Gaurav Katiyar vs Nisus Finance And Investment Managers ...

(Arising out of the Order dated 02.05.2024 passed by the National Company Law Tribunal, New Delhi, Court-III in I.A. No-5238 of 2023, 4466 of 2023 and 5125/2023 in C.P. N o-1348/ND/2019)

IN THE MATTER OF:

Gaurav Katiyar, Resolution Professional of Earthcon Universal Infra Tech Private Limited Having Office At D-32, East Of Kailash, New Delht-110065 ...Appellant Versus

1. Nisus Finance And Investment Managers LLP Having its registered office at: 201 D, Poonam Chambers A Wing, Dr. Annie Besant Road, Worli, Mumbai-400018, Maharashtra (India) E-Mail: info@nisusfin.com ...Respondent No. 1

2. Beacon Trusteeship Limited Having its registered office at: 4C & D Siddhivinayak Chambers, Gandhi Nagar, Opposite MIG Cricket Club, Bandra (East), Mumbai-400051, Maharashtra (India) E-Mail: compliance@beaconstrustee.co.in ...Respondent No. 2

3. Tulsiani Constructions And Developers Private Limited Having its registered office at: Plot no-3, Block N. Green Park (Main) New Delhi-110016 E-Mail: acc.tedl@gmail.com ...Respondent No. 3

4. Mahesh Kumar Tulsiani Plot no-3 Block N. Green Park (Main) New Delhi-110016 Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

E-Mail: acc.tcdl@gmail.com ...Respondent No. 4

Present

For Appellants: Mr. Rishabh Jain, Adv. & Mr. Gaurav Katiyar (in person), for RP.

For Respondents: Mr. Shikhil Suri, Sr. Advocate along Ms. Prachi Johri, Mr. Saurabh Jha, Mr. Siddhant Katyal, Adv. for R-1.

With Comp. App. (AT) (Ins) No. 969 & 970 of 2024 & I.A. No. 3519, 3521, 3523, 7147, 7148, 7149, 7150 of 2024

(Arising out of the Order dated 02.05.2024 passed by the National Company Law Tribunal, New Delhi, Court-III in I.A No. 5238/2023 & 5125/ 2023 in CP No.(IB) 1348 (ND) /2019)

IN THE MATTER OF:

Consortium of DS Infraheights Pvt. Ltd. & Anand Buildtech Pvt. Ltd. A-119, Sector-63, Gautam Budh Nagar, Noida 201301, Uttar Pradesh ...Appellant Versus

1. M/s Nisus Finance And Investment Infratech Pvt. Ltd. Having its registered office at: 201 D, Poonam Chambers A Wing, Dr. Annie Besant Road, Worli, Mumbai-400018, Maharashtra (India) E-Mail: info@nisusfin.com ...Respondent No. 1

2. Gaurav Kathiyar, Resolution Professional of Earthcon Universal Infra Tech Private Limited Having Office At: 1-17, DDA Flats, Sector 7 Jasola Vihar, New Delhi - 110025. E-Mail: cagauravkathiyar@gmail.com ...Respondent No. 2

Page 2 of 59 Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

3. Committee of Creditors Of M/s Earthcon Universal Infratech Pvt. Ltd. 1-17, DDA Flats, Sector-7 Jasola Vihar, New Delhi - 110025 Email:- cagauravkatiyar@gmail.com ...Respondent No. 3

Present

For Appellants: Mr. P. Nagesh Sr. Advocate along with Mr. Harshal Kumar, Adv.

For Respondents: Mr. Shikhil Suri, Sr. Advocate along Ms. Prachi Johri, Mr. Saurabh Jha, Mr. Siddhant Katyal, Adv. for R-1.

With Comp. App. (AT) (Ins) No. 1175 of 2024 & I.A. No. 7152 of 2024

(Arising out of the Order dated 02.05.2024 passed by the National Company Law Tribunal, New Delhi, Court-III in I.A No. 5125/ 2023, 5238/ 2023 & 4466/2023 in CP No.(IB) 1348 (ND) /2019)

IN THE MATTER OF:

Committee of Creditors Of M/s Earthcon Universal Infratech Pvt. Ltd. Through, Sh. Jawed Ahmad Ansari, S/o Late Habib Ahmad Ansari R/o 371, Laxmi Bai Nagar, New Delhi - 110023. ...Appellant Versus

1. Nisus Finance And Investment Managers LLP Having its registered office at: 201 D, Poonam Chambers A Wing, Dr. Annie Besant Road, Worli, Mumbai-400018, Maharashtra (India) ...Respondent No. 1

2. Gaurav Kathiyar, Resolution Professional

Page 3 of 59 Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

M/s Earthcon Universal Infra Tech Private Limited 1-17, DDA Flats, Sector-7 Jasola Vihar, New Delhi - 110025. ...Respondent No. 2

3. Consortium of DS Infraheights Pvt. Ltd. & Anand Buildtech Pvt. Ltd. A-119, Sector-63, Gautam Budh Nagar, Noida 201301, Uttar Pradesh ...Respondent No. 3

Present

For Appellants: Mr. Amit Sibal, Sr. Adv. with Mr. Mrinal Harsh Vardhan, Mr. Rituparna Patra, Akankrita Sinha, Adv

For Respondents: Mr. Shikhil Suri, Sr. Advocate along Ms. Prachi Johri, Mr. Saurabh Jha, Mr. Siddhant Katyal, Adv. for R-1.

With Comp. App. (AT) (Ins) No. 1176 of 2024 & I.A. No. 7153 of 2024

(Arising out of the Order dated 02.05.2024 passed by the National Company Law Tribunal, New Delhi, Court-III in I.A No. 5125/ 2023, 5238/ 2023 & 4466/2023 in CP No.(IB) 1348 (ND) /2019)

IN THE MATTER OF:

Committee of Creditors Of M/s Earthcon Universal Infratech Pvt. Ltd. Through, Sh. Jawed Ahmad Ansari, S/o Late Habib Ahmad Ansari R/o 371, Laxmi Bai Nagar, New Delhi - 110023. ...Appellant Versus

1. Nisus Finance And Investment Managers LLP Having its registered office at: 201 D, Poonam Chambers A Wing, Dr. Annie Besant Road, Worli, Mumbai-400018, Maharashtra (India) ...Respondent No. 1

Page 4 of 59 Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

2. Gaurav Kathiyar, Resolution Professional M/s Earthcon Universal Infra Tech Private Limited ...Respondent No. 2 1-17, DDA Flats, Sector-7 Jasola Vihar, New Delhi - 110025.

