E-Homes Infrastructure Private ... vs New Okhla Industrial Development ...

NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI Company Appeal (AT) (Insolvency) No. 424 of 2022 (Arising out of Order dated 21.02.2022 passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi, Principal Bench in C.A. No.2488/2019 in CP(IB) 875(PB)/2018)

IN THE MATTER OF: E-Homes Infrastructure Private Limited Through Mr. Subodh Kumar Sharma, Authorised Representative, Dasnac Annexe I, ECE House, 28A, Kasturba Gandhi Marg, Delhi 110001. .... Appellant Vs 1. New Okhla Industrial Development Authority Main Administrative Building, Sector-6, Gautam Buddha Nagar, Noida, Uttar Pradesh. 2. Neo Infrastructure Private Limited Through its Resolution Professional, Mr. Dinesh Sood, 85, Ground Floor, World Trade Centre, Barakhamba Lane, New Delhi 110001. .... Respondents

Present: For Appellant: Mr. Nakul Dewan, Sr. Advocate, Mr. Mrinal Harsh Vardhan, Mr. Neil Chatterjee, Advocates For Respondents: Mr. Sourav Roy, Mr. Prabudh Singh, Mr. Kaushal Sharma, Mr. Vishal Malik, Advocates for R-1/Noida Authority.

With Company Appeal (AT) (Insolvency) No. 434 of 2022 (Arising out of Order dated 21.02.2022 passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi, Principal Bench in C.A. No.2488/2019 in CP(IB) 875(PB)/2018)

IN THE MATTER OF: Dinesh Sood Resolution Professional of Neo Infrastructure Pvt. Ltd. Upper Ground Floor, 1/15 Tilak Nagar, New Delhi - 110018. .... Appellant

Company Appeal (AT) (Insolvency) Nos. 424, 434 & 458 of 2022 1 Vs

New Okhla Industrial Development Authority Main Administrative Building, Sector-6, Gautam Buddha Nagar, Noida, Uttar Pradesh - 201301. .... Respondent

Present: For Appellant: Mr. I.P.S. Oberoi and Mr. Himrit Singh Wadhwa, Advocates

For Respondent: Mr. Sourav Roy, Mr. Prabudh Singh, Mr. Kaushal Sharma, Mr. Vishal Malik, Advocates for Noida Authority.

With Company Appeal (AT) (Ins.) No. 458 of 2022 (Arising out of Order dated 21.02.2022 passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi, Principal Bench in C.A. No.2488/2019 in CP(IB) 875(PB)/2018)

IN THE MATTER OF: 1. Asha Aggarwal W/o Sh. Raj Kumar Aggarwal, R/o 221, Sector-15A, Noida, Gautam Budh Nagar, Uttar Pradesh-201301. 2. Manish Aggarwal S/o Sh. Raj Kumar Aggarwal, R/o 221, Sector-15A, Noida, Gautam Budh Nagar, Uttar Pradesh-201301. Proprietor, M/ s Devi Dayal Builders and Developers 3. Japna Estates Private Limited Having its office at: Khasra No. 1080, Ground Floor, Village Bhalswa, Jahangir Puri, Delhi -110033. Through its Director, Mr. Sharan Pal Singh Sethi 4. SC Khaneja and Sons HUF Through Karta, Subash Chandra Khaneja S/ o Sh. Sant Lal Khaneja, R/o House No. A-103, Vikas Marg, Laxmi Nagar, Shakarpur, Delhi-110092.

Company Appeal (AT) (Insolvency) Nos. 424, 434 & 458 of 2022 2 5. Nihal Singh Iqbal S/o lqbal Hussain, R/o D-125, Defense Colony, Jajmau, Kanpur, ShiwansTenray, Kanpur Nagar, Uttar Pradesh - 208010.

6. Rakesh Projects Pvt. Ltd. Through Its Director, Sh. Rajiv Kumar Jain, W-10/18, Old No. H-36D, Westend Avenue, Sainik Farms, New Delhi-110062.

7. Jatinder Pal Builders Pvt. Ltd. Through Its Director, Sh. Manmohan Pal Singh Chadha, RZ-289/345, Plot No. 85-A, Khasra No.345, Gali No. 4, Shiv Puri, Sagar Pur, New Delhi -110046. .... Appellants

Vs

1. New Okhla Industrial Development Authority Main Administrative Building, Sector-6, Gautam Buddha Nagar, Noida, Uttar Pradesh. 2. Neo Infrastructure Private Limited Through its Resolution Professional, Mr. Dinesh Sood 85, Ground Floor, World Trade Centre Barakhamba Lane, New Delhi 110001 .... Respondents

Present: For Appellants: Ms. Tripti Kapoor and Mr. Rahul Malhotra, Advocates. For Respondents: Mr. Sourav Roy, Mr. Prabudh Singh, Mr. Kaushal Sharma, Mr. Vishal Malik, Advocates for R-1/Noida Authority.

