makrand

Kulkarni, Swarupa Makrand Kulkarni and Sai Prakash Kulkarni (Sai Kedar

Vanjape) were not the real owners of the Fursungi land which was

purchased from Agriculturists, we are of the clear opinion that name of

Appellant in whose favour the Gift Deed was executed on 29.09.2009 was

only for namesake, and Appellant held the land as a son of Deepak

Sakharam for the benefit of the Corporate Debtor, since utilising the funds

from Corporate Debtor and its sister company, the entire land was

purchased from Agriculturist in the name of relatives.

143. Appellant is aggrieved by Clause 13.8 of the Resolution Plan under

the heading "Related Party Transactions", provides as follows:

"13.8. Mr. Shirish Kulkarni shall handover the 7.33 acres of land to the Corporate Debtor and execute and register a deed of conveyance in relation thereto in favour of the Corporate Debtor without any consideration as the lands were held by him in trust for the benefit of the Corporate Debtor and the approval of the township including the lands are in the name of the Corporate Debtor."

144. As noted above, the land which is in the name of Appellant is also

part of the integrated Township Project, which Project was got approved by

the Corporate Debtor from State of Maharashtra. There is no dispute that

integrated Township Project belongs to the Corporate Debtor, which is part

of the assets of the Corporate Debtor and we do not find any flaw in

Resolution Plan dealing with the entire land of integrated Township Project,

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 91 which also consists of above 7.33 acres of land, which is in the name of the

Appellant.

145. As noted above, the land was purchased from the consideration of

the Corporate Debtor and its sister companies. Taking overall facts and

circumstances into consideration, we are not persuaded to accept the

submission of the Appellant that the land 7.33 acres of land situated at

Fursungi, Pune be deleted from the Resolution Plan. We thus are satisfied

that no error has been committed in dealing the aforesaid land 7.33 acres

in the Resolution Plan and no exception can be taken by the Appellant to

the Clause 13.8 in the facts of the present case as noted above.

146. We thus do not find any ground as urged by the Appellant to interfere

with the order of the Adjudicating Authority approving the Resolution Plan.

The appeal filed by Shirish Kulkarni deserves to be dismissed.

Company Appeal (AT) (Insolvency) No. 1308 of 2023 - DSK Global Education and Research Private Limited

147. The Appellant challenges Clauses of the Resolution Plan under which

the rights of the Appellant has been extinguished with respect to the

buildings erected on the lease land by the Lessee.

148. For appreciating the submission, we need to notice certain terms and

conditions of the Lease Deed as well as the pleadings of the parties.

149. The Lease Deed was executed by the Corporate Debtor on 24.09.2008

in favour of the Appellant for Survey No.53, 54, 55 and 56 with respective

Hissa numbers totalling to 19 acres. The Lease Deed was registered,

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 92 containing lease land of 19 acres, i.e. about 76,000 sq. mtrs. It is useful to

notice Clauses (a) to (f) of the Lease Deed, which are as follows:

"(a) The Lessor is seized and possessed of or otherwise well sufficiently entitled to the portions of land/s situate at S.Nos.

53, 54, 55 & 56, Village Fursungi, Tal, Haveli, Dist. Pune particularly described in the Schedule 1, 2, 3 and 4 hereunder written and hereinafter referred to as the said Lands.

(b) The Lessor has purchased the said lands through various Sale Deeds from Previous Owners/ Agriculturist of which details as given in separate Annexure.

(c) The Lessor has purchased the said lands adm. About 109543 Are (i.e. 27.33 acres) equivalent to 109543 Sq. mtrs. And Lessor is in possession of the said lands.

(d) The Lessee is a company Reg. Under Companies Act, 1956 and it is desirous to commenced a school for Professional courses for Animation and Industrial Design etc. under Name and style "DSK International Institute of Animation, Gaming and Industrial design"

(e) The Lessee has approached the Lessor with a request to grant a long lease of the land/s admn. About 19 Acres i.e. 760 Are. (about 76000 Sq. mtrs.) out of above said lands more particularly described in Schedule 1, 2, 3 and 4 with view to construct a building/s or other structure thereon consisting of College Building/s, Hostel/s for student and other related structures/ buildings to run a school/ college for above mentioned purpose.

(f) The Lessor has agreed to demise to the Lessee the said land together with the right to construct building/s and structure/s standing thereon for the period of 99 years and at the rent and upon the terms and conditions recorded therein."

150. The lease was granted on payment of yearly rent of Rs.1 crore. The

above terms and conditions are contained in Clause-1, which is as follows:

"1. In consideration of the rent hereby reserved and of the terms and conditions, covenants and Agreements herein contained and on the part of the Lessee to be observed and performed the Lessor doth hereby demise Unto the Lessee ALL

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 93 THAT said piece of land/s situate at S.Nos. 53,54,55 & 56 (off Pune Solapur Highway) at Village Fursungi, Tal. Haveli Dist. Pune particularly described in the Schedule 1,2, 3 & 4 (hereafter for brevity's sake referred to as "the demised land/s") hereunder written together with the right to construct structure/s and building/s thereon and shown in blue wash delineated by red coloured boundary line on the plan thereof hereto annexed TO HOLD the demised land unto Lessee and it's administrators and assigns for the term of 99 years commencing from the 1st day of July, 2008 for the term of 99 years ( Ninety-Nine years) yielding and paying the yearly rent of Rs. 1, 0 ,00,000/- (Rupees One Crore only), and which rent shall be payable by the Lessee to the Lessor on or before 10th day of every quarter in advance. First quarter will commence from 1st July, 2008 to 30th September 2008. In addition to above rent the Lessee agree to deposit with Lessor Rs.25,00,000/- (Rs. Twenty Five Lacs Only) as a deposit."

151. The lease further granted right to the Lessee to construct building

upon demised land, a new building for its requirements of School, Hostels,

other buildings etc. Clause 2, sub-clause (c) of the Lease Deed is as follows:

"(c) That, the Lessee shall at it's own efforts, expense and cost be entitled to construct and complete upon the demised land, a new building or buildings for its requirements of School Hostels, other buildings etc. with all requisite and proper sewers, drains and other conveniences thereto in accordance with prevailing law. That Lessee will construct internal roads and shall also construct compound wall to demised the land to protect it's boundaries."

152. The most important Clause, which is relevant for deciding the issues

raised in the Appeal are Clause-3, which is as follows:

"3. PROVIDED ALWAYS AND IT IS AGREED and declared that if the rent hereby reserved or any part thereof shall be in arrears, for the space of 180 days after the same shall have become due whether the same shall have been legally or formally demanded or not or if and whenever there shall be a breach or non-performance or non-observance by the Lessee of any of the Covenants, conditions or agreements herein contained, it shall be lawful for the Lessor to re-enter upon the demised premises or any part thereof in the name of the whole

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 94 and immediately thereupon this demise and all rights of the Lessee hereunder shall stand absolutely determined but without prejudice to any right or remedy of the Lessor already accrued and then subsisting PROVIDED HOWEVER before making such re-entry in respect of any breach of covenant, notice in writing shall have been given to the Lessee intimating the breach of covenant. If the Lessee fails to make good such breach within Three months of the date of service of such notice, the Lessor shall be entitled to re-enter upon the demised premises or any part thereof in the name of the whole and thereafter the Lease shall stand determined provided always that such re-entry shall be without prejudice to any right of action or remedy of the Lessor in respect of any antecedent breach of any of the covenants on the part of the Lessee. The term for payment of interest on the arrears of rent shall not prejudice or affect the right of re-entry herein contained. And in this event Lessor shall be liable to pay to the Lessee cost of construction incurred by the Lessee for constructing buildings/ structure etc. on the said demised premises."

153. Under Clause 6, the Lessee was entitled to mortgage of the demised

land/ proposed buildings in favour of Financial Institutions/ Banks for

obtaining finance/ loans for construction of building/s, structure/s etc.

The Lessee entered into the possession of land and was been paying the

yearly rent payable on each quarter till 2013.

154. The lease specifically empowered the Lessor to re-enter on the breach

of Covenants, after giving notice in writing, under which Lessee is to make

good such breach, failing which Lessor shall be entitled to re-enter.

155. The pleadings on record indicate that lease was never terminated by

the Corporate Debtor, either before commencement of the CIRP on

26.09.2019 or subsequent to commencement of the CIRP. The Lessee has

constructed the building on the said premises. For construction of building

on the premises, the Appellant has obtained financial assistance from

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 95 Central Bank of India of Rs.100 crores and Rs.20 lacs in the year 2008.

The Appellant's case is that it made construction of several buildings and

apart from running various educational facilities, it established a University

under DSK World University Act, 2017 and the Appellant claims to have

running a University with effect from 05.05.2017 of an international repute.

156. It is also on the record that for the Central Bank of India, charge was

created separately for the land as well as the building.

157. The case of the RP as appears from the records, indicate that the

Appellant has made payment of rental only till March 2013 and since April

2013, the Appellant was in default in payment of lease rent and till

September 2023, lease rental along with interest is Rs.17,24,17,808/-. The

above pleadings have been made in reply filed by the RP in the present

Appeal. It is relevant to notice that RP, although has pleaded that RP was

entitled to terminate the Lease Deed and re-enter and take possession of

all the property, but reply does not plead that at any point of time, the Lease

Deed was terminated by the RP. It is useful to extract paragraph 17 of the

reply of the RP, which is as follows:

"17. I submit that the Respondent No.1 in course of his duties as envisaged under Section 25 of the Code, exercised the power of preserving and protecting the assets of the Corporate Debtor, including the continued business operations of the Corporate Debtor. Therefore, I say that Respondent No.1 is entitled to take custody and control of all the assets of the Corporate Debtor, including the said Property as the same was owned by the Corporate Debtor and due to continued default in payment of rental amounts by the Appellant since April 2013, the Respondent No.1 is further entitled to terminate the said Lease Deed and

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 96 re-enter and take rightful possession of the said Property."

158. Respondent No.2, SRA has also filed reply in this Appeal, wherein an

affidavit of RP filed before the Adjudicating Authority dated 15.03.2022 in

IA No.1745 of 2021 filed by the Central Bank of India, has been brought on

the record by Respondent No.2 to 4, along with RP's reply as Annexure-18,

which has been relied by the learned Counsel for the Appellant. The RP in

its affidavit filed in support of reply, has made various pleadings in

paragraphs 3, 4, 5, 6, 7 and 8 of the reply. It is useful to extract paragraph

3, 4, 5, 6, 7 and 8 of the reply, which are as follows:

"3. At the outset I hereby briefly set factual background relating to the claim made by the Applicant:

a. A land parcel situated at Fursungi having survey Nos.53 to 56 ("said Land") was leased by the Corporate Debtor to one DSK Global Education and Research Private Limited ("DSK Global") by way of a lease deed dated September 25, 2008 for a period of 99 years, starting from July 1, 2008 (Lease Deed"). Under the Lease Deed, DSK Global was required to pay the Corporate Debtor a yearly rent of 1,00,00,000/-.

b. DSK Global constructed a college building on the said leased parcels of land. The said college was functional till around the year 2017 and has been vacant and non-operational thereafter. The building however continues to stand on the said Land.

c. Clause 3 of the Lease Deed, which has also been quoted by the Applicant in their present application on pages 5 and 6 of the Application under reply, makes the following provision in the event of termination of the Lease Deed for breach thereof by the Lessee:

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 97 "....If the Lessee fails to make good such breach within Three months of the date of service of such notice, the Lessor shall be entitled to re-enter upon the demised premises... And in this event Lessor shall be liable to pay to the Lessee cost of construction incurred by the Lessee for constructing buildings/structure, etc. on the said premises..."

(...Emphasis supplied) d. Thus, if the Corporate Debtor wishes to terminate the Lease Deed with DSK Global, the Corporate Debtor would be required to pay DSK Global the cost of construction of the building standing thereon.

4. I say that from the above arrangement, it is clear that while the said Land is the property of the Corporate Debtor, the building constructed by DSK Global continues to be the latter's property. In fact, the Applicant has also admitted that the Land and the building thereon have been separately charged to them.

5. I say that the Applicant had insisted on my placing security guards at the said Land to guard it. However, this action would constitute repossession of a leased land, and would require the RP to issue of letter terminating the Lease Deed. I say that if I were to terminate the lease, the said DSK Global would be entitled to receive the cost of construction of the building thereon as per clause 3 of the Lease Deed abovementioned. I say that this amount would have been an additional expense incurred during an ongoing CIRP, and would require the approval of the COC.

6. I say that the Applicant is also aware that the said Land and building thereon have been seized and possessed by the state authorities pursuant to an Order of the MPID Court at Pune. The Applicant has already been made aware of the various proceedings initiated by me before the MPID Court, and a separate proceedings under Section 18(1)(f) of the IBC before this Hon'ble Tribunal for seeking a handover of possession of all properties of the Corporate Debtor

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 98 which are in the possession of the authorities further to the MPID proceedings.

7. It is denied that the said Land was not included in the list of assets of the Corporate Debtor. While the Applicant appears to rely on discussions held at the COC meeting on April 19, 2021, which is annexed as Exhibit G to the present Application. Reference may be made to page 5 of the said Minutes where the stated discussion is recorded. On a bare perusal of the same, it is clear that there was no discussion of the said Land being excluded from the list of the Corporate Debtor's assets. The discussion was simply about the feasibility of deploying security guards at the said Land.