3. Consortium of DS Infraheights Pvt. Ltd. & Anand Buildtech Pvt. Ltd. A-119, Sector-63, Gautam Budh Nagar, Noida ...Respondent No. 3 201301, Uttar Pradesh

Present

For Appellants: Mr. Amit Sibal, Sr. Adv. with Mr. Mrinal Harsh Vardhan, Mr. Rituparna Patra, Akankrita Sinha, Adv

For Respondents: Mr. Shikhil Suri, Sr. Advocate along Ms. Prachi Johri, Mr. Saurabh Jha, Mr. Siddhant Katyal, Adv. for R-1.

With Comp. App. (AT) (Ins) No. 1174 of 2024 & I.A. No. 4192, 4193, 4701, 5504, 7151 of 2024

(Arising out of the Order dated 02.05.2024 passed by the National Company Law Tribunal, New Delhi, Court-III in I.A No. 5125/ 2023, 5238/ 2023 & 4466/2023 in CP No.(IB) 1348 (ND) /2019)

IN THE MATTER OF:

Committee of Creditors Of M/s Earthcon Universal Infratech Pvt. Ltd. Through, Sh. Jawed Ahmad Ansari, S/o Late Habib Ahmad Ansari R/o 371, Laxmi Bai Nagar, New Delhi - 110023. ...Appellant Versus

1. Nisus Finance And Investment Managers LLP Having its registered office at: 201 D, Poonam Chambers A Wing, Dr. Annie Besant Road, Worli, Mumbai-400018, Maharashtra (India) ...Respondent No. 1

Page 5 of 59 Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

2. Gaurav Kathiyar, Resolution Professional M/s Earthcon Universal Infra Tech Private Limited 1-17, DDA Flats, Sector-7 Jasola Vihar, New Delhi - 110025. ...Respondent No. 2

3. Consortium of DS Infraheights Pvt. Ltd. & Anand Buildtech Pvt. Ltd. A-119, Sector-63, Gautam Budh Nagar, Noida 201301, Uttar Pradesh ...Respondent No. 3

4. Tulsiani Constructions And Developers Private Limited Having its registered office at: Plot no-3, Block N. Green Park (Main) New Delhi-110016 E-Mail: acc.tedl@gmail.com ...Respondent No. 4

Present

For Appellants: Mr. Amit Sibal, Sr. Adv. with Mr. Mrinal Harsh Vardhan, Mr. Rituparna Patra, Akankrita Sinha, Adv

For Respondents: Mr. Shikhil Suri, Sr. Advocate along Ms. Prachi Johri, Mr. Saurabh Jha, Mr. Siddhant Katyal, Adv. for R-1.

JUDGEMENT

(21.07.2025)

NARESH SALECHA, MEMBER (TECHNICAL)

1. There are eight appeals with 18 IAs before us arising out of three Impugned

Orders dated 02.05.2024 under section 61 of the Insolvency & Bankruptcy Code,

2016 (in short 'Code') passed by National Company Law Tribunal, New Delhi

Bench, (in short 'Adjudicating Authority') in IA No. 5238 of 2023 in C.P. No-

Page 6 of 59

Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

1348/ND/2019, IA No. 4466 of 2023 in C.P. No-1348/ND/2019 and IA No. 5125

of 2023 in C.P. No-1348/ND/2019.

2. Details of IAs dealt by the Adjudicating Authority in the three impugned

order dated 02.05.2024 are as follows:

(i) IA-5238/2023 in IB-1348/ND/2019- M/s. Nisus Finance &

Investment Managers LLP & Anr. challenged the Resolution Plan for M/s.

Earthcon Universal Infratech Pvt. Ltd. under the code alleging the

Successful Resolution Applicant (SRA), a consortium of M/s. D.S.

Infraheights Pvt. Ltd. and M/s. Anand Buildtech Pvt. Ltd., was ineligible

due to misrepresentations. Issues included false claims about the "Luvnest"

project (developed by another entity per RERA), incomplete "Urban

Woods" project with illegal constructions, and an invalid HDFC Bank

commitment letter, reducing the SRA's claimed project delivery below the

10,00,000 sq. ft. eligibility threshold. The Adjudicating Authority allowed

IA-5238/2023, rejecting the Resolution Plan for non-compliance with the

provisions of the Code, and ordered the Resolution Professional to issue a

fresh Form G and expedite the approval process. The Adjudicating

Authority also allowed the SRA to resubmit with accurate information, and

the CoC to reassess the Performance Bank Guarantee. The CIRP timeline

was extended.

(ii) IA-5144/2023, IA-5145/2023, IA 4466/2023- The applications (IA-

5144/2023 and IA-5145/2023) were filed by GNIDA against the

Page 7 of 59 Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

Resolution Professional and Committee of Creditors in the insolvency case

of Earthcon Universal Infratech Pvt. Ltd. under Section 7 of the Code.

GNIDA sought recognition as a secured creditor, revision of admitted

claim amounts, inclusion of its dues in the Resolution Plan, and quashing

of actions not treating it as a secured creditor. It also requested IBBI to

examine the Resolution Professional's conduct. IA No. 4466/2023 sought

approval of the Resolution Plan by the Resolution Professional. The

Adjudicating Authority disposed of all applications vide order dated

02.05.2024, referring them back to the CoC for reconsideration. The

Adjudicating Authority noted that in IA No. 5238/2023, the Resolution

Plan was rejected due to objections by M/s. Nisus Finance & Investment

Managers LLP & Anr., and thus, IA-4466/2023 was also disposed of.

(iii) IA-5125/2023 in IB-1348/ND/2019- The application, filed by M/s.

Tulsiani Constructions and Developers Private Limited & Anr. under

Section 60(5) of the Code, and Rule 11 of the NCLT Rules, 2016, sought

to bring certain facts before the Adjudicating Authority, for appropriate

orders in the matter of M/s. Earthcon Universal Infratech Private Limited

(Corporate Debtor). The application was related to the insolvency case (IB-

1348/ND/2019) involving M/s. Nisus Finance & Investment Managers

LLP & Anr. as Financial Creditors. The IA No. 5125/2023 was disposed

of vide this order dated 02.05.2024.

3. Now, we will take up the appeals filed before us.

Page 8 of 59

Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

Company Appeal (AT) (Ins.) No. 963-965 of 2024

4. This appeal has been filed by the Appellant i.e. Gaurav Katiyar, who is the

Resolution Professional of M/s Earthcon Universal lnfratech Private Limited

(hereinafter referred to as "Corporate Debtor"), against the Impugned Order dated

02.05.2024, passed by the NCLT-New Delhi-III (hereinafter referred to as

"Adjudicating Authority") in I.A. No. 5238 of 2023 in Company Petition IB No.