JUDGMENT

ASHOK BHUSHAN, J.

These three Appeal(s) have been filed against the same order dated

21.02.2022 passed by the National Company Law Tribunal, New Delhi

Company Appeal (AT) (Insolvency) Nos. 424, 434 & 458 of 2022 3 Principal Bench in C.A. No.2488/2019 in CP (IB) 875 (PB)/2018, by which

order, Adjudicating Authority allowed the Application filed by New Okhla

Industrial Development Authority ("NOIDA") - Respondent No.1.

2. Company Appeal (AT) (Ins.) No.424 of 2022 has been filed by

E-Homes Infrastructure Private Limited, the Resolution Applicant, who has

filed two Resolution Plans in Corporate Insolvency Resolution Process

("CIRP") of two Corporate Debtors namely - Neo Infrastructure Private

Limited and M/s Brys International Private Limited. The Company Appeal

(AT) (Ins.) No.434 of 2022 has been filed by Dinesh Sood, Resolution

Professional ("RP") of Neo Infrastructure Pvt. Ltd. and Company Appeal (AT)

(Ins.) No.458 of 2022 has been filed by Homebuyers, who have been allotted

units by M/s Brys International Private Limited. The Appellants -

Homebuyers were also Financial Creditors of the Corporate Debtor M/s

Brys International Private Limited.

3. Brief facts and sequence of events necessary to be noticed for

deciding issues raised in these Appeal(s) are:

(i) The NOIDA entered into Lease Deed dated 17.01.2012 with

M/s Logix Builders & Promoters Pvt. Ltd. (hereinafter referred

to as "Lessee"), by which commercial Plot No.SC 01/A, situated

at Sector 150, Noida measuring 2,69,430 sq. mtrs. was leased

out for a period of 90 years on premium as detailed in the Lease

Deed.

(ii) A Sub-Lease Deed dated 15.04.2013 was entered between

NOIDA, Lessee and Neo Infrastructure Pvt. Ltd. (hereinafter

Company Appeal (AT) (Insolvency) Nos. 424, 434 & 458 of 2022 4 referred to as a "Sub-Lessee"). Sub-Lease Deed contained

various clauses requiring prior permission of the Lessor, i.e.

NOIDA for transferring the Plot.

(iii) A Collaboration Agreement dated 13.07.2013 was entered

between Lessee and Sub-Lessee and one M/s Brys

International Pvt. Ltd., under which for consideration of Rs.20

crores to be paid by Brys International Pvt. Ltd. to Lessee,

various rights in the leased land were transferred to the

developer, Brys International Pvt. Ltd.

(iv) M/s Brys International Pvt. Ltd. and Neo Infrastructure Pvt.

Ltd. had taken various financial facilities from Bank of Baroda.

On an Application filed under Section 7 of the Insolvency and

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

by Bank of Baroda against Brys International Pvt. Ltd., CIRP

was initiated by order dated 31.01.2019 and Shri Dinesh Sood

was appointed as Interim Resolution Professional ("IRP").

(v) On an Application filed under Section 7 by the Bank of Baroda

against Neo Infrastructure Pvt. Ltd., CIRP was initiated vide

order dated 01.02.2019 by the Adjudicating Authority, in

which Shri Dinesh Sood was appointed as IRP.

(vi) In the CIRP of Neo Infrastructure Pvt. Ltd., NOIDA filed its

claim, which was accepted in 3rd Meeting of the Committee of

Creditors ("CoC") on 15.05.2019 as Financial Creditor to the

extent of Rs.443,066,019/- with voting share of 26.95%.

Company Appeal (AT) (Insolvency) Nos. 424, 434 & 458 of 2022 5

(vii) On 15.10.2019, the Appellant - E-Homes Infrastructure Pvt.

Ltd. has submitted two separate yet parallel Resolution Plan

for the CIRP of Neo Infrastructure Pvt. Ltd. and Brys

International Pvt. Ltd.