8. I say that the Applicant had raised the issue of the said Land being excluded from the list of assets of the Corporate Debtor in its email dated April 20, 2021, to which I responded on April 22, 2021. In my response, I had specifically clarified that the said Land in question had been included in the list of assets of the Corporate Debtor. However, that as per the Lease Deed the Corporate Debtor cannot re-possess the said Land without paying for the cost of construction of the building thereon. A copy of this letter dated April 22, 2021 is annexed hereto and marked as Exhibit C."

159. The above affidavit of RP clearly states that in event Corporate Debtor

wishes to terminate the Lease Deed, the Corporate Debtor would be

required to pay the Appellant, cost of construction of the building standing

thereon, which have been an additional expense during the ongoing CIRP.

Hence, the RP has not terminated the Lease Deed. The RP in paragraph 3

has also extracted Clause 3 of the Lease Deed, which contemplates

payment to Lessee the cost of construction incurred by the Lessee in event

the Lessor decides to re-enter upon the demised premises, after giving three

months' notice to the Lessee. The RP has also stated that land, which is

the subject matter of the lease is the assets of the Corporate Debtor,

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 99 whereas the building constructed by the DSK Global is the property of the

Appellant.

160. Now, we come to the relevant Clauses of the Resolution Plan, which

are questioned by the Appellant. In the Resolution Plan in Schedule-3,

'Extinguishment of claims/ entitlements', paragraph-13, deals with 'Related

Party Transactions'. The Clauses of Resolution Plan 13.3, 13.4, 13.5 and

13.6, which are relevant for the present case, are as follows:

"13.3. All unfulfilled obligation of the Corporate Debtor to all related parties and also to DSK Global Education and Research Limited come to an end save and except the obligations of the Corporate Debtor in the Development Agreement dated 31 December, 2013 as detailed in Clause 13.7 hereinbelow;

13.4. The Lease Deed dated 24th September, 2008 executed between the Corporate Debtor and DSK Global Education and Research Limited and registered with the office of Sub-Registrar of Assurances under serial no. HVL-15-6440 of 2008 in respect of a portion of the Fursungi Property stands cancelled/terminated; 13.5. All rights of DSK Global Education and Research Limited under the Lease Deed dated 24th September, 2008 come to an end; and all the obligation of the Corporate Debtor towards DSK Global Education and Research Limited in terms of the Lease Deed dated 24th September, 2008 in respect of the Fursungi Property come to an end with no cost or claim recoverable against the Corporate Debtor arising from or through such Lease Deed dated 24th September, 2008;

13.6. Any structure standing on the land owned by Corporate Debtor but constructed by DSK Global Education and Research Limited shall be demolished, put for reuse, taken possession of by the Corporate Debtor against the PUFE transactions and dues paid for and on behalf of DSK Global Education and Research Limited and also against recovery of dues of

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 100 the Corporate Debtor from DSK Global Education and Research Limited. This relief is important as unjust enrichment of due process should not be allowed for related firms through PUFE transactions; and"

161. The question to be answered in the Appeal is as to whether by the

aforesaid Clauses of the Resolution Plan submitted by the SRA, the rights

of the Appellant in the Lease Deed, can be cancelled/ terminated without

terminating the Lease Agreement, as per the Clauses of the Lease Deeds.

162. As we have already noticed above, the RP has categorically pleaded

before the Adjudicating Authority that termination of Lease Deed has not

been done by the RP because, in case of termination, the Corporate Debtor

was liable to pay the cost of construction, which would have burdened

additional cost in the CIRP. When the Lease Deed has not been terminated

by the RP, whether the SRA by the Clauses as indicated above could have

terminated the Lease Deed, denying the consequence of Clauses of the

Lease Deed as contemplated therein. The Appellant's case is that the

Appellant has spent more than Rs.262 crores for construction of the

building and in paragraph 2.6, it has stated the amount, which also include

the loan amount of Rs.100 crores from Central Bank of India. It is useful

to extract paragraph 2.6 of the synopsis given in the Appeal, which is to the

following effect:

"2.6. The Appellant had thus relying on the said rights created in favour of the Appellant especially the long tenure of the lease terms, proceeded to build infrastructure at the Said Property by investing an amount of around INR 263,38,46,334/-(including the loan amount).

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 101 2.6.1. DSK International Campus, Pune was set up in 2008 through a partnership agreement with Chamber of Commerce & Industry Grand Hainaut and the Appellant comprising of an Animation, Video Game & Industrial Design Institute with state of the art facilities. DSK International Campus were governed by the French CNCP Level 1 certification. Students had opportunity to conduct a part of their curriculum m France and could seek internship world over.

2.6.2. To take things to the next level, the DSK World Education Council was incorporated under the Companies Act, 2013 on 02.02.2015 by the Appellant and on 15.02.2016, an attestation was issued by RUBIKA in respect of certification from the French certification authority of the courses being taught at the Appellant's institute. All the concerted efforts of the Appellant led to the promulgation of DSK World University Act, 2017 and came into effect on 05.05.2017. Thus, the Appellant and was running a university registered with the Government of Maharashtra of international repute wherein it had exchange programs with foreign governments like France, etc. 2.6.3. DSK World University had a wide variety of courses it offered including, Animation, Industrial Design, Gaming and Fashion Design/ Technology, with a cumulative annual student intake of 540 students. The DSK World University was aimed at providing students with high quality learning, which extended beyond the theoretical domain, by providing the students with state of the art machinery and equipments to practically master their learnings. The university was housed with an Industrial Design Laboratory, an Animation Laboratory, a Video Game Laboratory, a Fashion Design Laboratory, along with numerous other facilities, including on campus student and staff housing. The faculty at the University consisted of various global professionals and experts in Gaming, Animation, Industrial Design, etc. with decades of experience."

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 102

163. The learned Counsel for the Appellant submits that assets of the

third party, including the assets of the subsidiaries/ related entities of

Corporate Debtor, cannot be made subject matter of the Resolution Plan.

The learned Counsel placed reliance on Section 18(1)(f) and (g) and

Explanation, which is as follows:

"18. Duties of interim resolution professional. -

(1)(f) take control and custody of any asset over which the corporate debtor has ownership rights as recorded in the balance sheet of the corporate debtor, or with information utility or the depository of securities or any other registry that records the ownership of assets including -

(i) assets over which the corporate debtor has ownership rights which may be located in a foreign country;

(ii) assets that may or may not be in possession of the corporate debtor;

(iii) tangible assets, whether movable or immovable; (iv) intangible assets including intellectual property; (v) securities including shares held in any

subsidiary of the corporate debtor, financial instruments, insurance policies;

(vi) assets subject to the determination of ownership by a court or authority;

(g) to perform such other duties as may be specified by the Board.

Explanation. - For the purposes of this [section, the term "assets" shall not include the following, namely: -

(a) assets owned by a third party in possession of the corporate debtor held under trust or under contractual arrangements including bailment;

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 103

(b) assets of any Indian or foreign subsidiary of the corporate debtor; and

(c) such other assets as may be notified by the Central Government in consultation with any financial sector regulator."

164. The learned Counsel for the Appellant, in support of his submission

has relied on various judgments of this Tribunal as well as Hon'ble

Supreme Court, which need to be noticed.

165. The learned Counsel for the Appellant has relied on the judgment of

the Hon'ble Supreme Court in Dr. K.A. Dhairyawan and Ors. vs. J.R.

Thakur and Ors. - AIR 1958 SC 789. In the above judgment, the Hon'ble

Supreme Court had occasion to consider the rights of building erected on

the leased land and as to whether the building shall go with the owner of

the land. The Hon'ble Supreme Court, after considering the Clauses of the

Lease, came to the conclusion that Lease Deed did not transfer the

ownership in the building to the Lessor while the lease subsisted. In

paragraphs 6 and 7, the Hon'ble Supreme Court has laid down following:

"6. We have examined the various clauses of the lease and find that in none of them has it been positively stated that the building to be erected on the demised land would be in the ownership of the lessors and that the building would be deemed to have been leased to the lessees along with the demised land. Under the law there was no impediment in the way of the parties to have had a clause, in a positive form, to that effect. In the absence of such a clause the various clauses of the lease, as they exist, will have to be construed in order to ascertain whether on a proper construction thereof it can be said that there had also been a, demise of the building. The Schedule to the lease, as already stated, specifically mentions that the land had been demised and there is no mention therein

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 104 that the building when constructed thereon would also form part of the demised property. In 1927 when the lease was executed the Act was not in existence and it may reasonably be said that none of the parties had ever in contemplation that the Act or anything akin thereto would become law in the future affecting the rights of the parties under the lease. The various clauses of the lease are consistent with the ownership in the building being with the lessees in which the lessors had no right while the lease subsisted. In the case of Narayan Das Khettry v. Jatindra Nath Boy Chowdhury(1) the Privy Council approved the observations of Sir Barnes Peacock in the case of Thakoor Chunder Poramanick v. Ramdhone Bhuttacharjee to the following effect:

"We have not been able to find in the laws or customs of this country any traces of the existence of all absolute rule of law that whatever is affixed or built on the soil becomes a part of it, and is subjected to the same rights of property as the soil itself." In the case of Vallabhdas Naranji v. Development Office,),, Bandra (3) the Privy Council once again referred to Sir Barnes Peacock's observation as stated above. The Privy Council also quoted the following observation of Couch, C. J., in the case of Narayan v. Bholagir (4):........... We cannot, however, apply to cases arising in India the doctrine of the English law as to buildings, viz., that they should belong to the owner of the land. The only doctrine which we can apply is the doctrine established in India that the party so building on another's land should be allowed to remove the materials."

7. Normally, under Section 108 of the Transfer of Property Act, before the expiry of the lease, a lessee can remove all structures and buildings erected by him on the demised land. All that was necessary for him to do was to give back the land to the lessor, on the termination of the lease, in the same condition as he found it. The ownership, therefore, of the building in this case was not with the lessors but was with the lessees. Under Section. 108 of the Transfer of Property Act there was nothing to prevent the lessees contracting to hand over any building or structure

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 105 erected on the land by them to the lessors without receiving any compensation. In other words, although under Section 108 the lessees had the right to remove the building, by the contract they had agreed to hand over the same to the lessors without the right to receive compensation at the end of the lease, the matter being entirely one of contract between the parties. Such a contract, however, did not transfer the ownership in the building to the lessors while the lease subsisted."

166. The learned Counsel for the Appellant has then relied on the

judgment of the Hon'ble Supreme Court in Jaypee Kensington Boulevard

Apartments Welfare Association and Ors. vs. NBCC (India) Ltd. & Ors.

- (2022) 1 SCC 401. In the above case, in the CIRP of Jaypee Infratech

Ltd. ("JIL") an amount of Rs.750 crores was deposited by holding Company,

i.e., Jaiprakash Associated Ltd. ("JAL"). The Resolution Plan dealt with the

said amount of the holding Company and released the amount, which was

the subject matter of challenge by JAL. It was contended on behalf of the

JAL that assets of holding Company cannot be part of the Resolution Plan.

In the context of the above controversy, regarding the assets of holding

Company, the Hon'ble Supreme Court had occasion to consider the

submissions advanced and held that property of holding Company, cannot

be dealt in the Resolution Plan. The submissions were noticed in paragraph

230.1.1, which is as follows:

"230.1.1. It has been forcefully contended that the assets belonging to a third party cannot be utilised towards the resolution of insolvency of a corporate debtor, as held by this Court in Embassy Property [Embassy Property Developments (P) Ltd. v. State of Karnataka, (2020) 13 SCC 308] . The decision in Anuj Jain [Jaypee Infratech Ltd. v. Axis

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 106 Bank Ltd., (2020) 8 SCC 401 : (2021) 2 SCC (Civ) 334] has also been referred to submit that therein too, this Court disallowed JIL's assets from being utilised for securing the dues owed by JAL."

167. The Hon'ble Supreme Court after considering the submissions of the

parties, in paragraph 240, 241 and 241 laid down following:

"240. We may observe that the decisions cited by the parties do not require much discussion. The principles in the cited decisions including those in Embassy Property [Embassy Property Developments (P) Ltd. v. State of Karnataka, (2020) 13 SCC 308] that the assets belonging to a third party cannot be utilised towards resolution of a corporate debtor remain fundamental and beyond cavil. Equally, the reference to the maxim actus curiae neminem gravabit, and to the decision in ONGC [ONGC v. Assn. of Natural Gas Consuming Industries, (2001) 6 SCC 627] has been rather unnecessary because the said principle is essentially employed for the purpose of restitution and putting a party in the position where he would have been but for intervention or lapse of the Court. [ This principle has been succinctly explained by this Court in South Eastern Coalfields Ltd. v. State of M.P., (2003) 8 SCC 648 in the following words : (SCC p. 664, para 28)"28. That no one shall suffer by an act of the court is not a rule confined to an erroneous act of the court; the "act of the court" embraces within its sweep all such acts as to which the court may form an opinion in any legal proceedings that the court would not have so acted had it been correctly apprised of the facts and the law. The factor attracting applicability of restitution is not the act of the court being wrongful or a mistake or error committed by the court; the test is whether on account of an act of the party persuading the court to pass anorder held at the end as not sustainable, has resulted in one party gaining an advantage which it would not have otherwise earned, or the other party has suffered an impoverishment which it would not have suffered but for the order of the court and the act of such party."] The principle underlying this maxim is also fundamental to all the rules of administration of

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 107 justice and hence, an unintended result of any act or omission on the part of the Court, which occurs for whatever reason, is not allowed to operate to the prejudice of any person. However, this principle would not apply to the present case for the reasons that this Court consciously directed the holding company JAL to make a deposit but, added to that were the other conscious decisions where this amount was not ordered to be forfeited to JIL nor there was any decree that this amount had become property of JIL or the homebuyers of JIL. For what has been found and held hereinabove, we do not consider it necessary to dilate further on these principles.