1348/ND/2019, I.A. No. 4466 of 2023 in Company Petition IB No.

1348/ND/2019 and I.A No. 5125 of 2023 in Company Petition IB No.

1348/ND/2019.

5. Nisus Finance and Investment Managers LLP, who was the Financial

Creditor of the CD, is the Respondent No.1 herein.

Beacon Trusteeship Limited, who was the Financial Creditor of the CD, is the

Respondent No.2 herein.

Tulsiani Constructions and Developers Private Limited, who has claimed to be a

majority shareholder of 75%, is the Respondent No.3 herein.

Mahesh Kumar Tulsiani, who is the Nominee Director of Respondent No.3

(Tulsiani Constructions and Developers Private Limited) in M/s Shreehari

RealtechPvt. Ltd. is the Respondent No.4 herein.

Company Appeal (AT) (Ins.) No.969-970 of 2024

6. This appeal has been filed by the Appellant i.e. Consortium of DS

Infraheights Pvt. Ltd. & Anand Buildtech Pvt. Ltd., who is the successful

Page 9 of 59 Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

Resolution Applicant of M/s Earthcon Universal lnfratech Private Limited i.e.

Corporate Debtor, against the Impugned Order dated 02.05.2024, passed by the

Adjudicating Authority in I.A. No. 5238 of 2023 in Company Petition IB No.

1348/ND/2019 and I.A No. 5125 of 2023 in Company Petition IB No.

1348/ND/2019.

7. Nisus Finance and Investment Infratech Pvt. Ltd., who was the Financial

Creditor of the CD, is the Respondent No.1 herein.

Gaurav Kathiyar, who was the Resolution Professional, is the Respondent No.2

herein.

Committee of Creditors of M/s Earthcon Universal Infratech Pvt. Ltd., is the

Respondent No. 3 herein.

Company Appeal (AT) (Ins.) No.1174,1175,1176 of 2024

8. These three appeals have been filed by the Appellant i.e. Committee of

Creditors of M/s Earthcon Universal Infratech Pvt. Ltd., against the Impugned

Order dated 02.05.2024, passed by the Adjudicating Authority in I.A. No. 5238

of 2023 in Company Petition IB No. 1348/ND/2019, I.A No. 4466 of 2023 in

Company Petition IB No. 1348/ND/2019 and 5125/ 2023 in CP No. (IB) 1348

(ND) /2019).

9. M/s Nisus Finance and Investment Infratech Pvt. Ltd., who was the

Financial Creditor of the CD, is the Respondent No.1 herein.

Gaurav Kathiyar, who was the Resolution Professional, is the Respondent No.2

herein.

Page 10 of 59

Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

Consortium of DS Infraheights Pvt. Ltd. & Anand Buildtech Pvt. Ltd., who is the

successful Resolution Applicant of the CD, is the Respondent No. 3 herein.

Pleadings of the Parties

10. We note that all these appeals are related to approval/ rejection of the

Resolution Plan and connected matters. We find that pleadings by the Resolution

Professional, CoC and Consortium/ SRA are almost similar justifying the

Resolution Plan and have challenged the Impugned Order rejecting the

Resolution plan approved by the CoC. We shall refer them collectively as

"parties supporting Resolution Plan" hereinafter for the sake of convenience and

clarity.

Similarly, we find that Nisus Finance and Investment Managers LLP,

Beacon Trusteeship Limited, Tulsiani Constructions and Developers Private

Limited and Mahesh Kumar Tulsaini, have been opposing the Resolution Plan

and have supported the Impugned Order rejecting the Resolution Plan. We shall

refer them as "parties opposing the Resolution Plan" hereinafter for sake of

convenience and clarity.

11. We shall deal pleadings of "parties supporting Resolution Plan" and

"parties opposing the Resolution Plan" in conjoint manner for the sake of

brevity and avoidance of repetition of arguments.

12. The "parties supporting Resolution Plan" contended that, pursuant to Form

G issued on 10.05.2023 by Resolution Professional inviting EoI, the SRA

submitted its EoI and was included in the list of eligible PRAs on 08.06.2023. Page 11 of 59

Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

The "parties supporting Resolution Plan" further submitted that SRA's

Resolution Plan, submitted to Resolution Professional, was placed before the

CoC in the 26th CoC meeting, was approved by the CoC with 70.18% voting

share. The "parties supporting Resolution Plan" submitted that Resolution

Professional issued a Letter of Intent (LoI) on 19.08.2023, and the SRA furnished

a bank guarantee of Rs. 2.5 crores, as required. The "parties supporting

Resolution Plan" submitted that the project, slated for completion by 2014, was

abandoned by the Corporate Debtor's promoters, who siphoned off Rs. 190

Crores, prompting FIRs and a charge sheet.

13. The "parties supporting Resolution Plan" submitted that the Adjudicating

Authority's rejection of the Resolution Plan, approved by the CoC with a 70.18%

voting share, was based on erroneous grounds: (a) failure to deliver 10,00,000 sq.

ft. in the last five financial years, (b) alleged falsity of Rs. 20 crores commitment

letter from HDFC Bank, (c) reliance on a FIR dated 16.12.2022 filed against the

SRA, and (d) alleged non-disclosures by SRA in the Resolution Plan. The "parties

supporting Resolution Plan" contended that these grounds are contrary to the

record and unsupported by evidence.

14. The "parties supporting Resolution Plan" submitted that during 26 th CoC

meeting, the Resolution Professional placed all objections raised by Nisus

Finance and Investment Managers LLP before the CoC, but representative of

Nisus Finance and Investment Managers LLP, remained silent and raised no

concerns. The "parties supporting the Resolution Plan" contended that Nisus's

Page 12 of 59 Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

subsequent objections in IA No. 5238/2023 are inconsistent and opportunistic,

especially given its failure to raise issues during the CoC deliberations.

15. The "parties supporting Resolution Plan" submitted that the CIRP is a

collective bargaining process, and the CoC, by a 70.18% majority, trusted the

SRA's credentials, feasibility, viability, and capability, approving the Resolution

Plan. The "parties supporting Resolution Plan" contended that this decision falls

squarely within the CoC's commercial wisdom, as held in K. Sashidhar v. Indian

Overseas Bank (2019) 102 taxmann.com 139 (SC), Jaypee Kensington

Boulevard Apartments Welfare Association v. NBCC (India) Ltd. (2021) 125

taxmann.com 360 (SC), and SP Coal Resources Pvt. Ltd. v. Indus FILA Ltd. (TA

(AT) No. 13 of 2021). The "parties supporting Resolution Plan" further submitted

that the assessment of asset maximization is a subjective matter for the CoC, and

the Adjudicating Authority's interference was impermissible.