(viii) On 13.11.2019 an CA No.2488 of 2019 was filed by

Respondent No.1 - NOIDA, where a direction was sought, not

to accept the Resolution Plans, which propose a composite

Scheme for Neo Infrastructure Pvt. Ltd. and Brys International

Pvt. Ltd. A prayer was also made to stay on the voting of the

Resolution Plan, which was submitted by M/s. E-Homes

Infrastructure Pvt. Ltd. The Application was opposed by the

RP, who filed a reply to the Application.

(ix) Subsequent to the filing of Application by NOIDA, both the

Resolution Plans were approved by the CoC on 28.02.2020 and

an Application was filed by RP for approval of the Plans before

the Adjudicating Authority.

(x) The CA No.2488 of 2019 was heard by the Adjudicating

Authority and by the impugned order, the Adjudicating

Authority has allowed the Application filed by Respondent

No.1.

Aggrieved by the order passed by the Adjudicating Authority,

these three Appeal(s) have been filed.

Company Appeal (AT) (Insolvency) Nos. 424, 434 & 458 of 2022 6

4. We have heard learned Counsel for the Appellant, i.e., Resolution

Applicants, Resolution Professional as well as Homebuyers. We have also

heard learned Counsel appearing for NOIDA.

5. The learned Counsel for the Successful Resolution Applicant submits

that Adjudicating Authority has passed order on CA No.2488 of 2019,

which Application became infructuous in view of the approval of the

Resolution Plan and the order passed by the Adjudicating Authority is

ineffective. The Adjudicating Authority has exceeded its jurisdiction in

interpreting contractual rights and obligation of the parties. NOIDA never

exercised its right to cancel the Sub-Lease Deed. The order passed by the

Adjudicating Authority is also in violation of the principles of natural justice

since Resolution Applicant was not party to the Application.

6. The learned Counsel for the RP also supported the submissions

raised by learned Counsel for the Resolution Applicant and has reiterated

that the Application has become infructuous on the date when it was heard.

It is submitted that the order is non-speaking order. The voting on the

Resolution Plan of the Resolution Applicant for Neo Infrastructure Pvt. Ltd.

and Brys International Pvt. Ltd. has already been held in February 2020.

It is submitted that CIRP of both the Corporate Debtors have been carried

out separately and not in consolidated process, although, Meetings of the

CoC were held on the same day but separately. The Adjudicating Authority

has wrongly observed in its order that RP has submitted that CIRP process

in respect of both the Corporate Debtors has been carried out in a

consolidated manner without any order of consolidation of the Adjudicating

Company Appeal (AT) (Insolvency) Nos. 424, 434 & 458 of 2022 7 Authority. The operative portion of the order is not very clear as to how the

Corporate Debtors have violated the terms of the Lease Agreement. The

Adjudicating Authority had no jurisdiction to adjudicate on an aspect

which has not arisen and which is not in relation to CIRP of the Corporate

Debtor. The issue of absence of jurisdiction was advanced by the Counsel

for the RP. The Neo Infrastructure Pvt. Ltd. has transferred only the

development and sales rights to Brys International Pvt. Ltd. It is submitted

that NOIDA is an Operational Creditor in the CIRP of Neo Infrastructure

Pvt. Ltd.

7. Shri Sourav Roy, learned Counsel appearing for the NOIDA, refuting

the submission of learned Counsel for the Appellant(s), supports the order

of the Adjudicating Authority and submits that the Lessee and Sub-Lessee

have violated the terms of the Lease and Sub-Lease. The Collaboration

Agreement, which was executed by Neo Infrastructure Pvt. Ltd. in favour of

Brys International Pvt. Ltd. was in violation of the terms of the Sub-Lease.

No approval of Respondent No.1 - NOIDA was obtained before transferring

the development and sale rights in favour of Brys International Pvt. Ltd.

The Collaboration Agreement executed by Sub-Lessee in favour of Brys

International Pvt. Ltd., it transferred all rights including right to sell. The

land which was leased out by the NOIDA, of which Noida continued to be

the owner, could not be made asset of Corporate Debtor, nor the same can

be taken in possession by the RP. The Collaboration Agreement, which was

executed, was in violation of the terms of Sub-Lease Deed, is void and

inoperative. The Resolution Applicant has cleverly submitted Resolution

Company Appeal (AT) (Insolvency) Nos. 424, 434 & 458 of 2022 8 Plans for both the Corporate Debtor, i.e. Neo Infrastructure Pvt. Ltd. and