241. The upshot is that the said amount of INR 750 crores and accrued interest thereupon, is not the property of JIL. In regard to this amount, neither the stipulation in the resolution plan could be countenanced nor the order of NCLT could be approved.

242. Accordingly, we hold that the amount of INR 750 crores, which was deposited by JAL pursuant to the orders passed by this Court in Chitra Sharma [Chitra Sharma v. Union of India, (2018) 18 SCC 611] , and accrued interest thereupon, is the property of JAL; and stipulation in the resolution plan concerning its usage by the resolution applicant of JIL cannot be approved. The part of the impugned order dated 3-3-2020 [Anju Agarwal, In re, 2020 SCC OnLine NCLT 1429] placing this amount in the asset pool of JIL is set aside."

168. In the above case, the Hon'ble Supreme Court categorically held that

stipulation in the Resolution Plan in the Resolution Plan concerning its

usage of the amount of Rs.750 crores, which was the asset of the holding

Company, cannot be approved.

169. The learned Counsel for the Appellant has also relied on the

judgment of this Tribunal in Greater Noida Industrial Development

Authority vs. Roma Unicon Designex Consortium - (2023) SCC OnLine

NCLAT 1612, wherein in paragraphs 44, following was held:

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 108 "44. ....Thus, assets of the Corporate Debtor and assets of subsidiary of the Corporate Debtor have been separately recognised and dealt with. Section 18, sub-

section (1), Explanation further clarifies the law when it says that assets shall include the assets, meaning thereby assets of the Corporate Debtor, shall not include assets of any Indian subsidiary. In the CIRP of Corporate Debtor, thus, assets of subsidiary Company, i.e., Earth Towne were not to be taken into consideration or treated as the assets of the Corporate Debtor. As regards, the law relating to resolution process of a corporate person is concerned, the law is concerned with assets of the Corporate Debtor and its liabilities, so as to focus the resolution on the assets of the Corporate Debtor. The natural corollary to the above provision is that the assets of the subsidiary Company cannot be dealt with, in CIRP of a holding Company. Holding Company and subsidiary Company have separate legal status and the assets of subsidiary Company cannot be taken into consideration."

170. The above precedents, fully supports the submission of the Appellant

that third party assets even though it may be in possession of the Corporate

Debtor, cannot be taken control of, nor can be treated to be the assets of

the Corporate Debtor by virtue of Section 18(1)(f) and (g) Explanation. In

the present case, the Corporate Debtor was admittedly owner of the lease

land and lease land has been taken into CIRP by the RP. The building,

which was constructed on the lease land, was the building constructed by

the Appellant as per the terms and conditions of the Lease Deed and the

Appellant is the owner of the building. The Lease Deed has also provided

that Lessee shall construct the building for running of Schools, Hostels and

other buildings and in event the Lessor has to re-enter, it after giving three

months' notice to the Lessee for breach of any covenant, and re-enter

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 109 subject to payment of cost of construction. Thus, payment of cost of

construction was clear stipulation before the Lease Deed can be terminated.

We have already noticed above that during CIRP, the lease was not

terminated. The Transfer of Property Act, 1882, Section 111 deals with

'Determination of lease'. Section 111, sub-clause (g) and (h) provides as

follows:

"111. Determination of lease.

xxx xxx xxx

(g) by forfeiture; that is to say, (1) in case the lessee breaks an express condition which provides that, on breach thereof, the lessor may re-enter or (2) in case the lessee renounces his character as such by setting up a title in a third person or by claiming title in himself; or (3) the lessee is adjudicated an insolvent and the lease provides that the lessor may re-enter on the happening of such event; and in any of these cases the lessor or his transferee 4[gives notice in writing to the lessee of his intention to determine the lease:

(h) on the expiration of a notice to determine the lease, or to quit, or of intention to quit, the property leased, duly given by one party to the other."

171. The facts noted above, clearly indicate that lease was never

terminated during the CIRP for the reasons as explained by the RP himself

in the affidavit as noted above. Whether without terminating the lease, the

SRA can extinguish the rights of the Lessee, as has been done by Clause

13.3 to 13.6 of the Resolution Plan extracted above? The learned Counsel

for the Appellant has also relied on the judgment of this Tribunal in UCO

Bank vs. Sudip Bhattacharya Resolution Professional of Reliance

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 110 Naval & Engineering Ltd. - (2021) SCC OnLine NCLAT 3047, where in

paragraph 11 of the judgment, following was laid down:

"11. The intent of the Code was not to terminate Agreements that have created legal rights in favor of third parties without adhering to due process of Law. Such a termination of legally binding Agreements would be in violation of the provisions of Section 30(2)(e). The Hon'ble Supreme Court in a Catena of Judgements has laid down that margin money acquires the character of 'Trust' when it is given against the Bank Guarantee issued to the beneficiary and asset held under 'Trust' cannot be considered as an asset of the 'Corporate Debtor'. It is significant to mention that in the instant case even the margin money was put in by the Bank and not by the 'Corporate Debtor'.

172. The IBC does not contemplate termination of all contractual

agreements, creating legal rights in favour of third parties. There can be

cases, where Corporate Debtor even during currency of the CIRP can

terminate contractual agreements as per the Clauses of the agreements.

But, IBC cannot be used for purpose of extinguishing of contractual

agreement, negating rights of third parties. It can be explained by taking

an example - a Corporate Debtor is owner of a building, which has been

leased out for 30 years' lease to a tenant on payment of yearly rent. When

the building is taken in the CIRP, the tenant shall not be automatically

deprived of his tenancy rights in the assets. The termination of tenancy

can be only done in accordance with the Clauses of the lease, which, if

permissible, may be done during CIRP or even thereafter. But by taking the

building in the CIRP, rights of tenant cannot be extinguished.

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 111

173. The learned Counsel for the Appellant has also relied on judgment of

the Hon'ble Supreme Court in Tata Consultancy Services Ltd. vs. SK

Wheels Pvt. Ltd. Resolution Professional Vishal Ghisulal Jain - (2022)

2 SCC 583, where termination of agreement by Tata Consultancy Services

Ltd. came to be questioned and the Hon'ble Supreme Court in paragraphs

29 and 30, laid down following:

"29. It is evident that the appellant had time and again informed corporate debtor that its services were deficient, and it was falling foul of its contractual obligations. There is nothing to indicate that the termination of the facilities agreement was motivated by the insolvency of corporate debtor. The trajectory of events makes it clear that the alleged breaches noted in the termination notice dated 10-6-2019 were not a smokescreen to terminate the agreement because of the insolvency of corporate debtor. Thus, we are of the view that NCLT does not have any residuary jurisdiction to entertain the present contractual dispute which has arisen dehors the insolvency of corporate debtor. In the absence of jurisdiction over the dispute, NCLT could not have imposed an ad interim stay on the termination notice. Nclat has incorrectly upheld [Tata Consultancy Services Ltd. v. Vishal Ghisulal Jain, 2020 SCC OnLine NCLAT 484] the interim order [BMW Financial Services (P) Ltd. v. S.K. Wheels (P) Ltd., 2019 SCC OnLine NCLT 28273] of NCLT.

30. While in the present case, the second issue formulated by this Court has no bearing, we would like to issue a note of caution to NCLT and Nclat regarding interference with a party's contractual right to terminate a contract. Even if the contractual dispute arises in relation to the insolvency, a party can be restrained from terminating the contract only if it is central to the success of CIRP. Crucially, the termination of the contract should result in the corporate death of corporate debtor. In Gujarat Urja [Gujarat Urja Vikas Nigam Ltd. v. Amit Gupta, (2021) 7 SCC 209 : (2021) 4 SCC (Civ) 1] , this Court held thus : (SCC pp. 309-10, paras 176-177)

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 112 "176. Given that the terms used in Section 60(5)(c) are of wide import, as recognised in a consistent line of authority, we hold that NCLT was empowered to restrain the appellant from terminating PPA. However, our decision is premised upon a recognition of the centrality of PPA in the present case to the success of CIRP, in the factual matrix of this case, since it is the sole contract for the sale of electricity which was entered into by corporate debtor. In doing so, we reiterate that NCLT would have been empowered to set aside the termination of PPA in this case because the termination took place solely on the ground of insolvency. The jurisdiction of NCLT under Section 60(5)(c) of IBC cannot be invoked in matters where a termination may take place on grounds unrelated to the insolvency of corporate debtor. Even more crucially, it cannot even be invoked in the event of a legitimate termination of a contract based on an ipso facto clause like Article 9.2.1(e) herein, if such termination will not have the effect of making certain the death of corporate debtor. As such, in all future cases, NCLT would have to be wary of setting aside valid contractual terminations which would merely dilute the value of corporate debtor, and not push it to its corporate death by virtue of it being corporate debtor's sole contract (as was the case in this matter's unique factual matrix).

177. The terms of our intervention in the present case are limited. Judicial intervention should not create a fertile ground for the revival of the regime under Section 22 of SICA which provided for suspension of wide-ranging contracts. Section 22 of the SICA cannot be brought in through the back door. The basis of our intervention in this case arises from the fact that if we allow the termination of PPA which is the sole contract of corporate debtor, governing the supply of electricity which it generates, it will pull the rug out from under CIRP, making the corporate death of corporate debtor a foregone conclusion."

(emphasis supplied)"

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 113

174. The Hon'ble Supreme Court has given a note of caution to NCLT and

NCLAT regarding interference with a party's contractual right to terminate

a contract. In the present case, even though in the CIRP, the lease executed

in favour of the Appellant, could have been terminated as per the Clauses

of the Lease Deed, in fact the termination has not happened as has been

pleaded by RP in its affidavit as extracted above. When the Lease Deed

under which the Appellant has constructed the building and is entitled to

receive the construction cost from the Lessor, termination and re-enter has

not been done directly, by any sidewind, by the Clauses of Resolution Plan,

extinguishing the rights of the Lessee, is impermissible and contrary to the

law.

175. We may also notice the submissions advanced by the learned

Counsel for the SRA opposing the submission of the Appellant in the

present Appeal. It is submitted that the Appellant has not filed any

objection or any claim before the Adjudicating Authority or with the RP and

having not filed any Application before the Adjudicating Authority, it cannot

be allowed in this Appeal to challenge the approval of Resolution Plan. It

is sufficient to notice that filing of claim did not arise by the Appellant before

the RP, since the lease was never terminated, giving any entitlement of

cause to the Appellant. Further, Directors of the Corporate Debtor were all

in prison, much before the commencement of CIRP and were released in

November 2022 and March 2023. The Directors of the Corporate Debtor,

who were also Promoters of the Corporate Debtor, could not participate in

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 114 the CIRP, nor had an opportunity to appear as Suspended Directors/

Promoters of the Corporate Debtor.

176. The Resolution Plan extinguishes the right of the Appellant to the

building on the lease land. Hence, by approval of Resolution Plan by the

Adjudicating Authority, the Appellant can very well file the Appeal in

exercise of its right as granted under Section 61, sub-sections (1) and (3).

The Appellant, who feels aggrieved by the order passed by the Adjudicating

Authority, approving the Resolution Plan, can very well maintain the Appeal

and the locus of the Appellant to file the Appeal cannot be questioned by

the SRA. It is further submitted that the Appellant did not challenge the

inclusion of the property in the Information Memorandum. We have

already noticed the affidavit of RP, where he has clearly stated that land

which formed the part of the Lease Deed was included in the assets of the

Corporate Debtor and rightly so. The RP having consciously not terminated

the Lease Deed, nor claimed re-entry or any right to the building, it is not

open for the SRA to question the Appellant's locus to challenge the

impugned order. The learned Counsel for the SRA further stated that

Central Bank of India has filed its claim and has secured charge over the

assets of the Corporate Debtor. The learned Counsel for the Appellant has

pointed out that claim in Form-C, submitted by Central Bank of India was

filed on the strength of Corporate Guarantee given by the Corporate Debtor.

The learned Counsel for the Appellant has referred to Items 6 and 10 of

Form-C, which are as follows:

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 115 "6. DETAILS OF Credit facility was sanctioned HOW AND WHEN to M/s D S K Global DEBT INCURRED Education and Research Limited on 9.9.2008. Which his a sister concern of D S Kulkarni Developers Ltd. who have extended their Corporate Guarantee. M/s D S K Global Education and Research Limited, are enjoying Term Loan facility of Rs.100 crores and the present dues (upto 26.9.19) are Rs.1,18,26,41,577.00"

10. LIST OF 1. Registered Mortgage deed DOCUMENTS No.1936/2010 registered ATTACHED TO with Sub-Registrar Class II, THIS PROOF OF Haveli - II.