16. The "parties supporting Resolution Plan" submitted that the CoC-approved

eligibility criteria required PRAs to have committed funds of Rs. 20 crores

available for investment/deployment as of the Effective Date (within 90 days

from plan approval), supported by proof of funds with the EoI. The "parties

supporting Resolution Plan" contended that the Adjudicating Authority

misconstrued this requirement by implying that the funds needed to be blocked

during the interregnum from EoI submission to the Effective Date, in addition to

the Rs. 2.5 crore bank guarantee. The Appellant further submitted that such an

Page 13 of 59 Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

interpretation is commercially impractical and contrary to a prudent

businessman's assessment of credentials.

17. The "parties supporting Resolution Plan" submitted that the Resolution

Professional verified the Rs. 20 crore commitment letter's authenticity with

HDFC Bank via email dated 10.08.2023, with the bank confirming its validity.

The "parties supporting Resolution Plan" contended that the Adjudicating

Authority's finding that the commitment letter was "false and baseless" is

contrary to this evidence and unsupported by any substantiation from Nisus.

18. The "parties supporting Resolution Plan" contended that no objection was

raised by any stakeholder, including Nisus Finance and Investment Managers

LLP, regarding the credentials of the SRA at the stage of issuing the provisional

and final lists of PRAs.

19. The "parties supporting Resolution Plan" submitted that Nisus Finance and

Investment Managers LLP and Beacon Trusteeship Limited approached the

Adjudicating Authority in I.A. No. 5238/2023 in collusion with Mr. Shadab

Khan, the ex-director and shareholder of the Corporate Debtor, to facilitate a

backdoor entry for Mr. Khan. The "parties supporting Resolution Plan"

contended that Nisus Finance and Investment Managers LLP and Beacon

Trusteeship Limited never raised doubts regarding the SRA's credentials during

the CIRP or negotiation process. Their objections in I.A. No. 5238/2023 were

filed at the behest of Mr. Shadab Khan, who provided annexures/emails to

challenge the SRA's credentials, with the intent to derail the CoC-approved

Page 14 of 59 Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

resolution plan. The "parties supporting Resolution Plan" submitted that Mr.

Shadab Khan, was disqualified under Section 29A(g) of the Code vide order dated

21.12.2023 in I.A. No. 3895/2021 and 3899/2021 Company Petition IB No.

1348/ND/2019, and was ineligible to submit a resolution plan, rendering the

objections raised by Nisus Finance and Investment Managers LLP and Beacon

Trusteeship Limited mala fide. The "parties supporting Resolution Plan"

contended that during the CoC meeting considering the resolution plan, the

representative, Mr. Amit Goenka of Nisus Finance and Investment Managers

LLP and Beacon Trusteeship Limited failed to raise any objections, further

indicating that their grievances were instigated by Mr. Shadab Khan and lacked

merit.

20. The "parties supporting Resolution Plan" contended that the eligibility

criteria allowed funds to be sourced from various modes, including own sources,

financial institutions, or SWAMIH Investment Fund. The SRA further secured a

term sheet dated 13.12.2023 from SWAMIH Investment Fund I to invest up to

Rs. 255.3 Crores, demonstrating its financial capability.

21. The "parties supporting Resolution Plan" submitted that objections raised

by Sh. Col. Sudheer Kumar, an estranged homebuyer, on 10.08.2023 and

16.08.2023, at the instance of Mr. Shadab Khan, misconstrued the eligibility

criteria by demanding a sanction letter instead of a commitment letter, which was

adequately addressed by HDFC Bank's response on 19.08.2023.

Page 15 of 59

Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

22. The "parties supporting Resolution Plan" submitted that the eligibility

criteria required PRAs to have delivered at least 10 lakh square feet of super area

between FY 2017-18 and FY 2021-22. The SRA submitted four certificates

(Electricity NoC, Fire Safety NoC, Lift Installation NoC, and Structural Safety

Certificate) to substantiate its work experience, which were verified by the

Resolution Professional.

23. The "parties supporting Resolution Plan" stated that Section 15A of the

Uttar Pradesh Urban Planning and Development Act, 1973 and the UP RERA

order dated 16.09.2019 provide for "deemed completion" if the authority fails to

issue or refuse a completion certificate within stipulated period of the notice of

completion. The SRA's eligibility was assessed based on these provisions and

certificates.

24. The "parties supporting Resolution Plan" submitted that the eligibility

criteria do not mandate that a PRA's work experience be assessed solely based

on Occupancy Certificates or Completion Certificates, nor do they contain an

exclusion clause disqualifying work experience without such certificates. The

"parties supporting Resolution Plan" contended that the Adjudicating Authority's

reliance on the absence of such certificates to conclude that the SRA failed to

deliver 10,00,000 sq. ft. was erroneous. The "parties supporting Resolution Plan"

further submitted that Anand Buildtech Pvt. Ltd., a consortium member, has

delivered over 10,00,000 sq. ft., as evidenced by its profile

Page 16 of 59 Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

25. The "parties supporting Resolution Plan" submitted that the demolition

order dated 21.12.2022 by the Lucknow Development Authority (LDA) was

limited to unauthorized constructions (e.g., office and sample flat in setback area,

walls affecting parking, etc.) and did not affect the entire 4,17,922 square feet of

the Urban Woods project of SRA. The "parties supporting Resolution Plan"

contended that the Adjudicating Authority erred in relying on the demolition

order to negate the SRA's work experience, as the order pertained only to specific

unauthorized constructions, which are common in real estate projects for

commercial expediency (e.g., sample flats, sales offices).

26. The "parties supporting Resolution Plan" submitted that the Resolution

Professional personally visited the Urban Woods project in Lucknow and

confirmed that it is fully constructed, delivered, operational, well-maintained, and

occupied by residents. The "parties supporting Resolution Plan" contended that

the Adjudicating Authority's failure to consider this verification undermines its

finding that the SRA lacked requisite work experience. The "parties supporting

Resolution Plan" further submitted that the CoC, aware of the project's "deemed

completion" status, accepted the SRA's credentials, supported by affidavits,

photographs, and electricity bills paid by residents.

27. The "parties supporting Resolution Plan" contended that the FIR dated

16.12.2022 filed by Mr. Manoj Kumar, relied upon by the Adjudicating

Authority, was neither related to the Urban Woods project nor the SRA, rendering

its consideration baseless.