Brys International Pvt. Ltd. providing for that approval of Resolution Plan

of Neo Infrastructure Pvt. Ltd. is contingent to Resolution Plan of Brys

International Pvt. Ltd. No order was passed by the Adjudicating Authority

for consolidation of CIRP of both the Corporate Debtors and seeking

approval of conjoint Resolution Plan by the Resolution Applicant was a

clever device to take up the land of Respondent No.1 without obtaining its

prior permission and without clearing its dues. Approval of Resolution Plan

by the CoC was beyond the timeline of the CIRP period. The Plan was

sought to be amended by the Resolution Applicant, even after voting on the

Plan. The Application filed by Respondent No.1 has not become

infructuous. Respondent No.1 has sought direction, not to accept

consolidated Plan for both the Corporate Debtors, which were contrary to

the IBC. The RP has failed to perform its obligation under the IBC and

Regulations. The RP ought not to have certified that both the Plans are

compliant of the IBC. The Resolution Plan submitted are void and non-est.

The transfer of development rights and rights of sale to Brys International

Pvt. Ltd. by way of Collaboration Agreement is non-est. No prior approval

was obtained for consolidation of the CIRP of Neo Infrastructure Pvt. Ltd.

and Brys International Pvt. Ltd. All the three Appeal(s) deserve to be

rejected.

8. We have considered the submissions of learned Counsel for the

parties and have perused the record.

Company Appeal (AT) (Insolvency) Nos. 424, 434 & 458 of 2022 9

9. We need to notice few terms and conditions of the Lease Deed and

Sub-Lease Deed, which were executed by the NOIDA. Lease Deed executed

by NOIDA in favour of M/s Logix Builders & Promoters Pvt. Ltd. dated

17.01.2012, leased out Plot in question for development of Sports City for

recreational, commercial and residential including group housing. As per

Clause 28 of the Lease Deed, Lessee was entitled to Sub-Lease the sports,

other facilities and institutional activity with prior approval of NOIDA.

Transfer of whole Plot and Sub-Lease of built-up space was to be governed

by Transfer Policy prevailing at the time of such transfer or sub-lease of

built-up space.

10. A Sub-Lease Deed was executed on 15.04.2013 between NOIDA,

Lessee and Neo Infrastructure Pvt. Ltd., Sub-Lessee. Sub-Lessee under the

Lease Deed was to follow various obligations including obligation in Clause

(II)(k), which provided:

"(k) The sub-lessee can. transfer the whole plot and the buildings constructed thereon with the prior permission of the LESSOR, after payment of transfer charges as per the prevailing policy of the Lessor. However, the lessor reserves the right to reject any such transfer application without assigning any reason whatsoever.

In addition to the transfer charges as per prevailing policy of the LESSOR, the sub-lessee shall also pay an amount of Rs. 10,000/- towards the processing fees.

All the terms and conditions of the brochure, the allotment, the permission for grant of transfer,

Company Appeal (AT) (Insolvency) Nos. 424, 434 & 458 of 2022 10 lease deed etc. shall be. binding on the sub-lessee, as well, as the transferee(s).

No transfer charges shall be payable in case of transfer between son, daughter, husband, wife, mother, father and vice-versa, However, processing fee of Rs, 10,000/- will be payable on such transfer.

Change in Constitution will be permitted as per prevailing policy of the Lessor and as per terms and conditions of the brochure of the scheme.

No transfer charges shall be applicable if built up space of commercial, plot, is transferred within two years from the date of issuing of the completion certificate by the LESSOR. Thereafter, the transfer charges shall be payable on a pro-rata basis as applicable. In addition to the transfer charges, an amount of Rs.10,000/- shall also be payable against the processing fee. The sub-lessee will be permitted to transfer the built-up space on the fulfillment of the following conditions:-

(i) The sub-lessee has made full payment of the plot premium along with interest thereon and the up-to-date lease rent along with interest, if any, due thereon.

(ii) The lease deed as per rules has been duly executed.

(iii) The sub-lessee has obtained the building completion certificate from the LESSOR.

(iv) The transferee(s) undertake to put to use the premises for the original permissible use only and the premises being transferred are

Company Appeal (AT) (Insolvency) Nos. 424, 434 & 458 of 2022 11 as per completion certificate and are not part of any common area.

(v) The Sub-lessee shall also execute a tripartite sub-lease deed between lessor, sub-lessee and proposed transferee(s) (sub-sub-

lessees). The transferee(s) shall also ensure adherence to the building regulations and directions. All the terms and conditions of the allotment and sub-lease deed shall be applicable and binding on transferee(s) as, well.