CLAIM IN ORDER 2. EM dt. 27.9.2008 by D S K TO PROVE THE Global Education and EXISTENCE AND research Pvt. Ltd. NONPAYMENT 3. Letter of Corporate OF CLAIM DUE Guarantee dt. 30.03.2012 TO THE 4. ROC Charge Registration OPERATIONAL 5. Statement of account." CREDITOR

177. Thus, the claim was filed on the basis of corporate guarantee given

by the Corporate Debtor.

178. In view of the foregoing discussions, we are of the view that

Resolution Plan could not have extinguished the rights of the Lessee, who

owns the lease hold rights and the rights of the building erected thereon.

The Resolution Plan has sought to do many things indirectly, which cannot

be directly done. Clauses 13.4, 13.5 and 13.6 of the Resolution Plan are

contrary to the provisions of law and violates Section 30, sub-section (2) (e)

of the IBC and are unsustainable. We, thus, are of the view that Appellant

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 116

- DSK Global Education and Research Private Limited is entitled for relief

in the Appeal.

Company Appeal (AT) (Insolvency) No. 1307 of 2023 - DS Kulkarni and Company Vs. Mr. Manoj Kumar Agarwal, Resolution Professional of D.S. Kulkarni Developers Limited and Ors.

179. The Appellant, which is a Partnership Firm and sister concern of the

Corporate Debtor has questioned inclusion of property owned by the

Appellant in the Resolution Plan. The Appellant's case is that in the CIRP

of the Corporate Debtor, only assets of the Corporate Debtor can be

included and third party assets, including the assets of the subsidiaries,

cannot be included in the CIRP of the Corporate Debtor. The Appellant's

case is that by two Sale Deeds executed on 07.06.2002 by Shivaji Ingale

and Shivaji Vithalrao Ingale conveyed 20.5 R each of Survey No.326/1 at

Village Bavdhan. The Appellant's case is that the Appellant's name is

recorded in the Extract 7/12 and continues upto to the date. The said land

did not belong to the Corporate Debtor and could not have been included

in the assets of the Corporate Debtor. The Appellant, thus, questions the

inclusion of the Appellant's land in Appendix IV of the Resolution Plan,

which contains description of the properties.

180. Before we proceed to consider the rival submissions, it is useful to

notice the Sale Deed and the Survey of the area, which has been conveyed

to the Appellant. Both the Sale Deeds are registered Sale Deeds, which

have been filed at Annexures A-6 and A-7of the Appeal. The Sale Deeds

clearly indicate that Survey No.326 was admeasuring 2 H 42.8 R, which

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 117 was divided in two equal parts, S. No.326/1 and has an area of 1 H 21.4 R.

Out of entire S. No.326/1 an area of 20.5 R was conveyed by Shri Shivaji

Vithalrao Ingale vide Sale Deed dated 07.06.2022, which is clearly reflected

from the registered Sale Deed. Similarly, by another Sale Deed, an area of

20.5 R was conveyed by Smt. Lata Shivajirao Ingale from Survey No.326/1.

The Appellant has also brought on record the Extract of 326/1, which was

downloaded on 06.07.2023. Extract of Survey No.326/1 is as follows:

"GOVERNMENT OF MAHARASHTRA VILLAGE FORM No.SEVEN Record of Rights register Sheet (The Maharashtra Land Revenue Record of Rights and Registers (Preparation and Maintenance) Rule 1971 in this, sub Rule 3, 5, 6 and 7)

Village: Bavdhan BK (556124) Taluka: Mulshi District: Pune

ULPIN: 26423498680 Survey No. & Sub-Division: 326/1

Holding Type of Land: Cultivator Class 1 Local name of Land

Area, Units Acc. Holder Area Assess Pot Mutat Tenants, Parts, other Assessment No. Name ment Kha. ions Rights Units Ha R Sq. 1186 Hiralal Shravan Rajput (3130 Income Tax Recovery M. Department's charge of Ratan Shravan Rajput (3130) Rs.18303246/- + A) Cultivable Land ------------- Common Area 0.0694 0.41 Interest on M/s. D.S. Kulkarni & Co. thru Dry 0.940 Partner Menanti Irri. Deepak Kulkarni 1187 Snehalata Dinesh Shetty (4078 (6248) Others Total A 0.90.40 Dinesh Vasu Shetty (4078) Income Tax Recovery B) Non Cultivable Officer-1, Charge of Land (Po. Kha) Hemanti Deepak Kulkarni (3203) Rs.125167770/- on (3204) M/s. D.S. Kulkarni Class A Developers Ltd. (6268) Class B --------- Common Area 0.4100 2.45 Others Total B 0.00.00 Confiscated for Total 0.90.40 M/s.D.S. Kulkarni & A+B Co. Vide Section 4 of Assessment 5.40 Maharashtra Protection of Interest of Judi Depositors (In Special Financial Ass. Establishments) Act, 1999

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 118 (6334) Outstanding Mutations - No. Last Mutation No.6334 Date: 30.06.2018 Boundaries and Land Measurement Marks

Old Mutations: (1273), 1370, 1584, 1627, 1967, 2006, 3067, 3203, 3204, 3986, 5922, 5969, 6117

This Village Form No.7 is digitally signed on date 23/06/2019: 08:42:25 PM and since data of Village Form 12 is self certified, no signature stamp is required on 7/12 Record. 7/12 Download Date: 06.07.2023; 13:33:05 AM. A No.2506100001033402 should be used on the website https://digitalsatbara.mahabhumi.gov.in/DSLR for valid verification."

181. We may now notice the relevant Appendix IV, where the description

of the properties have been mentioned, where at Item No.11, land situated

at Village Bavdhan, has been included aggregating to 89.35 acres. Item

No.11, Appendix IV is as follows:

"11. All the pieces and parcel of land admeasuring in the aggregate 89.35 acres (i.e. 3,61,610 square meters) or thereabouts situate, lying and being at Village Bavdhan, Taluka Hveli and district Pune which includes but not limits the following survey numbers:

Sr. Survey No. No. 1. 245/3 2. 214 3. 245/6 4. 102 (open space) 5. 102 (amenities) 6. 314 7. 283/1A 8. 283/1B 9. 247/2 10. 326/1"

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 119 It is relevant to notice that Item No.326/1 is included at Sl. No.10,

but no area of the plot has been mentioned.

182. In the CIRP, S. No.326/1 as noted above, has been included. The RP

has filed a reply. The RP, who has prepared the Information Memorandum,

included the Plot 326/1 in the CIRP of the Corporate Debtor. The RP's case

throughout has been that the said details of the assets of the Corporate

Debtor were obtained by the RP from the information received from

Investigating Agency, Enforcement Directorate. The RP has filed a reply in

the Appeal and has pleaded that the properties, which were included in the

CIRP of the Corporate Debtor were based on the information received from

Provisional Attachment Order ("PAO") dated 14.02.2019. It is pleaded that

believing on the PAO, the RP has bonafide included the properties in the

assets of the Corporate Debtor. In paragraphs 11 and 12 of the reply of the

RP, following has been pleased:

"11. I say that Respondent No.1 also included the property being land bearing number Survey No.326/1 situated at bavdhan, Taluka Haveli, District Pune ("said Property") as part of the assets of the Corporate Debtor.

12. I say that the said Property was included by Respondent No.1 as an asset of the Corporate Debtor as the same was specified in the schedule of the Provisional Attachment Order ("PAO") no. I.E. PAO No.01/2019 dated February 14, 2019 passed by the Deputy Director, Enforcement Directorate, Mumbai Zonal Office - II ("ED") in file No.ECIR No.01/MBZO- II/2018 dated March 8, 2018. Thus, Respondent No.1 in bonafide and as mentioned in the said PAO Order included the said Property as part of the assets of the Corporate Debtor in an effort to maximise the value of the Corporate Debtor. Hereto annexed and marked as

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 120 "Exhibit-A" is the relevant extract of the PAO Order dated February 14, 2019. I say that due to the voluminous nature of the said Order, the complete copy is not annexed herewith. Therefore, I crave leave to file the complete copy of the said Order as and when directed by this Hon'ble Tribunal."

183. Provisional Attachment Order was subsequently confirmed by the

Adjudicating Authority under the PMLA Act. Provisional Attachment Order

mentions at Sl. No.40, Survey No.326/1, which was in the name of Shirish

D Kulkarni. It is relevant to notice Item No.40 of the Schedule, which is

part of the order dated 05.08.2019, which is as follows:

Sl Name of Place Nature Description Area Documents Value Remarks No. the owner where of of the details Rs. in property property property Lakhs situated

40. Shirish D Bavdhan Land Survey 0 H Sale Deed 497.65 Value as Kulkarni No.326/1 39 R 860/2015 per Sale at Village 22/01/2015 Deed Bavdhan, 11728/2015 Tal. Mulshi, 19/10/2015 Dist. Pune & 7/12 Area 0 H 39 Extract R

184. The Provisional Attachment Order did include area of Survey

No.326/1, area 39 R in the name of Shirish D Kulkarni. The order dated

05.08.2019 referred to Bavdhan property, in which area of 41 R is

mentioned in the name of D.S. Kulkarni Developers Ltd., which is at Item

Sl. No.10, which is as follows:

Sl Name of Place Nature Descriptio Are Document Value Remarks No the owner where of n of the a s details Rs. in . property propert property Lakhs situated y 10 D. S. Bavdha Land Survey 0 H 7/12 212.7 Value @ . Kulkarni n No.326/1 41 extract 9 15800/S Developer at Village R q M as s Ltd. Bavdhan, per

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 121 Tal. Ready Mulshi, Reckoner Dist. Pune Area 0 H 41 R

185. The RP in his reply has clearly stated that RP became aware of the

ownership of the property of the Appellant only through the Appeal. It was

pleaded that the Sale Deeds executed in favour of the Appellant were not

before the RP and according to information provided in the PAO, the land

was included. It is useful to extract paragraph 14 of the reply of the RP,

which is as follows:

"14. I say that Respondent No.1 became aware of the ownership of the said Property at the time of perusing the present Appeal. I further submit that the Sale Deeds executed in favour of the Appellant herein were not brought to the attention of Respondent No.1 at a prior stage. I further say that the said Property were included by Respondent No.1 according to the information provided in the said PAO Oder which specified that the said Property were owned by the Corporate Debtor. Therefore, in the absence of any clarity regarding the said Property, I say that Respondent No.1 in his capacity as the Resolution Professional included the said Property with the primary goal to maximise the value of the Corporate Debtor."

186. The basis of the inclusion of the Plot 326/1 is the PAO, as has been

pleaded by the RP. When we look into the PAO, it is clear that PAO

mentions two part of Survey No.326/1 0H39R in record in the name of

Shirish D Kulkarni and another area in the name of Corporate Debtor i.e.

OH41R. Thus the PAO attaches only two part of 326/1, 41R in the name

of Corporate Debtor and 39R in the name of Shirish D Kulkarni. The area,

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 122 which is recorded in the name of Appellant in Extract 7/12, i.e. 20.5 R and

20.5R, equivalent to 41R, is not included in the PAO. The very basis of the

inclusion of the area, which is recorded in the Extract 7/12 in the name of

the Appellant, thus falls, and reply of RP makes it clear that he came to

know about the Sale Deeds of the Appellant only through the Appeal and

he included the entire Survey number on the basis of PAO. Firstly, the PAO

does not include the entire Survey No.326/1, it only includes area of 39R

in the name of Shirish D Kulkarni and area of 41R in the name of Corporate

Debtor, whereas the area, which is recorded in the name of Appellant 20.5

and 20.5 till continues in Extract 7/12 and is different area from the area,

which was attached from Shirish D Kulkarni and the Corporate Debtor. We

have already noticed that Sale Deed, which was executed in favour of the

Appellant on 07.06.2002, clearly mentions the total area of 326/1

admeasuring an area of about 1 H 21.4 R, which is clear from the following

part of the Sale Deed, executed by Shivaji Vithalrao Ingale, which is as

follows:

"SHRI SHIVAJI VITHALRAO INGALE, Age : Adult, Occupation: Business, Residing at-S. No.326, H. No.1, Bavdhan Budruk, Taluka - Mulshi, Dist. Pune Hereinafter referred to as the "VENDOR" (which expression unless repugnant to the context or meaning thereof shall mean and include his heirs, administrators, executors and assigns etc.) THE PARTY OF FIRST PART

M/S. D. S. KULKARNI & COMPANY, A registered Partnership firm having its registered office at 1187/60 J.M. Road, Shivajinagar, Pune 411 005, through its one of the Partner Mrs. Hemanti

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 123 Deepak Kulkarni, Age : about 41 years, Occupation Business Correspondence address : 1187/60 J.M. Road, Shivajinagar, Pune 411 005.

Hereinafter referred to as "PURCHASER" (which expression shall unless repugnant to the context or meaning thereof shall mean and include all the present Partners, future Partners, their heirs, executors, successors-in-title, administrators and permitted assigns etc.) THE PARTY OF THE SECOND PART.