Page 17 of 59

Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

28. The "parties supporting Resolution Plan" submitted that Nisus Finance and

Investment Managers LLP failed to provide substantive evidence to challenge the

SRA's credentials including the Urban Woods project's completion. The "parties

supporting Resolution Plan" contended that the Adjudicating Authority's reliance

on irrelevant documents (e.g., FIR, demolition order) and disregard for the

Resolution Professional's verification of the commitment letter and project status

constitute a miscarriage of justice.

29. The "parties supporting Resolution Plan" submitted that the CoC, with a

70.18% majority, approved the SRA's resolution plan, finding it feasible, viable,

and credible, which falls within the CoC's commercial wisdom as per the Hon'ble

Supreme Court's ruling in K. Sashidhar v. Indian Overseas Bank [2019] 102

taxmann.com 139 (SC). The "parties supporting Resolution Plan" contended that

the Adjudicating Authority misdirected itself by interfering with the CoC's

commercial wisdom, which encompasses the assessment of the SRA's feasibility,

viability, and capability to implement the resolution plan.

30. The "parties supporting Resolution Plan" submitted that the SRA claimed

a developed area of 14,73,215 square feet in its EoI/Resolution Plan, exceeding

the eligibility criteria of 10 lakh square feet. Even if the 1,46,803 square feet of

the Luv Nest project is excluded, the SRA fulfils the eligibility criteria. The

"parties supporting Resolution Plan" contended that the Luv Nest project was not

the sole basis for verifying the SRA's eligibility, and the Resolution Professional

duly considered other credentials.

Page 18 of 59

Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

31. Concluding the arguments, the "parties supporting Resolution Plan"

requested this Appellate Tribunal to set aside the Impugned Order which rejected

the approval of the Resolution Plan and allow their appeals.

32. Per contra, the "parties opposing Resolution Plan" denied all averments

made by the "parties supporting Resolution Plan" as misleading and baseless and

submitted that the impugned order dated 02.05.2024 rejecting the Resolution Plan

is a detailed and well-reasoned decision, arrived at after considering all

contentions and evidence, and the Adjudicating Authority correctly found that the

SRA was ineligible under the CoC-approved eligibility criteria, and the order

requires no interference.

33. The "parties opposing Resolution Plan" submitted that the Adjudicating

Authority rightly rejected the resolution plan on the ground that the SRA failed

to demonstrate the capability to infuse Rs.20 Crores, as required by the eligibility

criteria in Form-G. The commitment letter from HDFC Bank, relied upon by the

SRA, neither constituted a sanction letter nor served as evidence of fund

availability. The "parties opposing Resolution Plan" contended that an email

dated 19.08.2023 from HDFC Bank to Col. Sudheer Kumar, in response to his

query dated 16.08.2023, explicitly clarified that the commitment letter did not

constitute a sanction letter or evidence of fund disbursement, and that sanction

processes are contingent on the borrower meeting financial criteria. The "parties

opposing Resolution Plan" submitted that the SRA has not furnished any

document to substantiate compliance with the Rs. 20 Crores eligibility criterion.

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The eligibility criteria mandated proof of available funds at the EoI stage, and the

"parties supporting Resolution Plan" interpretation, allowing funds to be infused

within 90 days post-approval, misconstrues the criteria and jeopardizes

stakeholder interests.

34. The "parties opposing Resolution Plan" contended that the non-binding

term sheet dated 13.12.2023 from SWAMIH Investment Fund I, cited by the

SRA, was not disclosed earlier and lacks legally enforceable obligations. Its

introduction in the appeal, absent in the SRA's appeal, suggests the SRA's

malfeasance and intent to mislead homebuyers, indicating collusion with the

SRA.

35. The "parties opposing Resolution Plan" submitted that the SRA failed to

meet the eligibility criterion of delivering 10 lakh square feet of super area in the

last five financial years (FY 2017-18 to 2021-22). The SRA claimed experience

from projects Luv Nest and Urban Woods, but the RERA website showed that

Luv Nest was developed by M/s. Shreehari Realtech Pvt. Ltd., not the SRA,

reducing the claimed area of SRA by 1,46,803 square feet. The "parties opposing

Resolution Plan" contended that the Urban Woods project, developed by M/s. D

S Infraheights Pvt. Ltd., lacks a completion certificate (CC) or occupancy

certificate (OC) as of 19.08.2023, per RTI responses from the LDA dated

19.08.2023 and 01.09.2023. This incomplete status disqualifies 4,17,922 square

feet from the SRA's claimed experience. The "parties opposing Resolution Plan"

submitted that, after deducting 5,64,725 square feet (Luv Nest and Urban

Page 20 of 59 Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

Woods), the SRA's remaining claimed area of 9,08,490 square feet lacks

substantiation. The SRA's involvement in these projects appears limited, possibly

as a contractor, failing to meet the eligibility criteria.

36. The "parties opposing Resolution Plan" contended that the "parties

opposing Resolution Plan" reliance on Section 15A of the Uttar Pradesh Urban

Planning and Development Act, 1973, for "deemed completion" is misplaced.

Section 15A requires a notice of completion to the authority, which the SRA did

not submit to LDA. The UP-RERA office order dated 16.09.2019 also mandates

such an application, which was not made by SRA, likely due to construction

irregularities. This was further vitiated by the FIR filed by Uttar Pradesh Awas

Vikas Parishad, which confirms illegal possession without approvals, and by the

absence of a notice of completion to the authority, rendering the deeming

provision inapplicable.

37. The "parties opposing Resolution Plan" contended that the Resolution

Professional's argument that the SRA meets the 10 lakh square feet eligibility

criterion even if the 1,46,803 square feet of Luv Nest is excluded, is untenable.

The resolution plan, approved by the CoC, was based on the full 14,73,215 square

feet, and any post facto exclusion would require de novo voting and approval,

which is not permissible.

38. The "parties opposing Resolution Plan" submitted that the Resolution

Professional's averment about dismissing the FIR dated 16.12.2022 filed by Mr.

Manoj Kumar as irrelevant, is misleading. The FIR was filed by Mr. Manoj

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Kumar in his official capacity as Assistant Engineer, Uttar Pradesh Awas Vikas

Parishad, a statutory organization, against Mr. Shashank Gupta, Chairman of

Shreehari Realtech Pvt. Ltd., specifically for the Luv Nest project at 11 GH/03,

Vrindavan Yojna No. 3, Sector-11, Lucknow, the very project whose credentials

were misused by the SRA. The "parties opposing Resolution Plan" contended

that the FIR dated 16.12.2022, filed by Mr. Manoj Kumar, confirms that

possession of flats in Luv Nest was given without a CC, in contravention of law,

by M/s. Shreehari Realtech Pvt. Ltd., whose director, Mr. Shashank Gupta, is also

a director of D S Infraheights Pvt. Ltd., further evidencing the SRA's

misrepresentations.