(vi) The transferee(s) shall also be required to pay pro-rata lease rent as applicable. The transferee(s) shall be required to make the built-up space functional within one year from the date of Tripartite Sub-lease and submit sufficient documents to the Lessor in proof thereof. Thereafter, extension charges, as applicable, shall be payable.

(vii) All the terms and conditions of the brochure, allotment, permission for grant of transfer, lease deed etc. shall be applicable on the sublessee as well as all transferee(s).

(viii) The sub-lessee is not eligible for any preferential allotment of the residential plot or house under various scheme of NOIDA."

11. As per Clause (III) 14.(h), Sub-Lessee was not allowed to assign or

change his role in the project, in any way, till the completion of the project,

without the prior written permission of the Lessor, which Clause is as

follows:

Company Appeal (AT) (Insolvency) Nos. 424, 434 & 458 of 2022 12 "III.14(h) The sub-lessee shall not be allowed to assign or change his role in the project, in anyway, till the completion of the project, without the prior written permission of the LESSOR. In case of any violation of this, the lease shall be cancelled and entire money deposited shall be forfeited."

12. Clause III.14(p) also contained provisions which entitles Sub-Lessee

to further sub-lease the sports, other facilities and institutional activity,

but only with the prior approval of the Lessor.

13. The Collaboration Agreement dated 13.07.2013 was entered between

the Neo Infrastructure Pvt. Ltd. and Brys International Pvt. Ltd. No prior

approval was obtained from NOIDA for transferring of the rights by Neo

Infrastructure Pvt. Ltd. in favour of Brys International Pvt. Ltd. In the

Collaboration Agreement, development of sales rights were transferred to

developer, i.e., Brys International Pvt. Ltd. on consideration. Clauses 3 and

4 of the Collaboration Agreement is as follows:

"3. GRANT OF DEVELOPMENT AND SALES RIGHTS The Company in order to collaborate hereby transfers Development and Sales Rights of the Company Demised Plot in favour of the Developer and Developer hereby accept the transfer of such Development and Sales Rights, at a consideration provided in Clause 4 of this Agreement and simultaneously with such transfer, the Company hereby cease to have any Development and Sales Rights In the Company Demised Plot except in

Company Appeal (AT) (Insolvency) Nos. 424, 434 & 458 of 2022 13 relation to the Company Allocation, as more, specifically mentioned in this Agreement.

4. CONSIDERATION 4.1 As a consideration for transfer of Development and Sales Rights and in lieu of payment being made by Logix to Noida Authority under the Lease Deed, the Developer shall pay to the Logix, a sum of Rs.20,00,00,000/- (Rupees Twenty Crores Only) as non-refundable security deposit ("Non-

Refundable Security Deposit"). Out of the aforesaid amount of Non-Refundable Security Deposit, the Developer has already paid an amount of Rs.17,50,00,000/- (Rupees Seventeen Crores Fifty Lakhs Only) to the Logix as per the following details:

S. Cheque Amount Bank No. No./Date 1 512702 dated 7,50,00,000/- Bank of 30/03/2013 Baroda 2 251697 dated 5,50,00,000/- Bank of 06/06/2013 Baroda 3 251698 dated 4,50,00,000/- Bank of 06/06/2013 Baroda

4.2. For the balance amount i.e. Rs.2,50,00,000/-

(Rupees Two Crores Fifty Lakhs Only) of Non- Refundable Security Deposit, the Developer is issuing postdated cheques of favour of Logix as per the following details:

S. Cheque Amount Bank No. No./Date 1 000555 dated 85,00,000/- Bank of 11/07/2013 Baroda 2 000556 dated 85,00,000/- Bank of 11/08/2013 Baroda 3 000557 dated 80,00,000/- Bank of 11/09/2013 Baroda"

Company Appeal (AT) (Insolvency) Nos. 424, 434 & 458 of 2022 14

14. The Collaboration Agreement transferred the Sale Rights in the land

without obtaining the approval of the Noida. The Brys International Pvt.

Ltd. in pursuance of the Sale Rights took financial liabilities by allotting

units to various Homebuyers. In the CIRP of Brys International Pvt. Ltd.,

the land which has been leased out, could not be made the subject matter

of the Resolution Plan, nor the leased land could be dealt in the CIRP of

Neo Infrastructure Pvt. Ltd. without there being any prior approval of the

Noida.