WHEREAS the land bearing S. No.326 at village Bavdhan Budruk, Taluka Mulshi, District Pune admeasuring about 2H 42.8 R was owned, seized and possessed by Shri Eknath Babu Dgade and Shri Nivrutti Babu Dagade;

AND WHEREAS the entire land was divided in two equal parts and numbered as S. No.326/1, admeasuring an area of about 1 H 21.4 R in the name of Shri Eknath Babu Dagade and S. No.326/2 admeasuring an area of about 1 H 21.4 R in the name of Nivrutti Babu Dagade respectively vide mutation entry No.1273 dated 1273 dated 8th September 1974;"

187. Thus total area is 1H 21.4R of 326/1 and when we include the 1H

41R recorded in favour of the Appellant; 0H41R recorded in the name of

the Corporate Debtor; and 0H39R recorded in the name of Shirish D

Kulkarni, measurement of entire Plot is complete. Thus, above facts makes

it clear that area, which is owned by the Appellant is entirely different from

the area, which was recorded in the name of Shirish D Kulkarni and

Corporate Debtor from Survey No.326/1. It is relevant to notice that PAO

attaches two part of 326/1, i.e. 39R in the name of Shirish D Kulkarni and

41R in the name of Corporate Debtor, but area which is in the name of the

Appellant, was not included in the attachment order. The RP in his reply

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 124 has candidly submitted that he was not aware of the Sale Deed in favour of

the Appellant and he included the area 326/1 on the basis of PAO. As

observed, the PAO does not include the entire area of 326/1, hence,

mentioning of entire area 326/1 in the assets of the Corporate Debtor is

wholly incorrect. Only two parts of Survey No.326/1, i.e., 39R and 41R

could have been included. We, thus, are of the view that Appellant is right

in his submission that area Survey No.326/1 to the extent of 0H41R, which

is recorded in the name of the Appellant was neither attached in PAO, now

can be part of the assets of the Corporate Debtor. We have already noticed

the provisions of Section 18(1)(f) and (g) Explanation and precedent of the

Hon'ble Supreme Court and this Tribunal, while considering the Company

Appeal (AT) (Insolvency) No.1308 of 2023, which annunciation, fully

supports the submission of the Appellant.

188. Learned Senior Counsel appearing for Respondent Nos.2 to 4 in their

reply sought to raise objection on the ground of delay and latches. The

Partners of the Appellant Deepak Kulkarni and Hemanti Kulkarni were

confined to prison and could be released only in November 2022 and March

2023. Partners of the Appellant were not part of the CIRP. The fact that

they have filed the Appeal challenging the order approving the Resolution

Plan including the assets of the Corporate Debtor, cannot be thrown out on

the ground of delay and latches as contended by Respondent Nos.2 to 4.

The learned Senior Counsel for Respondent Nos.2 to 4 has also referred to

the orders passed by this Tribunal as well as the Hon'ble Supreme Court,

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 125 where the Appeals filed by the Appellant in this Tribunal and Civil Appeal

in the Hon'ble Supreme Court were dismissed. The learned Counsel for the

Appellant has referred to the Appeal filed by Deepak Kulkarni challenging

the order of admission, which was dismissed by this Tribunal by refusing

to condone the delay in filing the Appeal and order of the Hon'ble Supreme

Court confirming the said order. Challenge to admission order by filing an

Appeal is not relevant for considering the issues raised in the present

Appeal. The learned Counsel for the Appellant has himself brought to the

notice of the Court, the order of the Hon'ble Supreme Court dated

01.04.2024 and 17.05.2024 passed in Civil Appeal No.4354 of 2024 filed

by DS Kulkarni & Company. The Appeal was filed by the Appellant,

challenging order of this Tribunal, which proceedings did not pertain to the

challenge to the approval of Resolution Plan by the Adjudicating Authority

vide order dated 23.06.2023. Hence, the proceedings taken in this Tribunal

and Hon'ble Supreme Court had no bearing on the issues, which has arisen

in the present Appeal.

189. Respondent Nos.2 to 4 in its reply has also relied on the PMLA,

Provisional Attachment Order dated 14.02.2019. We have already noticed

the details of PAO dated 14.02.2019 as above and have come to the

conclusion that PAO could not have been the basis for including the assets

of the Appellant in the CIRP of the Corporate Debtor. It is the RP, who has

included the assets of the Appellant in the CIRP of the Corporate Debtor on

the basis of PAO and he was not aware of the Sale Deeds in favour of the

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 126 Appellant, which he came to know only from the present Appeal. We have

already discussed above that PMLA order was with respect to two different

portions of Survey No.326/1 and does not relate to area, which was owned

by the Appellant. Hence, we are of the view that area owned by the

Appellant in Survey No.326/1, i.e. 0H41R (20.5 R each) was neither part of

the PMLA order, nor could have been included in the CIRP of the Corporate

Debtor. Thus in Appendix-IV, Item No.10, the Survey 326/1 has to exclude

the area of 1H 41R, which is owned by the Appellant. Thus, Item No.10 of

Appendix-IV has to be read in following manner to not violate the provisions

of law, i.e., 326/1 (excluding area of 0H41R recorded in the name of

DS Kulkarni and Company).

190. In view of the above, we are of the view that Appellant is entitled for

relief.

Company Appeal (AT) (Insolvency) No.1660 of 2023

191. The above Appeal has been filed by 25 Appellants whose claims were

not accepted by the Resolution Professional on the ground that apart from

allotment letters, they have not filed any other documents to prove

payments to the Corporate Debtor. Appellants have filed their claims

immediately after publication. The claims were filed by the Appellants in

October, 2019 and were entertained but rejected on 25.05.2021. In the

Appeal, Appellants have filed the list of creditors as issued by the

Resolution Professional dated 25.05.2021. The rejection of the claims of the

Appellants were basically on two grounds. Firstly, apart from allotment

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 127 letters issued by the Corporate Debtor no supporting documents have been

provided to prove that the payments have been received in books of the

Corporate Debtor. The entry with regard to Appellant No.1 in the list of

creditors is as follows:-

"Claim is rejected as claim is based on just the allotment letter and no other supporting documents provided and amount is also not received in the books of accounts of the Corporate Debtor"

192. The claim of some of the Appellants was rejected on the ground that

they have made the claim on the basis of Registered Agreement made with

'DSK Global Education and Research Ltd.' and no supporting documents

for payment has been filed.

193. We need to first notice the allotment letters issued by the Corporate

Debtor. Allotment was made to the Appellants in Project- DSK Vishwa Ph-

VI Aanandghan situated at Village Kirkatwadi, Grampanchyat Kirkatwadi,

Taluka Haveli, District Pune. Allotment letters were issued in favour of the

Appellants from 20.04.2017 till 29.04.2017. Allotment letters have been

collectively filed as Annexure A-2. In the allotment letters issued to the

Appellants amount of total consideration as well as the amount received

from the Appellants have been noted. It is useful to extract the allotment

issued to the Appellant No.2- Satish Bansilal Selot which allotment letter

issued by the Corporate Debtor reads as follows:-

"D. S. KULKARNI DEVELOPERS LTD.

AN ISO 0001,14001,18001 COMPANY

PROMOTERS & BUILDERS

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 128 Regd. Off "DSK House" 1187/60,

JM Road Shivajinagar, Pune-411005

Tel: 020-66047100 Fax: 020-25535772

CIN: L45201PN1991PLC063340

Mumbai Office: "DSK House", Veer Savarkar Marg (Cadell Road).

Next to Mayor's Burgston, Shivaji Park, dadar, Mumbai-400-025

Tel: 022-2446 64 46/3446 24 43 Fax: 022-244401 63 Email: sales@dskil.com Website: www.dsedl.com

Date: 29/04/2017 To,

1. Satish Bansilal Selot Flat no-12, silver Birch Apt, Model colony, Pune-16 ALLOTMENT LETTER We have accepted your provisional booking of Flat No.K-608, floor 6th, in Wing K admeasuring 71. 53 Sq. Mtrs. of Carpet area in your project called "DSK VISHWA Ph- VI AANANDGHAN" situated at Gat No.186 (pt),187 and 188 situated at village Kirkatwadi, Grampanchyat Kirkatwadi, Taluka Haveli, District Pune (hereinafter collectively referred to as the said "Flat").

You have agreed to pay the total consideration of Its. 50,90,000/- (Rupees fifty Lakhs ninety thousand Only) for the said Flat. You have paid Rs. 43,06,858/- (Rupees forty three Lakhs six thousand eight hundred fifty eight Only). You have agreed to pay the balance amount of consideration at the time of registration of Agreement. Apart from the aforesaid total consideration, you have agreed to pay Stamp Duty, Registration Fees, Initial Maintenance charges, VAT, LBT, GST, Service Tax, Share Capital and Entrance Fees if applicable and any other expenses, taxes and levies as may be required and demanded from time to time.

You are aware that, K-52 (SCP) in Lower ground floor is allotted to you. You are also aware that, said

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 129 allotment will be finalized as per rules and regulations of proposed society or apartment condominium.

It is informed to you to execute and register the agreement immediately. However on your specific request we have agreed to execute and register necessary agreement under section 4 of the Maharashtra Ownership Flat Act 1963 in respect of the said flat on or before APRIL-2021 or completion of flat or possession is flat whichever is earlier by paying the balance consideration, required duties, charges, taxes and expenses within the prescribe period. The possession of flat will be handed over after registration of agreement on completion of formalities of required documentations.

A request letter dated 25/04/2017 is furnished by you and relying on the undertaking mentioned in the request letter, this allotment letter is issued to you. For D.S.Kulkarni Developers Ltd.

President"

194. Some of the allotment letters have been issued by 'DSK Global

Education and Research Limited'. One of the allotment letters dated

29.04.2017 issued to Mr. Karan Jethamalji Jain, as follows:-

"Date: 29.04.2017 To, Mr. Karan Jethamalji jain C-101 Achal leela Khoshboo, Soft Road, Vishalnagar Near Nangude School Dimple Nilakh Pune-27.

ALLOTMENT LETTER We have accepted your provisional booking of Flat No C-903, floor 9th, in Building/Wing C admeasuring 45.52 Sq. mtrs of total carpet area, in our project "DSK VISHWA PH-VI AANANDGHAN" situated at Gat No.186 (pt), 187 and 188 situated at village Kirkatwadi, Grampanchyat Kirkatwadi, Taluka Haveli, District Pune (hereinafter collectively referred to as the said "Flat").

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 130 You have agreed to pay the total consideration of Rs. 33,36,000/- (Rupees Thirty Three lakhs thirty six thousand Only) for the said Fiat. Out of which you have paid Rs. 24,02,000/- and balance will be paid as per progress. Apart from the aforesaid total consideration, you have also agreed to pay Stamp Duty, Registration Fees, Initial Maintenance charges, VAT, Service Tax, GST, LBT, Share Capital and Entrance Fees if applicable and any other expenses, taxes and levies as may be required and demanded from time to time.

You are aware that, a C-B1(SCP) In Wing C is allotted to you. You are also aware that, said allotment will be finalized as per rules and regulations of proposed society or apartment condominium.

It is informed to you to execute and register the agreement immediately. However on your specific request we have agreed to execute and register necessary agreement under section 4 of the Maharashtra Ownership Flat Act 1963 in respect of the said flat after completion of said flat, within the prescribe period by complying required formalities and paying Stamp duty, Registration charges and other expenses as mentioned herein above.

A request letter dated 25.04.2017 is furnished by you and relying on the undertaking mentioned in the request letter, this allotment letter is issued to you. For M/s. DSK Global Education & Research Ltd.

Authorized Signatory"

195. All the allotment letters clearly contain the total consideration for flat

and the amount which have already been paid by the Appellants. 'DSK

Global Education and Research Limited' is land owner with regard to which

a Development Agreement was executed in favour of the Corporate Debtor

on 31.12.2013 and in the Resolution Plan, Resolution Applicant has

accepted to allot flats to 'DSK Global Education and Research Limited'. In

the application which was filed before the Adjudicating Authority by the

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 131 Appellant through 'DSK Aanandghan (Association of Allotment Letter

Holders)' being IA No. 1844 of 2021, the details of date of allotment,

payments, total consideration, amount paid, allotment date as well as

issuance of allotment letters have been mentioned. The list contains details

of 32 homebuyers which included all the Appellants.

196. 'DSK Global Education and Research Limited' is a Pvt. Ltd. Company

consisting of the directors who were also directors of the Corporate Debtor.

We have already noticed above that the Corporate Debtor with its sister

concern, firms, partnership firms all engaged in Real Estate Development.