39. The "parties opposing Resolution Plan" submitted that the "parties

supporting Resolution Plan" allegations of collusion with Mr. Shadab Khan, the

ex-director, are baseless and unsubstantiated and thus have initiated multiple legal

proceedings against Mr. Shadab Khan and related entities, including, A complaint

under Section 138 of the Negotiable Instruments Act before the Metropolitan

Magistrate, Mumbai; A complaint for economic offences at Saket Court, Delhi;

An execution application at the Hon'ble Bombay High Court for an arbitral award

of Rs. 74,44,12,398; A contempt petition for disobeying court orders dated

September 2019, 27.02.2020, and 27.06.2022.

40. The "parties opposing Resolution Plan" submitted that the Resolution

Professional failed to perform its duties by overlooking the SRA's ineligibility,

despite being aware of misrepresentations regarding financial capability and work

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experience. This conduct of Resolution Professional is detrimental to the

Corporate Debtor and its stakeholders, indicating collusion with the SRA.

41. The "parties opposing Resolution Plan" submitted that the resolution plan

was approved by homebuyers, who constituted the majority of the CoC, but was

rejected by all institutional creditors, including Greater Noida Industrial

Development Authority and Punjab & Sindh Bank. The homebuyers' approval

was influenced by the SRA's misrepresentations, which the CoC/Resolution

Professional deliberately overlooked.

42. The "parties opposing Resolution Plan" contended that the CoC's approval

does not immunize the resolution plan from scrutiny, as the SRA's ineligibility

renders the plan inadmissible and reliance on K. Sashidhar v. Indian Overseas

Bank (Supra) is misconstrued, as commercial wisdom does not extend to

approving plans by ineligible applicants.

43. The "parties opposing Resolution Plan" contended that allegation that

earlier resolution plans failed due to their litigation is irrelevant, as those plans

were withdrawn by the resolution applicants themselves, e.g., Saya Homes Pvt.

Ltd. via I.A. No. 3301/2021.

44. The parties opposing Resolution Plan submitted that the SRA made glaring

misrepresentations in its Resolution Plan by claiming involvement in Luvnest and

Urban Woods and asserting delivery of 10,00,000 sq. ft. The parties opposing

Resolution Plan contended that these false declarations by SRA, coupled with the

lack of documentary evidence for other projects, violate Regulation 39(1)(c) of

Page 23 of 59 Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations,

2016, which mandates true and correct information in the Resolution Plan and

discovery of false information renders the SRA as ineligible to continue in the

CIRP and liable for penal action under the Code.

45. The Tulsiani Constructions and Developers Private Limited submitted that

the they hold a 75% majority shareholding in M/s Shreehari Realtech Pvt. Ltd.,

and Mahesh Kumar Tulsaini was its nominee director in the said company,

establishing their legitimate interest in the matter. Thus, further contended that

the crux of their application in I.A. No. 5125/2023 was to challenge the

Successful Resolution Applicant's misrepresentation regarding its eligibility,

particularly the false claim of delivering 14,73,215 square feet, including

1,46,803 square feet from the "Luv Nest" project of Shreehari Realtech Pvt. Ltd.,

as Shreehari Realtech Pvt. Ltd. is neither part of the SRA consortium nor has it

authorized any entity to use the credentials of its Luv Nest project, rendering the

SRA's representation unauthorized and fraudulent. They, further submitted that

the Luv Nest project has not been successfully delivered, as evidenced by FIR

No. 0710/2023 (District Lucknow - East, P.S. PGI), filed by officials of Uttar

Pradesh Awas Vikas Parishad against Mr. Shashank Gupta, Chairman of

Shreehari Realtech Pvt. Ltd., for illegally providing possession of flats without

obtaining a completion certificate (CC) from the competent authority, in violation

of applicable rules. Thus, also contended that Shreehari Realtech Pvt. Ltd. applied

for an OC and CC, but the application was returned with objections, and no fresh

Page 24 of 59 Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

application has been filed after curing these objections. Consequently, there is no

"deemed completion" under RERA regulations, further invalidating the SRA's

claim.

46. The parties opposing Resolution Plan submitted that approving the SRA

Resolution Plan, tainted by misrepresentations and ineligibility, would be

detrimental to the interests of all stakeholders, including homebuyers and

financial creditors like Nisus Finance and Investment Managers LLP and further

contended that the impugned order protects the integrity of the CIRP by rejecting

an ineligible plan of SRA and directing the Resolution Professional to issue a

fresh Form G, aligning with the Code's objective of ensuring a fair and

transparent process.

47. Concluding their arguments, "the parties opposing the Resolution Plan"

requested this Appellate Tribunal to dismiss the Appeals of parties supporting

Resolution Plan with cost.

Findings

48. We note that the Corporate Insolvency Resolution Process (CIRP) of the

Corporate Debtor commenced on 08.01.2020, on an application filed under

section 7 of the Code filed by the financial creditor Nisus Finance and Investment

Managers LLP against the Corporate Debtor. We further note that the Appellant

contended that the Resolution Professional published Form-G four times, and the

Committee of Creditors (CoC) approved resolution plans on three occasions

Page 25 of 59 Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

(May 2020, June 2022, and August 2023). However, the plans approved in May

2020 and June 2022 could not materialize due to litigation between the parties. In

the third round, Form-G was published on 13.04.2023, with an amended Form-G

on 10.05.2023 to extend timelines for Expressions of Interest (EoI). Out of 10

EoIs received, only 6 were found eligible, and a provisional list of Prospective

Resolution Applicants (PRAs) was issued on 27.05.2023, followed by a final list

on 08.06.2023, in compliance with Regulation 36A(10) of the IBBI (CIRP)

Regulations, 2016.

49. The Resolution Professional issued the Request for Resolution Plan

(RFRP), Information Memorandum (IM), and Evaluation Matrix to PRAs under

Regulation 36B (1) of the IBBI (CIRP) Regulations, 2016. Only two resolution

plans were received, of which the plan submitted by the Consortium of M/s. D S

Infraheights Private Limited and Anand Buildtech Private Limited was approved

by the CoC with a 70.18% majority on 27.05.2023.

50. The Resolution Professional filed I.A. No. 4466/2023 under Section 30(6)

of the Code on 22.08.2023 for approval of the resolution plan. However, Nisus

Finance and Investment Managers LLP and Beacon Trusteeship Limited filed

I.A. No. 5238/2023, raising objections, which were allowed by the Adjudicating

Authority vide the Impugned Order dated 02.05.2024, passed in I.A. No.4466 of

2023 and I.A. No.5238 of 2023 in Company Petition IB No. 1348/ND/2019,

rejecting the resolution plan.