15. Now, we come to the CA No.2488 of 2019, in which CA the impugned

order has been passed by the Adjudicating Authority. In CA No.2488 of

2019, Respondent No.1 gave details of Lease Deed and Sub-Lease Deed and

filing of claim by Noida as Financial Creditor in the CIRP of Neo

Infrastructure Pvt. Ltd. It was pleaded in the Application that Resolution

Applicant has submitted a composite Resolution Plan in the CIRP of Neo

Infrastructure Pvt. Ltd. and Brys International Pvt. Ltd. Reference of Clause

5.2.1 of the Plan was made in the Application. It was pleaded that under

the provision of Sub-Lease, the Corporate Debtor, i.e., Neo Infrastructure

Pvt. Ltd. cannot transfer any right to 3rd party without seeking approval of

the Noida. Transferring of the development rights by Neo Infrastructure

Pvt. Ltd. in favour of Brys International Pvt. Ltd. is illegal. Direction was

sought to not accept the Plans, which proposes a composite scheme for the

Corporate Debtor. The relief sought in the Application was to the following

effect:

Company Appeal (AT) (Insolvency) Nos. 424, 434 & 458 of 2022 15 "V. RELIEF SOUGHT In view of the facts mentioned above, the Applicant herein prays that the Hon'ble Tribunal may be pleased to:

a. Direct the Respondent to not accept any resolution plans which propose a composite scheme for the Corporate Debtor and Brys International Pvt Ltd. b. Grant a stay on the voting of the resolution plan which has been submitted by E-Homes Infrastructure Pvt Ltd in the CIRP of the Corporate Debtor;

c. any other relief or reliefs as this Hon'ble Tribunal deems fit;"

16. In the Application several grounds were specifically taken by the

Noida. Some of the grounds from (e) to (i) are as follows:

"(e) Because, the Corporate Debtor cannot transfer, sub-divide, create encumbrance or transfer development rights to any other entity without the express permission of the Applicant. The Applicant has never given any such permission to transfer development rights or any other right to any 3rd party that is not party to the Sub-Lease Deed.

(f) Because, under the existing policy as far as the present plot allotted to the Corporate Debtor is concerned, there is no policy under which a sub-

lessee can transfer development rights to a 3rd party.

(g) Because, any transfer of development rights that may have taken place between the Corporate Debtor and Brys International is illegal and the

Company Appeal (AT) (Insolvency) Nos. 424, 434 & 458 of 2022 16 Applicant reserves the right to take civil as well as criminal remedies for the same.

(h) Because, to give a cloak of legitimacy to a completely illegal transaction (i.e. the transfer of development rights from the Corporate Debtor to Brys international); the Applicant feels that an exercise in consolidation of CIRPs is taking place.

(i) Because, the diversion of development rights is a breach of public trust and it cannot be legalized by consolidation."

17. The Adjudicating Authority heard the Application and considered the

reply submitted by the RP and came to the conclusion that Corporate

Debtor, i.e. Neo Infrastructure Pvt. Ltd. has violated the terms of the Lease

Agreement. The Adjudicating Authority has held that Corporate Debtor

ought to have taken permission from the Noida. The prayers made in the

Application, were consequently allowed.

18. The first submission, which has been pressed by the learned Counsel

for the Appellant that the Application has become infructuous since the

Resolution Plans submitted in CIRP of both the Corporate Debtors were

subsequently approved by the CoC on 28.02.2020. As noted above, the

Application was filed by the Noida much before the Resolution Plans came

to be considered before the CoC. It is true that one of the prayers in the

Application was that Respondent be directed not to consider the composite

Resolution Plans, which prayer made in the Application still survives and

has rightly been considered by the Adjudicating Authority in the impugned

order. The submission of the Appellant that Application has become

Company Appeal (AT) (Insolvency) Nos. 424, 434 & 458 of 2022 17 infructuous cannot be accepted. When it has been pointed out before the

Adjudicating Authority that the terms of the Lease Deed under which the

land was leased out is being violated and the said land is sought to be dealt

in the Resolution Plans, Adjudicating Authority had every jurisdiction to

direct that composite Plan be not considered. It is an admitted fact that no

order was passed by the Adjudicating Authority to consolidate the CIRP of

Corporate Debtor, i.e., Neo Infrastructure Pvt. Ltd. and Brys International

Pvt. Ltd. Clause 5.2.1 of 5th Amended Resolution Plan of Neo Infrastructure

Pvt. Ltd., to which objection was raised by the Noida, needs to be noted,

which is to the following effect:

"5.2.1 Approval of Plan submitted for M/s Brys International Private Limited This Resolution Plan is a comprehensive plan submitted for the development of the Project and shall be read in conjunction with the Resolution Applicant's plan submitted for the resolution of M/s Brys International Private Limited under the corporate insolvency resolution process, as the development of the Project and the resultant success of both the resolution plans are dependent on each other. Accordingly, this Resolution Plan is being submitted with the condition that this Resolution Plan shall come into effect only if Resolution Applicant's Plan submitted for the resolution of M/s Brys International Private Limited is approved by Hon'ble NCLT and confirmed by the appellate authorities/ forums, in the event of any dispute/ litigation regarding the approval/ implementation of such resolution plan.