'DS Kulkarni and Company' and 'DS Kulkarni Associates' were partnership

firms which were registered much prior to incorporation of the Corporate

Debtor and was carrying business. The financial statement which was filed

by the Resolution Professional indicates that amounts were payable to 'DS

Kulkarni and Company', 'DS Kulkarni Associates' and 'DSK Global

Education and Research Limited' from the Corporate Debtor. Records

indicate that the advances were also received by the Corporate Debtor from

time to time from 'DS Kulkarni & Company' and 'DS Kulkarni Associates'

for purchase of land and for carrying out its activities. In Company Appeal

(AT) (Insolvency) No. 1308 of 2023 i.e. Appeal filed by 'DSK Global

Education and Research Ltd.', Appellant has brought on record the

financial statement of Corporate Debtor as on 26.09.2019 (CIRP

commencement date) where Corporate Debtor has acknowledged loans and

advances payable to 'DS Kulkarni and Company' and 'DSK Global

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 132 Education and Research Limited' under Item No.34 i.e. related party

disclosures. Under Note B, Item No.2 loans and advances payable have

been mentioned which is useful to extract:-

"2. Loans and Advances payable DS Kulkarni & 13,092.90 13,692.90 Associates DS Kulkami & 37,387.79 37,387.14 Company DS Kulkarni 14.43 14.43 Constructions Pvt. Ltd.

DSK Infra Pvt. Ltd. 145.23 145.23 DSK Worldman 103.39 103.39 Projects Ltd. DSK Global Education 120.26 120.26 and Research Ltd. DSK Global Education 437.16 437.16 & Research- Anandghan Loan Mrs. H. D. Kulkami 299.24 299.24 Mr. Shirish Kulkarni 48.94 48.94 Mr. D. S. Kulkarni 96.34 96.34 Ambiance Ventures 682.19 682.19 Estates & Developments Pvt. Ltd. Sub total 53,027.83 53,027.20

197. The Appellants before us by compilation has brought on record bank

statements to prove the payments made by the Appellants to 'DS Kulkarni

& Company' and other sister concern. The allotment letter issued by the

Corporate Debtor or 'DSK Global Education and Research Pvt. Ltd.' clearly

contains admission of receipt of the amount. The Resolution Professional

who has filed reply in the Company Appeal (AT) (Insolvency) No.1660 of

2023 taking the stand that the claim of the Appellants could not be

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 133 admitted since amounts have not actually been received by the Corporate

Debtor. This was also stand taken in the list of creditors issued on

25.05.2021. We may also notice that the present is a case where records

and office of the Corporate Debtor was attached and the Resolution

Professional could not access the records of the Corporate Debtor for

verifying the claims and only document which have been relied by the

Resolution Professional were the documents received from Investigation

Agencies and Directorate of Enforcement. Issuance of allotment letters by

the corporate debtor to the Appellants were more than two years before

initiation of the CIRP. There can be no reason to dispute the issuance of

allotment letters or the admission contained therein of the payment. 'DS

Kulkarni and Company' is a partnership firm of the consisting of partners

Deepak Sukharam Kulkarni, Hemanti Sukharam Kulkarni and Sirish

Deepak Kulkarni who were all directors of the corporate debtor. Rejection

of the claims was on the foundation that no payments have been proved to

the corporate debtor. When the corporate debtor itself has acknowledged

the payments by issuing allotment letters, it was not open for the

Resolution Professional to take stand that no payments have been made.

Acknowledgment of the corporate debtor in the allotment letters is

sufficient to bind the corporate debtor including the Resolution

Professional. Along with the rejoinder-affidavit, copy of the common

compilations dated 17.04.2022 filed by the Appellants has been brought on

record which contains bank statements and other details to prove the

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 134 payments to sister company of the corporate debtor. Appellants have also

brought on record the materials to prove the payments to 'DS Kulkarni and

Company', the partnership firm consisting of directors of the corporate

debtor. We have already noticed that the financial statement clearly shows

the loan payable to 'DS Kulkarni and Company' by the Corporate Debtor.

In the above facts and circumstances, when corporate debtor acknowledges

the payment of amount, action of the Resolution Professional rejecting the

claim of the homebuyers cannot be sustained. The Appellants have further

submitted that they have received the direction from the Resolution

Professional to submit their claims in Form CA. Directions issued by the

Resolution Professional for submissions of the claims are at Page 66 of the

Appeal, which is as follows:-

"HOME BUYERS DIRECTIONS TO SUBMIT THE CLAIMS FOR HOME BUYERS:

As per Regulation 8A of Insolvency and Bankruptcy Code, 2016: Home Buvers are "Class of Creditors as Financial Creditors:

1. A person claiming to be a creditor in a class shall submit claim with proof to the interim resolution professional under FORM CA in ELECTRONIC FORM ONLY.

2. The existence of debt due to a creditor in a class may be proved on the basis of-

a. the records available with an information utility, if any, or b. other relevant documents, including any- i. agreement for sale;

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 135 ii. letter of allotment;

iii. receipt of payment made;

iv. documents for case filed for claims with any authority, if any v. order passed by any authority in support of claim, if any vi. such other document, evidencing existence of debt. vii. KYC Documents, Cancelled Cheque

3. A creditor in a class (HOME BUYERS) may indicate its choice of an authorized representative, from amongst the three choices provided by the Interim Resolution Professional in the public announcement, to act as its authorized representative.

a) Mr. Kedar Muley -IBBI/IPA-001/IP-P-01365/2018- 2019/12282

b) Mr. Girish Juneja. -IBBI/IPA-001/IP-P00999/2017- 2018/11646

c) Mr. Prabhanjan Maheshwari- IВВІ/IРА-002/IP-

N00517/2017-2018/11637

4. The Profile of the three professionals is available on the website http://dskcirp.com/ We would like to inform you that Form CA can be downloaded from the website of http://dskcirp.com/ or https://ibbi.gov.in/home /downloads. The Home Buyers should fill the Form and scan all the documents mentioned above along with the Form CA. Thereafter, kindly submit your claim through MAIL ONLY NO PHYSICAL COPY OF CLAIM WILL BE ACCEPTED at the email id ip.dskdl@gmail.com After receiving the mail the team of Interim Resolution Professional will verify the documents and admit the claim accordingly and same will be uploaded on www.dskcirp.com."

198. When we look into the aforesaid directions issued by the Resolution

Professional, it was mentioned that other relevant documents including any

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 136 in Clause 2(b) one of the documents mentioned was letter of allotment. The

claim filed by the Appellants was in category of letter of allotment and the

Resolution Professional took too technical views to reject their claims.

Homebuyers who have paid the amount to sister company which was

acknowledged by the corporate debtor in the allotment letters cannot be

washed out and the homebuyers' claim be rejected. Homebuyers' claims

have been rejected by the Resolution Professional taking a technical view

that amount is not reflected in the records of the corporate debtor when

corporate debtor has itself recognised the payment and which payment is

made by the Appellants to sister company i.e. 'DS Kulkarni and Company'

for which sufficient evidence was filed before us. We do not approve the

action of the Resolution Professional in rejecting the claim of the

homebuyers.

199. It is further relevant to notice that after rejection of the claims of the

Appellants on 25.05.2021, they filed an IA before the Adjudicating

Authority being IA No.1844 of 2021 for acceptance of their claims which

IA was decided on 01.08.2023 by following order:-

"ΙΑ 2157/2021 ΙΑ 1844/2021 IA 913/2023

Mr. Rohit Gupta, Ld. Counsel for the Applicant in IA 913 of 2023 and Mr. Shyam Kapadia, Ld. Counsel for the Resolution Professional of the Corporate Debtor are present. These Interlocutory Applications have been filed by Applicants, Home Buyers, seeking direction against the Resolution Professional of the Corporate Debtor for admission of their rejected claims/modification of the Resolution Plan. In this case the Resolution Plan has already been approved on

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 137 23.06.2023. Hence, the present Interlocutory Applications become infructuous and thus, the same are disposed of."

200. The Adjudicating Authority approved the Resolution Plan on

23.06.2023 and thereafter rejected the IA filed by the Appellants as having

become infructuous. When the application was filed in the year 2021 i.e.

much before plan approval application was filed, there was no occasion for

not considering the application filed by the Appellants through their

representatives and rejection of the application as having become

infructuous is unsustainable. However, in view of the plan having been

approved by the Adjudicating Authority, we need to consider the claim of

the homebuyers in this appeal and there is no occasion for issuing any

direction for consideration of IA No.1844 of 2021 afresh at this stage.

201. Counsel for the Respondent- Resolution Professional has submitted

that there is no disbursement to the corporate debtor for time value of

money nor transaction has any effect of commercial borrowing. The above

submission of the Resolution Professional cannot be accepted in view of the

wide canvas of clause 5(8)(f) which provides for "any amount raised under

any other transaction" when the homebuyers have paid amount to DS

Kulkarni and Company, which payment has been acknowledged and

accepted by the Corporate Debtor, the said amount is an amount raised

from an allottee under Real Estate Project. When allotment letter has been

issued by the corporate debtor, the Appellants have to be treated as an

allottee within the meaning of Section 5(8) explanation. We, thus, do not

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 138 find any substance in the submission that the Appellants are not allottees

and there is no disbursement to the corporate debtor for time value of

money. Resolution Professional has taken stand in paragraph 7 of the reply

that Appellants had made an agreement with the group entity of the

corporate debtor i.e. DSK Global Education and Research Ltd. and

payments made to DS Kulkarni and Company on the basis of allotment

letter was never deposited or encashed by the corporate debtor and the

amount was paid by the allottees to DS Kulkarni and Company, the sister

concern of the Corporate Debtor. The fact that amount was not deposited

by the corporate debtor or encashed by the corporate debtor cannot be a

ground to reject the claim of the Appellants, more so, when corporate

debtor itself by issuance of allotment letter has accepted and acknowledged

the payments from homebuyers. We, thus, are satisfied that the claim of

all the Appellants deserves admission and rejection of their claims by the

Resolution Professional is unsustainable. In facts of the present case,

Appellants are also entitled to be included in the Resolution Plan as

homebuyers whose claims have to be accepted for allotment of house which

is to be satisfied by the SRA.

Company Appeal (AT) (Insolvency) No.1050 of 2023 & Company Appeal (AT) (Insolvency) No.1053 of 2023:-

202. These Appeals have been filed by the Appellants who claim registered

agreement dated 30.06.2017 by the corporate debtor in their favour for the

Project 'DSK Vishwa- Phase-VI Aanandghan' and Registered Agreement

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 139 dated 30.06.2017 which have been brought on record in the paper book of

the appeals. It is sufficient to refer to the Registered Agreement dated

30.06.2017 entered between corporate debtor- 'D.S. Kulkarni Developers

Ltd.', Appellants and 'DSK Global Education and Research Ltd.'. Agreement

has been executed by corporate debtor allotting flats to Appellants in both

the appeals being Flat No. G 201 on 2nd Floor and Flat No. G 601 on 6th

Floor respectively. Clause 5 of the Registered Agreement mentioned the

consideration as Rs.2292000/- for the Appellants in Company Appeal (AT)

(Insolvency) No.1050 of 2023. Schedule IV of the Agreement further

provides that purchaser shall make the payment of agreed consideration to

'DSK Global Education and Research Ltd.'. Schedule IV of the Agreement

is as follows:-

"SCHEDULE- IV The Purchaser/s shall pay the agreed consideration of Rs. 2292000/-(Rupees Twenty Two Lac Ninety Two Thousand Only) in respect of the said flat to the DSK Global in the following manner-

Rs. 458400/- On or Before Execution of Agreement Rs. 343800/- On or Before Commencement of Plinth Rs. 91680/- On or Before Commencement of 1st Slab Rs. 91680/- On or Before Commencement of 2nd Slab Rs. 91680/- On or Before Commencement of 3rd Slab Rs. 91680/- On or Before Commencement of 4th Slab Rs. 91680/- On or Before Commencement of 5th Slab Rs. 91680 On or Before Commencement of 6th Slab Rs. 91680/- On or Before Commencement of 7th Slab Rs. 91680/- On or Before Commencement of 8th Slab

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 140 Rs. 91680/- On or Before Commencement of 9th Slab Rs. 91680/- On or Before Commencement of 10th Slab Rs. 91680/- On or Before Commencement of 11th Slab Rs. 91680/- On or Before Commencement of 12th Slab Rs.91680- On or Before Commencement of 13th Slab Rs. 91680/- On or Before Commencement of Brick Work Rs. 68760/- On or Before Commencement of Internal Plaster Rs. 687601/- On or Before Commencement of Flooring Rs. 68760/ At the time of obtaining completion certificate or at the time of possession whichever is earlier ___________________________________________________ Rs. 2292000/- Total"

203. The above Agreement also clearly dispels the stand taken by the

Resolution Professional that all payments have to be shown in the books of

account of the corporate debtor. Corporate debtor itself has entered into

Registered Agreement with the Appellants where payments have to be made

to 'DSK Global Education and Research Ltd.'. Present is a case where in

the Registered Agreement both 'DSK Global Education and Research Ltd.',

Corporate Debtor and the Appellants are party.

204. In the present case, the Appellants could not file the claim since their

case is that they were not aware of the CIRP and they came to know the

CIRP only in March 2023 which claim was filed and was rejected by the

Resolution Professional. Appellants unsuccessfully challenged the order

rejecting their claims in this Tribunal.

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 141

205. The Appellants in support of their submissions have relied on the

judgment of this Tribunal in "Puneet Kaur vs. K.V. Developers" (supra)

where this Tribunal has laid down that even if a homebuyer has not filed

the claim and his claim was reflected in the documents and books of

accounts of the corporate debtor, it has to be accepted by the Resolution

Professional and to be shown in the Information Memorandum. There being

Registered Agreement with the Appellants, the said Agreement was not to

be ignored by the Resolution Professional. It is further relevant to notice

that the present is a case where Resolution Professional's case is that he

has no access to the records of the corporate debtor.