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51. Based on averments of the parties in all the eight appeals and material

available, following issues are required to be examined and determined in order

to decide these appeals.

(I) (a) Whether, the experience taken by consortium (DS Infra Heights Private

Limited and Anand Buildtech Private Limited) of Luv Nest Project developed by

M/s Shree Hari Realtech Pvt. Ltd. could have been counted by consortium based

on stipulated eligibility criteria.

(b) Whether, the consortium has delivered at least 10 Lakhs sq. ft. super area as

per the stipulated eligibility criteria No. 3 of EoI.

(II) Whether, the consortium met the financial eligibility criteria of Rs. 20

Crore "Committed Funds" as per eligibility criteria No. 7 of EoI.

52. All these issues will depend upon the eligibility criteria stipulated,

documents asked from PRAs in support of their eligibility and submission of such

document by the consortium in order to meet these stipulated eligibility criteria

to become SRA.

Hence, we shall refer to eligibility criteria which reads as under :-

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53. Similarly, the supporting documents have also been asked by the

Resolution Professional from all Resolution Applicants to be attached with EoI

as per Annexure B of EoI, which reads as under :-

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54. Issue No. I (a) Whether, the experience taken by consortium (DS Infra

Heights Private Limited and Anand Buildtech Private Limited) of Luv Nest

Project developed by M/s Shree Hari Realtech Pvt. Ltd. could have been

counted by consortium based on stipulated eligibility criteria.

(b) Whether, the consortium has delivered at least 10 Lakhs sq. ft. super area

as per the stipulated eligibility criteria No. 3 of EoI.

(i) Having noted the eligibility criteria, it would be desirable to understand as

to who were eligible to submit the EoI. It becomes clear that the

Page 31 of 59 Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

prospective Resolution Applicant could have been a consortium.

According to eligibility criteria, a PRA may form a consortium and in

eligibility criteria No. II, it has been specifically stipulated that all other

mentioned technical and financial requirements may be fulfilled by

consortium PRA or members thereof singularly or jointly.

(ii) When we look into the supportive documents requirement as noted earlier,

the documents required to be attached includes profile of the Prospective

Resolution Applicants including subsidiary (wholly owned subsidiary

party owned subsidiary (if any), associates, affiliates, joint ventures,

promoter and promoter group and key managerial personal as stipulated in

(b) of Annexure B.

(iii) Similarly, sub- clause (g) of same Annexure-B called for a notarized

declaration from the Prospective Resolution Applicants in order to

demonstrate that the promoters/ promoter group or any other group

company are part of the same group, in case the interested party is using

such entities for meeting the eligibility criteria. We note that the

Prospective Resolution Applicant was obligated to provide all relevant

documents for its promoter/ promoter group or any other group company,

if required to meet the eligibility criteria.

(iv) It is significant to note that vide (h) of same Annexure B, certified true copy

of completion certificate/ occupancy certificate (CC/OC) were called for to

Page 32 of 59 Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

substantiate and verify the criteria of development and successful delivery

of at least 10 Lakhs sq. ft. super area.

(v) It is the case of the "parties supporting Resolution Plan" that SRA has

delivered much more than 10 Lakh Sq. Ft. super area which includes the

project Luv Nest (1,46,803 sq. ft. build up area) and Project Urban Wood

(4,17,922sq. ft. build up area) and other projects completed by the

consortium to fulfil the eligibility criteria and as delivered. We note that

the consortium has claimed to have delivered projects to the tune of

14,37,215 sq. ft. of super area in the EoI submitted to Resolution Plan.

(vi) On the other hand, it is the case of the "parties opposing the Resolution

Plan" that the Adjudicating Authority vide Impugned Order, have analysed

in details about the eligibility criteria of delivered projects and have come

to conclusion that Luv Nest project having 1,48,803 sq. ft. and Urban Wood

Project having 4,17,922 sq. ft., need to be excluded due to non-availability

of OC and CC, the residual area completed by the consortium fall below

the 10 Lakhs sq. ft. as per eligibility criteria. The Adjudicating Authority

concluded that after exclusion of these two projects, delivered area by the

consortium remains 9,06,490 sq. ft., i.e., less than eligibility criteria, hence

rejected the Resolution Plan of the consortium.

(vii) We have also noted the contentions of the "parties opposing the Resolution

Plan" that Luv Nest project was not developed by either DS Infra Heights

Private Limited or Anand Buildtech Private Limited and indeed the project

Page 33 of 59 Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

was pertained to Shri Hari Realtech Pvt. Ltd. On this issue, it is the case

of the SRA that Shri Hari Realtech Pvt. Ltd is a related party of DS Infra

Heights Private Limited by virtue of presence of a common director. The

consortium also referred to a certificate issued by the Chartered Accountant

firm M/s Sanjay Bhuwania & Co., wherein it was certified that Shri Hari

Realtech Pvt. Ltd. is a related party of M/s DS Infra Heights Private

Limited. The certificate of Chartered Accountant firm dated 07.06.2023

reads as under: -

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(viii) On this issue, we take into consideration the fact that the project delivered

by Luv Nest, the "parties opposing the Resolution Plan" stated that the

project was completely developed by Shri Hari Realtech Pvt. Ltd and not

by DS Infra Heights Private Limited and in this regard, thus attached the

screen shot on website of UP RERA which reads as under: -

(ix) The "parties opposing the Resolution Plan" further submitted that the

contentions of the SRA that Shri Hari Realtech Private Limited is related

party of DS Infra Heights Private Limited is not correct as no details of

Page 35 of 59 Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

relationship of DS Infra Heights Private Limited with Shri Hari Realtech

Private Limited was furnished at the time of submitting of the Resolution

Plan and therefore, Chartered Accountant's certificate at later date is not

relevant.

(x) The "parties opposing the Resolution Plan" also stated that there is dispute

amongst shareholders of Shri Hari Realtech Private Limited as to who

exercises the control over the said company i.e., Shri Hari Realtech Private

Limited which is pending before the Adjudicating Authority being CP (IB)

No. 70/PB/2023 and as on 31.03.2022, neither DS Infra Heights Private

Limited nor promoter Mr. Shashank Gupta were holding more than 50%

of Shri Hari Realtech Private Limited and therefore, Shri Hari Realtech

Private Limited has got no connection with consortium.