Company Appeal (AT) (Insolvency) Nos. 424, 434 & 458 of 2022 18

19. With regard to Resolution Plan of Brys International Pvt. Ltd., Clause

5.2.1 is again to the same effect and reads as under:

"5.2.1 Approval of Plan submitted for M/s Neo Infrastructure Pvt. Ltd.

This Resolution Plan is a comprehensive plan submitted for the development of the Project and shall be read in conjunction with the Resolution Applicant's plan submitted for the resolution of M/s Neo Infrastructure Private Limited under the corporate insolvency resolution process, as the development of the Project and the resultant success of both the resolution plans are dependent on each other. Accordingly, this Resolution Plan is being submitted with the condition that this Resolution Plan shall come into effect only if Resolution Applicant's Plan submitted for the resolution of M/s Neo Infrastructure Private Limited is approved by Hon'ble NCLT and confirmed by the appellate authorities/ forums, in the event of any dispute/ litigation regarding the approval/ implementation of such resolution plan."

20. We have noticed above that in the CIRP of Neo Infrastructure Pvt.

Ltd., the Noida was considered as Financial Creditor and in the CIRP of

Brys International Pvt. Ltd., the Financial Creditors are large number of

Homebuyers, whose financial liabilities were undertaken by the Brys

International Pvt. Ltd. The learned Counsel for the Respondent - Noida has

placed reliance on judgment of this Tribunal in Greater Noida Industrial

Development Authority (GNIDA) vs. Roma Unicon Designex Consortium

in Company Appeal (AT) (Insolvency) No. 180 of 2022, where in

paragraph 51, following has been laid down:

Company Appeal (AT) (Insolvency) Nos. 424, 434 & 458 of 2022 19 "51. The Resolution Plan does not confine itself to the development rights, which were granted by the land owning company in favour of the Corporate Debtor on an unregistered Agreement, but also contemplates transfer of title of land in favour of Successful Resolution Applicant/ Special Purpose Company as contemplated in the Resolution Plan, which is an impermissible. The Development Agreement, which was unregistered document, could not have dealt with any right in the Project land and the lease hold right as per Development Agreement continued with the Lessee. Hence, the Resolution Plan could not have provided for transfer of the lease land in favour of Successful Resolution Applicant/ Special Purpose Company. Admittedly, the Appellant was not party to the Development Agreement, which was executed between land holding Company of the Corporate Debtor. The Appellant not being the creditor of the Corporate Debtor nor stakeholder in the CIRP Resolution Plan could not bind the Appellant in any manner. It is also relevant to notice that development agreement dated 09.09.2010 being an unregistered agreement could not have transferred any right in the lease land in favour of the developer. The Appellant not being party to such development agreement, the same is not binding on Appellant."

21. The learned Counsel for the Appellant has also sought to contend

that Adjudicating Authority has no jurisdiction to consider the issues

raised by Noida and they have also placed reliance on judgment of the

Hon'ble Supreme Court in Gujarat Urja Vikas Nigam Ltd. vs. Amit

Gupta and Ors. - (2021) 7 SCC 209. The Hon'ble Supreme Court in the

Company Appeal (AT) (Insolvency) Nos. 424, 434 & 458 of 2022 20 above judgment while considering the ambit and scope of Section 60, sub-

section (5) of the Code, laid down following in paragraph 69:

"69. The institutional framework under IBC contemplated the establishment of a single forum to deal with matters of insolvency, which were distributed earlier across multiple fora. In the absence of a court exercising exclusive jurisdiction over matters relating to insolvency, the corporate debtor would have to file and/or defend multiple proceedings in different fora. These proceedings may cause undue delay in the insolvency resolution process due to multiple proceedings in trial courts and courts of appeal. A delay in completion of the insolvency proceedings would diminish the value of the debtor's assets and hamper the prospects of a successful reorganisation or liquidation. For the success of an insolvency regime, it is necessary that insolvency proceedings are dealt with in a timely, effective and efficient manner. Pursuing this theme in Innoventive [Innoventive Industries Ltd. v. ICICI Bank, (2018) 1 SCC 407 : (2018) 1 SCC (Civ) 356] this Court observed that : (SCC p. 422, para 13) "13. One of the important objectives of the Code is to bring the insolvency law in India under a single unified umbrella with the object of speeding up of the insolvency process."