206. Counsel for the SRA has questioned the locus of the Appellants to

challenge the plan approval order. It is submitted that IA No.2117 of 2023

filed by the Appellants was rejected on 22.11.2023 against which appeal

was filed being Company Appeal (AT) (Insolvency) No.193 of 2024 which

has been dismissed by this Tribunal on 21.02.2024. When we look into the

order of this Tribunal on 21.02.2024, it is clear that the said appeal arose

out of the order of the Adjudicating Authority who rejected application of

the Appellant to accept their claims which was rejected as barred by time.

In paragraph 10 of the judgment dated 21.02.2024, this Tribunal has

observed:-

"10. The learned Counsel for the Appellants relied on judgment of this Tribunal in K V Developers Private Limited. That was a case where claims could not be filed by the Homebuyers, but the claims were reflected in the account of the Corporate Debtor. This Tribunal in

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 142 the said judgment took the view that when claims are reflected in the accounts of the Corporate Debtor, it is the duty of the RP to collate the claim and show the same in Information Memorandum. In the present case, it is not the case of the Appellant that their claims are reflected in the account of the Corporate Debtor, nor any materials have been filed along with the Appeal to prove that their claims have been reflected in the records of the Corporate Debtor. We, thus, are of the view that reliance on the judgment in K V Developers Private Limited is clearly misplaced and does not help the Appellants in the present case."

207. In the present case, Appellants have brought on record the Registered

Agreement dated 30.06.2017 entered with the Corporate Debtor which is a

relevant record for consideration of the claim of the Appellants. The

proceeding which arose from the order dated 21.11.2023 was the

proceeding in which the claim was rejected of the Appellants as barred by

time and also on the ground that the Resolution Plan has already been

approved on 13.08.2021 whereas claim was filed by the Appellants on

29.03.2023. We are of the view that the order passed by the Adjudicating

Authority on 22.11.2023 as well as this Tribunal on 21.02.2024 shall not

operate against the Appellants in consideration of their claims which is

raised in the appeal filed challenging the order approving the Resolution

Plan. While considering the Company Appeal (AT) (Insolvency) No.1660 of

2023, we have already taken the view that the stand of the Resolution

Professional that only those claims were accepted whose payments were

reflected in the records of the corporate debtor has not been accepted.

Appellants' case in the present case is that in the ledger account of the

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 143 corporate debtor, payments made by the Appellants have been reflected.

Ledger account has been produced by the Appellants in the appeal which

is in the name of the Appellant- Piyuja Suresh Sanghvi. At Page 190 ledger

states following:-

"09. MISS. PIYUJA SURESH SANGHVI Flat at Aanandghan DSK- G 201 Ledger Account 1-Jun-17 to 30-Jun-17 Date Particulars Vch Vch Debit Credit Type No. 25- D.S. KULKARNI Journal 6 22,92,000.00 Jun- DEVELOPERS 17 LTD.

Flat No. G-201-

TOTAL AREA 45.52 METER (45.52*10.764 = 489.97 IE 490 SQ FT.) @ 4677 27- Kotak Payment 13 1,26,060.00 Jun- Mahindra 17 Bank- A/c. No.3911814759 For VAT Rs. 22920/- & SERVICE TAX RS. 103140/- Kotak Payment 14 1,39,820.00 Mahindra Bank- A/c. No.3911814759 For STAMP DUTY & REG. CHARGES (STAMP DUTY 114600/- + REG. CHARGES 25220/-) 25,57,880.00 25,57,880.00 25,57,880.00 25,57,880.00

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 144 Closing Balance

208. The above ledger further indicates that the amount for consideration

has been debited by general entry and the payments made by the

Appellants towards Service Tax and Registration Charges are reflected in

the ledger. Those amounts are also reflected in the ledger as claimed by the

Appellants and judgment in "Puneet Kaur vs. K.V. Developers" (supra) of

this Tribunal is fully applicable. Bank Statement of Kotak Mahindra Bank

has already been filed by the Appellants to prove NEFT payment to the

corporate debtor for payment of amount towards VAT, Service Tax as well

as Stamp Duty and Registration Charges which are reflected in the ledger

of the corporate debtor. Further documents have been filed to prove loan to

'DS Kulkarni & Co.'. Ledger account to 'DS Kulkarni & Co.' has been filed

which mentions that loan adjusted against purchase of Flat Nos. G 201 and

G 601. At page 192 ledger account as brought on the appeal is as follows:-

"Loan to D.S. Kulkarni & Co.

Ledger Account 1-Apr-15 to 31-Mar-18 Date Particulars Vch Type Vch Debit Credit No. 13- HDFC BANK-0148 100 Payment 10,00,000.00 Apr- 0018132 15 CH. NO. 000389- HDFC BANK LTD. CAMP BRANCH, PUNE 411 001 16- HDFC BANK-0148 100 Payment 25,00,000.00 Apr- 0018132 15 CH. NO. 000397- HDFC BANK LTD. CAMP BRANCH, PUNE 411 001

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 145 23- HDFC BANK-0148 100 Payment 25,00,000.00 May- 0018132 15 CH. NO. 000445- HDFC BANK LTD. CAMP BRANCH, PUNE 411 001 60,00,000.00 60,00,000.00

Closing Balance 60,00,000.00 60,00,000.00 1- Opening Balance 60,00,000.00 Apr-

16 28- Kotak Bank A/c No.- Receipt 10,00,000.00 Jul- 6311761128 CH. No.-

16 634399- BOM, BUDHWAR PETH 29- Kotak Bank A/c No.- Payment 10,00,000.00 Jul- 6311761128 CH. No.-

16 634399- BOM, BUDHWAR PETH-

CHEQUE RETURNED 30- Kotak Bank A/c No.- Receipt 10,00,000.00 Jul- 6311761128 16 RTGS RECEIVED FROM DSK (BANK OF MAHARASHTRA- UTR NO. MAHBR5201607300 2644693) 70,00,000.00 20,00,000.00 50,00,000.00 Closing Balance

70,00,000.00 70,00,000.00

Apr- Opening Balance 50,00,000.00 17 Jun- (as per details) Journal 46,96,000.00 17 22,92,000.00 PIYUJA S. SANGHVI 24,04,000.00

PRIYASH S. SANGHVI BEING LOAN ADJUSTED AGAINST PURCHASE OF FLAT OF G-201 AND G-601 INTEREST FROM D.S. Journal 57,750.00 KULKARNI & CO. BEING INTEREST RECEIVABLE FROM D.S. KULKARNI AND CO. FROM 01.04.2017 TO 30.06.2017

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 146 50,57,750.00 46,96,000.00 3,61,750.00 Closing Balance 50,57,750.00 50,57,750.00

209. The above facts clearly indicate that amount of consideration was

adjusted towards the allotment of Flat No. G 201 and Flat No.G 601 which

both units are involved in these two appeals, hence, there was sufficient

proof on the record that amounts were paid by the homebuyers and their

consideration was taken into consideration for allotment and issuance of

Registration Agreement. We, thus, are of the view that despite rejection of

their claims by Resolution Professional on the ground of delay sufficient

materials have been brought on the record in these appeals to take the view

that appellants' claims are also entitled to be considered in the Resolution

Plan by the SRA and non consideration of the claims of the Appellants shall

be unjust and unfair.

Company Appeal (AT) (Insolvency) No. 1361 of 2023 & Company Appeal (AT) (Insolvency) No. 1385 of 2023:-

210. Appellants in the above two appeals are homebuyers who were issued

allotment letters by corporate debtor with the Project- 'DSK Madhukosh'

between 20.04.2017 to 29.04.2017. The allotment letter acknowledged the

payment of entire consideration. It is useful to extract the allotment letter

issued to one of the Appellants- Jiten S Gada dated 24.04.2017:-

"Date:- 24.04.2017 To, Mr. Jiten Shantilal Gada (HUF)

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 147 A-21, Anupam, 3rd Floor, Opp. Telephone Exchange LBS Marg, Ghatkoper (W) Mumbai- 400086

ALLOTMENT LETTER We have accepted your provisional booking of Flat No. 103, floor 1 st in Building/Wing B, admeasuring 52.46 Sq. mtrs of total carpet area, in our project "DSK MADHUKOSH" situated at CTS No.659 comprising of S.No. 18/12 (Part), 17/1 (Part), 18/11 (Part), 18/8 (Part), 18/9 (Part), & CTS No. 662/4, comprising of S.No. 18/7 (Part), village Mohill, Tai Kurla, Sub District Bandra, Mumbai.

(hereinafter collectively referred to as the sald "Flat") You have paid the total consideration of RS. 76,00,000/- (Rupees Seventy Six Lakhs Only) for the sald Flat. Apart from total consideration you have also agreed to pay Stamp Duty, Registration Fees, Initial Maintenance charges, VAT, Service Tax, GST, LBT, Share Capital and Entrance Fees if applicable and any other expenses, taxes and levies as may be required and demanded from time to time.

You are aware that, a Car park No: 97 (SCP) on I basement floor is allotted to you. You are also aware that, said allotment will be finalized as per rules and regulations of proposed society or apartment condominium.

It is informed to you to execute and register the agreement immediately. However on your specific request we have agreed to execute and register necessary agreement under section 4 of the Maharashtra Ownership Flat Act 1963 in respect of the said flat on or before September 2017 within the prescribe period by complying required formalities and paying Stamp duty, Registration charges and other expenses as mentioned herein above.

A request letter dated 20-04-2017 is furnished by you and relying on the undertaking mentioned in the request letter, this allotment letter is issued to you.

For M/s. D. S. KULKARNI DEVELOPERS LTD.

Authorized Signatory"

211. Similarly, allotment letters issued by the corporate debtor to all the

appellants accepting their payments of entire consideration. Further, in the

present case the claim was filed by the appellants on 09.10.2019 i.e. well

within time. Appellants' further case is that they were put in possession of

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 148 the units and they have been continuing in possession. Appellants have

also brought on the record the order dated 05.02.2018 issued by the

Maharashtra RERA where undertaking of the corporate debtor was

recorded that the Registered Agreement for sale shall be executed. It is

useful to notice the order dated 05.02.2018 which is passed by

Maharashtra RERA which is as follows:-

"Order (5th February, 2018)

1. The complainant is an allottee of a flat bearing No. B 102 admeasuring carpet area of 52.46 sq.mtrs, in building No. B in the building known as known as "DSK Madhukosh" bearing MahaRERA registration No. P51800009465 at Mumbai.

2. This matter was heard today. The complainant has stated that he had booked a residential flat in respondent's project and paid 100% amount to the respondent. The respondent had also issued him an allotment letter dated 29th April 2017 and agreed to handover the possession of the flat by June 2017. But till date the respondent neither executed registered agreement for sale with him nor gave possession of the flat. Hence, the complainant has prayed for directions to the respondent for execution of agreement for sale win the complainant, for early date of possession and also Interest for the delayed possession.

3. The respondent has admitted the fact that the complainant has paid substantial amount to him. However, she has stated that due to financial crunch she could not execute the agreement for sale with the complainant till date. However, the respondent has filed notarized affidavit-cum-undertaking executed by Mrs. Hemanti Deepak Kulkarni, authorized signatory of the respondent on record of this Authority stating that she will execute the registered agreement for sale with the complainant by May 2018. In addition to this, the respondent has stated that the possession of the flat would be handed over to the complainant by May 2018. The complainant accepted the said undertaking.

4. In view of above, this Authority is of the view that since there is no agreement between the complainant and the respondent,

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 149 section 18 of the Real Estate (Regulation and Development) Act, 2016 is not applicable to this case and therefore, the complainant can not seek interest for the delayed possession. However, since the respondent has given the undertaking to register the agreement and the complainant has also accepted the same, nothing survives in this complaint. Hence the complaint stands disposed of."

212. When before Maharashtra RERA corporate debtor has acknowledged

that it shall execute the agreement of sale in favour of the appellants, there

can be no denial that appellants are allottees within the meaning of IBC.

Resolution Professional after receiving of the claims by the Appellants has

also sent a communication to homebuyers dated 17.07.2020 where again

it was observed that the claim will be admitted subject to verification of the

books of accounts of DSDKL. The allotment letter which was issued in April

2017 clearly acknowledges the receipt of the entire payment and it was not

appropriate for the Resolution Professional to reject the claims of the

appellants. It is further relevant to notice that after rejection of the claim of

the appellants, they have filed IA No. 2157 of 2021 before the Adjudicating

Authority which IA was listed before the Adjudicating Authority on several

occasions. Adjudicating Authority has passed the order on 01.08.2023

rejecting the IA No. 2157 of 2021 as infructuous. Appellant has brought on

record the earlier order passed by the Adjudicating Authority where

Adjudicating Authority has directed the IA No.2157 of 2021 and other IAs

shall be heard prior to hearing on the Resolution Plan application. On

13.06.2022 when plan approval application being IA No.1950 of 2021 as

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 150 well as application IA 2157 of 2021 filed by the appellants was listed,

following orders were passed:-

"IA 1950/2021

This Application is filed for approval of Resolution Plan. It is made clear that the present Application will be heard after disposing of all other pending Applications. Accordingly, the same is adjourned on 20.07.2022.

IA 2157/2021 None present for the Applicant in the present Applications. Ld. Senior Counsel appeared for the Respondent/Resolution Professional (RP) submits that affidavit in reply is filed however, hard copies of the same have not yet been placed on record. Respondent is directed to place hard copies of Reply on record well before the adjourned date. It is also contended by respondent that these Applications can be disposed of as Applicants in these Applications have failed to produce any payment before the Corporate Debtor and as such their claim cannot be considered by the RP. However, applicants have stated that they paid money. Ld Sr Counsel was asked to indicate the modus operandi of receiving money by partnership firm and allotment by the Company, whether such practice was followed by CD in other cases. List this matter on 11.07.2022."

213. The Adjudicating Authority although has directed that the plan

approval application shall be heard after disposing of all other pending

applications but proceeded to approve the plan by keeping IA No.2157 of

2021 pending which was subsequently dismissed as infructuous. When the

homebuyers had filed application and claiming that claims were entitled to

be admitted in the CIRP of the corporate debtor with substantial ground,

rejection of their application as infructuous due to plan approval order

cannot be justified. The plan having been approved by the Adjudicating

Authority on 23.06.2023 against which order these appeals have been filed,

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 151 there is no occasion now for directing the Adjudicating Authority to

consider the IA No.2157 of 2021 on merits. Hence, we have proceeded to

examine the claim of the Appellants on merits. We are fully satisfied that

appellants claim was not liable to be rejected on the ground that they have

not submitted any document to prove the payment to the corporate debtor

when the corporate debtor itself in the allotment letter has acknowledged

the payment of entire consideration. We, thus, are satisfied that the claim

of the appellants deserves consideration. The Resolution Professional erred

in not accepting the claims.

214. Learned Counsel for the RP as well as for the SRA tried to condemn

the allotment letter issued by the Corporate Debtor in favour of the

Appellants, Homebuyers as fraudulent exercise, without any payment to

Corporate Debtor. We need to look into the background facts under which

allotment letters were issued by the Corporate Debtor in April 2017 in

favour of the Appellants, which were more than two years prior to initiation

of CIRP. We have already noticed that the complaints and FIR by several

depositors and individuals against the Corporate Debtor and Group

Companies, had begun in the year 2017. The money having received from

the Appellants by sister concern of the Corporate Debtor, allotment letters

issued by the CD by accepting the payment received, cannot be held to

fraudulent, but was genuine steps taken by CD to acknowledge the claim

and was a mitigating step to pacify the person from whom money was taken

by the Group Entities and the Corporate Debtor. We are, thus, of the clear

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 152 opinion that allotment letters, which were issued by the Corporate Debtor

in favour of the Appellants as Homebuyers, were genuine allotment letters

and has rightly acknowledged the payment receipts.

Company Appeal (AT) (Insolvency) No. 1223 of 2023 & Company Appeal (AT) (Insolvency) No. 1226 of 2023:-

215. These two appeals have been filed by the operational creditors and

employees questioning the amount proposed to the appellants in the

resolution plan. In Company Appeal (AT) (Insolvency) No.1223 of 2023, we

have already noticed the amount proposed to the operational creditors as

against the admitted amount. In paragraph 7.3 of the appeal, details of the

amount, claim admitted and amount received with percentage have been

mentioned. Paragraph 7.3 of the appeal is as follows:-

"7.3. Pursuant to the initiation of CIRP, the Appellants herein, being Operational Creditors, filed their respective claims before Respondent No.1, which, after verification, were admitted by the Respondent No.1 in entirely. Tabular representation of the claims filed by the Appellants and admitted by the Respondent No.1 is provided hereinbelow:-

Sr. Particulars Claim Claim Amount % of No. Submitted Admitted Received Amount Received 1. Sri Umiyaa 7,43,11,257/- 7,43,11,257/- 2,73,831/- 0.368% Construction Pvt. Ltd. 2. Aryan Images 60,94,930/- 60,94,930/- 22,429/- 0.368% 3. Cosomos 56,46,997/- 56,46,997/- 20,781/- 0.368% Construction Machinery and Equipment Pvt. Ltd. 4. Nikhil Transport 55,48,330/- 55,48,330/- 20,418/- 0.368% Company 5. Atharva Events 37,23,992/- 37,23,992/- 13,704/- 0.368%

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 153

216. The above indicate that the payment of amount to operational

creditors is 0.368%. Similarly, in the appeal filed by the employees being

Company Appeal (AT) (Insolvency) No.1226 of 2023, their case is that the

payment of the amount to the appellants is less than 1% of their claims.

Employees in their appeal have also raised issue of valuation. We have

already considered the question of valuation of the corporate debtor while

considering the Company Appeal (AT) (Insolvency) No.63 of 2024. Hence,

we see no reason to consider the question of valuation at the instance of

the employees. The Resolution Professional has filed reply in both the

appeals. It is submitted by the Resolution Professional that the plan has

been approved by 83.37% of the vote share. It is submitted that the

operational creditors have not filed any objection before the Adjudicating

Authority. When we look into the pleadings in the appeals filed by the

operational creditors as well as the employees, no grounds have been made

out that payments which have been offered to them is less than their

entitlement as per Section 30(2)(b). It is now well settled that plan which is

approved by the CoC, can be interfered with only when there is non-

compliance of the provisions of Section 30(2). Operational creditors in

which employees were also included are entitled for payment as per Section

30(2)(b). Thus, the only ground on which an amount proposed in the plan

can be interfered with to an operational creditor when the amount is not in

conformity with Section 30(2)(b). It is true that the amount offered to the

operational creditors is .368% and to the employees is .97% but law as exist

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 154 today does not permit interference in the amount proposed in the plan

unless appellants are able to prove any violation of Section 30(2)(b) of the

Code. Although appellants are pleaded that amount is inequitable and

unfair and a meagre amount but there being no pleading that the amount

is less which they are entitled under Section 30(2)(b). We are unable to

interfere with the payouts given to operational creditors/employees in the

Resolution Plan. We, thus, are of the view that on the ground as raised by

the appellants, the Resolution Plan and the order approving the plan needs

no interference.

Reliefs, if any, for the Appellants

217. The jurisdiction of Adjudicating Authority and the Appellate Tribunal

to interfere with the Resolution Plan approved by the CoC, in exercise of its

commercial wisdom, are well settled. The limited jurisdiction as has been

recognized by the precedents of the Hon'ble Supreme Court is when the

Resolution Plan is in not conformity with statutory requirements of Section

30, sub-section (2) of the IBC. Thus, the jurisdiction with NCLT and

Appellate Tribunal is limited to examine as to whether the Resolution Plan

is in compliance with Section 30, sub-section (2), sub-clause (e) of the IBC.

Section 31, sub-section (1) provides:

"31. Approval of resolution plan. - (1) If the Adjudicating Authority is satisfied that the resolution plan as approved by the committee of creditors under sub-section (4) of section 30 meets the requirements as referred to in sub-section (2) of section 30, it shall by order approve the resolution plan which shall be binding on the

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 155 corporate debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being in force, such as authorities to whom statutory dues are owed, guarantors and other stakeholders involved in the resolution plan.

Provided that the Adjudicating Authority shall, before passing an order for approval of resolution plan under this sub-section, satisfy that the resolution plan has provisions for its effective implementation.

218. While considering Company Appeal (AT) (Insolvency) No. 1307 of

2023 - DS Kulkarni and Company and Company Appeal (AT) (Insolvency)

No. 1308 of 2023 - DSK Global Education and Research Pvt. Ltd., we have

come to the conclusion that the Resolution Plan, includes the assets, which

do not belong to the Corporate Debtor and under Section 18(1)(f) and (g)

explanation, the assets of only Corporate Debtor can be taken control by

the RP. We have already held that Resolution Plan cannot include the

assets of third party, which are although in possession of the Corporate

Debtor, but not owned by the Corporate Debtor. Inclusion of assets of

Appellant in Company Appeal (AT) (Insolvency) Nos. 1307 and 1308 of 2023

is, thus, clearly in violation of law. While considering the Company Appeal

(AT) (Insolvency) No. 1308 of 2023, we have held that the lease, which was

granted to the Appellant DSK Global Education and Research Pvt. Ltd. was

never terminated and the building, which was constructed by the

Appellant, was owned by the Appellant and the clauses of Resolution Plan,

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 156 which extinguished the rights of the Appellant, were not in accordance with

law.

219. The part of the Resolution Plan being not in accordance with law,

which has been approved by the Adjudicating Authority, the course open

for this Tribunal is to either set aside the Resolution Plan or to delete the

clauses, which are not in accordance with law to make the Resolution Plan

compliant. We are of the view that second course need to be adopted, by

deleting the clauses in the Resolution Plan, which are contrary to the law,

as per Section 30, sub-section (2), sub-clause (e), so as not to interfere with

the other part of the Resolution Plan, which have been approved.

220. Now we come to Appeal(s) filed by Homebuyers, i.e., Company Appeal

(AT) (Insolvency) Nos.1385, 1050, 1051, 1361 and 1385 of 2023. The claim

of the Appellant(s), who were allottees of the different units allotted by the

Corporate Debtor clearly sustainable. In the Resolution Plan, the claims of

the Homebuyers, whose name have been accepted and admitted, have been

proposed to give the units. These Appellant(s), as held by us that their

claims also to be accepted and they are also to be given units as given to

other Homebuyers, whose claims have been accepted. We direct the SRA

to accept the claims of the Appellant(s)/ Homebuyers in the above Appeal(s)

and to give them the same treatment as has been given to other

Homebuyers, so that the Resolution Plan can be saved from invalidity.

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 157

221. Coming to the Company Appeal (AT) (Insolvency) Nos.63 of 2024;

1142 of 2023 of Group-I, we have already found that those Appellant(s) are

not entitled for any reliefs.

222. Coming to the Appeal in Group-III, i.e., Appeal(s) filed by Operational

Creditor and Employees, being Company Appeal (AT) (Insolvency) Nos.1223

and 1226 of 2023, we have found that at their instance, Resolution Plan

need no interference.

223. In view of the foregoing discussions and conclusions, we proceed to

decide the above Group of Appeal(s) in following manner:

1. Company Appeal (AT) (Insolvency) Nos.63 of 2024, 1142 of 2023, 1223 of 2023 and 1226 of 2023.

• No reliefs can be granted in these Appeal(s). Resolution Plan does not require any interference at the instance of these Appellant(s). The Appeal(s) are dismissed.

2. Company Appeal (AT) (Insolvency) No.1307 of 2023 This Appeal is partly allowed. Excluding the area of 41R recorded in the name of Appellant in Survey No.326/1, the Resolution Plan at Appendix-IV, Item No.10, is required to be modified and substituted to make the Resolution Plan compliant. Thus, Appendix-IV, Item No.10 stand substituted by following:-

Sr. No. Survey No. 10 • 326/1 (excluding area of OH41R recorded in the name of DS Kulkarni and Company).

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 158

3. Company Appeal (AT) (Insolvency) No.1308 of 2023 • This Appeal is partly allowed. Clauses 13.4, 13.5 and 13.6 of the Resolution Plan are deleted from the Resolution Plan to make the Resolution Plan compliant. The Appellant's (DSK Global Education and Research Pvt. Ltd.) rights and building standing on the lease land, shall not be treated to have extinguished.

4. Company Appeal (AT) Insolvency Nos.1361, 1385, 1660 of 2023 • These Appeal(s) filed by Homebuyers are allowed. The claims of the Appellant(s) are accepted as allottees of the Corporate Debtor. The order of RP, rejecting their claims is set aside. The Appellant(s) name shall be treated to be included in the list of Homebuyers, whose claim have been accepted and they shall also be treated by SRA in the Resolution Plan, in the same manner as other Homebuyers, whose claims have been admitted. The Appellant(s) shall also be entitled for the units allotted to them in accordance with clauses of the Resolution Plan.

5. Company Appeal (AT) Insolvency Nos.1050 and 1051 of 2023.

• The Appellant(s) having successfully proved the allotment by Registered Deed executed on 30.06.2017 and their payments also reflected in ledger of the Corporate Debtor, they are also entitled to claim treatment as has been given to the claims of the other Homebuyers. They are entitled to be treated in the same manner as other Homebuyers, whose claims have been admitted in the Resolution Plan.

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 159 The SRA is directed to treat the Appellant(s) also allottees of their respective units and they shall also be given the units as per the Resolution Plan.

224. Subject to directions as above, the order of Adjudicating Authority

dated 23.06.2023 approving the Resolution Plan submitted by Ashdan

Properties Pvt. Ltd.; Classic Promoters and Builders Pvt. Ltd. and Atul

Builders India Pvt. Ltd. is upheld.

225. In event of non-compliance of above directions, liberty is given to the

Appellant(s), whose Appeal(s) have been partly allowed to file an IA for

appropriate directions.

Parties shall bear their own costs.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical)

NEW DELHI

1st July, 2024

Ashwani/Himanshu/Anjali

Company Appeal (AT) (Insolvency) Nos. 1223, 1226, 1307, 1308, 1142, 1361, 1385, 1660, 1050, 1051 of 2023 & 63 of 2024 160