The principle was reiterated in Arcelor Mittal [ArcelorMittal (India) (P) Ltd. v. Satish Kumar Gupta, (2019) 2 SCC 1] where this Court held that : (SCC p. 88, para 84) "84. ... The non obstante clause in Section 60(5) is designed for a different purpose : to ensure that NCLT alone has jurisdiction when it comes to

Company Appeal (AT) (Insolvency) Nos. 424, 434 & 458 of 2022 21 applications and proceedings by or against a corporate debtor covered by the Code, making it clear that no other forum has jurisdiction to entertain or dispose of such applications or proceedings."

Therefore, considering the text of Section 60(5)(c) and the interpretation of similar provisions in other insolvency related statutes, NCLT has jurisdiction to adjudicate disputes, which arise solely from or which relate to the insolvency of the corporate debtor. However, in doing so, we issue a note of caution to NCLT and NCLAT to ensure that they do not usurp the legitimate jurisdiction of other courts, tribunals and fora when the dispute is one which does not arise solely from or relate to the insolvency of the corporate debtor. The nexus with the insolvency of the corporate debtor must exist."

22. The Hon'ble Supreme Court in the above case has clearly held that

NCLT has jurisdiction to adjudicate dispute which arises solely from or

which relate to the insolvency of the Corporate Debtor. In the facts of the

present case, the NCLT has considered the Application filed by the Noida,

which relate to composite Resolution Plan, which was submitted by the

Resolution Applicant. The judgment of Hon'ble Supreme Court in Gujarat

Urja Vikas Nigam Ltd. (supra) has no application in the facts of the

present case. We do not find any substance in the submission raised on

behalf of the learned Counsel for the RP that Adjudicating Authority had

no jurisdiction in the matter. The submission is wholly unfounded and is

uncalled from the RP, who is duty bound to ensure that provisions of the

Code and Regulations are complied with. When the question that

Company Appeal (AT) (Insolvency) Nos. 424, 434 & 458 of 2022 22 composite Plan submitted by Resolution Applicant for approval, does not

fulfil the criteria and is not valid or legal, the RP cannot be heard in saying

that issues be not looked into by Adjudicating Authority. All acts of RP

should be to ensure that Resolution Plan submitted in CIRP, does not

violate any provision of law and is not in contrary to the interest of stake

holders. The submission on behalf of learned Counsel for the RP that

Adjudicating Authority has no jurisdiction is unfounded submission, which

need to be strongly rejected.

23. One of the submissions raised by the learned Counsel for the

Appellant is that order of Adjudicating Authority is not clear. When the

Adjudicating Authority has allowed CA No.2488 of 2019 filed by the Noida,

the clear intendment of the order is that substantial prayers made in the

Application is allowed. It is true that the prayer with regard to staying the

voting was not relevant at the time when order was passed, but first prayer

in the Application, which was the main prayer of the Application still

survived and has to be given effect to by all concerned.

24. The learned Counsel for Resolution Applicant submits that

Resolution Applicant was not the party to the Application filed by the Noida,

hence, there was violation of principle of natural justice. The RP was

Respondent to the Application, who had also filed a reply opposing the

Application tooth and nail. The RP was clearly supporting his steps taken

in the CIRP, including the Resolution Plan, which he placed before the CoC,

hence, it cannot be said that there was violation of principles of natural

justice. The RP, who has to conduct the entire CIRP and is in-charge of the

Company Appeal (AT) (Insolvency) Nos. 424, 434 & 458 of 2022 23 entire process was impleaded as Respondent and was heard. When we look

into the facts of the present case, it is clear that composite Resolution Plan

submitted with regard to two different Corporate Debtors, whose CIRP is

being conducted by RP simultaneously, without there being any order of

consolidation of the CIRP and Resolution Applicant has submitted a

composite Resolution Plan, dependent on each other, is nothing but clever

device adopted to harm the interest of the stake holders, specially

Respondent No.1

25. In view of the foregoing discussions, we do not find any error in the

impugned order passed by the Adjudicating Authority. There is no merit in

any of the Appeal(s), all the Appeal(s) are dismissed. No order as to costs.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical)

NEW DELHI

15th March, 2023

Ashwani

Company Appeal (AT) (Insolvency) Nos. 424, 434 & 458 of 2022 24