(xi) We observe that similar disputed facts is regarding taking into account in

counting experience of SRA is the area completed pertaining to project of

Urban Woods. The SRA has taken into consideration this project area

based on the deemed completion certificate as per Section 15A of the Uttar

Pradesh Urban Planning & Development Act, 1973.

(xii) As regard, the project of Luv Next completed by Shri Hari Realtech Private

Limited, we note that as per definition of PRA in the eligibility criteria,

indeed PRA could have formed the consortium and could have also taken

experience of its members, however, consortium was expected to submit

Page 36 of 59 Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

the profile of the applicants including subsidiary, associates, joint ventures,

promoters, promoter groups at the time of submitting EoI.

(xiii) From the Resolution Plan submitted by the SRA, we note that following

details were submitted by SRA w.r.t. consortium member in the submitted

documents, which reads as under: -

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(xiv) We observe that the SRA claimed Luv Nest project to fulfil the criteria

which is required under eligibility criteria. The SRA submitted during

pleadings before us that Luv-Nest Project was mentioned just to say that

the said project is developed under mentorship of SRA because Mr.

Shashank Gupta was one of the shareholders of Shri Hari Realtech Private

Limited. The SRA submitted that even Luv-Nest project is excluded from

experience of delivered area, the SRA will still meet the eligibility criteria

of 10 Lakhs sq. ft. super area.

(xv) At this stage, we need to understand that the relevant threshold date is to

be considered (regarding eligibility criteria) i.e., the date of submission of

the Resolution Plan in response to Form G by consortium and information

contained therein. We observe that none of the parties can change the facts

at a later stage either to include the additional area or to exclude the

submitted area for purpose of determining the experience eligibility

criteria. It is not in dispute that while submitting the Resolution Plan, the

project Luv Nest was indeed included by consortium in counting its

experience.

(xvi) It is further noted from the documents attached by consortium that the name

of Shri Hari Realtech Private Limited was not forming the part of details

of the consortium members and it give details of only two consortium

members i.e., DS Infra Heights Private Limited and Anand Buildtech

Private Limited as perused from Resolution Plan submitted by the

Page 38 of 59 Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

consortium and noted earlier. Thus, logically the SRA could not have taken

the project of Luv Next into counting its experience in order to meet

eligibility criteria of 10 Lakhs sq. ft super area.

(xvii) At the stage of arguments and Written submission, the contention made by

the SRA that even if this project is excluded, the consortium will meet the

requirement of 10 Lakhs sq. ft, cannot be accepted as the relevant date

would be the date when the Resolution Plan was submitted to the

Resolution Professional in response to Form G.

(xviii) Now, we will take up the aspects regarding deemed completion certificate

concerning both Luvnest as well as Urban Woods Project.

(xix) As per the eligibility criteria, noted earlier, the PRA is required to submit

"certified true copies of completion certificate/ occupancy certificate to

substantiate and verify the criteria of development and successful delivery

of at least 10 Lakhs sq. ft. super area". Thus, the basic requirement was

the certified true copies of OC/CC. On this issue, it is the case of the SRA

that it has already complied for completion certificate for Urban Woods

Project before LDA on 10.03.2022 and thereafter, after rectifying the

defects marked on 21.12.2022 by the LDA, the consortium again submitted

its application on 06.01.2023 for grant of completion certificate.

(xx) The SRA further submitted that as per the UP RERA office order dated

16.09.2019, a limit of 7 working days has been prescribed for rejecting the

application for completion certificate and if the competent authority does

Page 39 of 59 Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

not inform the applicant about the rejection of application within 8 working

days then in such case completion certificate is considered to be deemed

approval by the competent authority. The SRA stated that it has already

obtained all the necessary NoC from the concerned authority i.e, fire,

electricity, power safety, structure safety certified for the Urban Woods

Project.

(xxi) On this issue, "parties opposing the Resolution Plan" submitted that the

work progress qua the Urban Woods Project was reflected on UP RERA

website as on going project as on 28.12.2023 and even DS Infra Heights

Pvt. Ltd. have stated that as on 30.09.2023 the project Urban Woods Project

stand completed to the extent of 92.18% which was evident from Chartered

Accountant Certificate filed by the consortium with UP RERA for the

purpose of withdrawal of money from designated accounts.

(xxii) It is the case of the "parties opposing Resolution Plan" that as per Clause 3

of the eligibility criteria, the delivery of super area should have been

completed by March, 2023 and not later than that. Thus, at the time of

submissions of Resolution Plan, the project Urban Woods was not

complete and could not have been taken into consideration by the SRA for

counting experience.

(xxiii) The "parties opposing the Resolution Plan" also opposed the fact that the

SRA was entitled to factor into the deemed completion certificate of project

Urban Woods and submitted that LDA in its order dated 21.12.2022

Page 40 of 59 Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

reflected that families have allegedly settled in the project "without

completion certification OC/ CC" and further mentioned regarding

unauthorised construction site and demolishing of part of projects.

(xxiv) At this stage, we would like to take into consideration the relevant

provisions of the Uttar Pradesh Urban Planning and Development Act

regarding completion certificate which is prescribed in Section 15 A, which

reads as under:-

"Section 15-A of the Uttar Pradesh Urban Planning and Development Act, 15-A Completion Certificate- (1) Every person or body having been granted permission under sub-section (3) of section 15, shall complete the development according to the approved plan and send a notice in writing of such completion to the Authority, and obtained a completion certificate from the Authority in the manner prescribed or provided in the byelaws of the Authority.

Provided that if completion certificate is not granted and refusal to grant it is not intimated within three months after receipt of the notice of completion, it shall be deemed that the completion certificate has been granted by the Authority."

(Emphasis Supplied)

(xxv) From above, it is noted that real estate developers who have completed

projects, is required to send a notice in writing of such completion to

concerned authority (LDA in present case) and obtain completion

Page 41 of 59 Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

certificate. It further provides that if completion certificate is not granted

or the authorities refuse to grant within stipulated period after receipt of

notice of the completion, it shall be deemed that the completion certificate

has been granted.

(xxvi) We also take into account, the Uttar Pradesh Real Estate Regulatory

Authority order dated 16.09.2019 which is seen at page no. 40 to 47 of the

Convenience Compilation (Volume I).

(xxvii) From above, it is seen that the real estate developer has to give a

notice in writing after completion of the project, however, if not refused or

replied by the competent authority (in the present case LDA) the same is

deemed to be approved as completion certificate.

(xxviii) Thus, it is significant to examine whether the SRA has furnished

such application of completion of project to LDA and whether the same

was objected to or returned back by LDA or did not take any action for the

SRA to take benefit of deemed consortium. In this connection, we take

into consideration that the SRA has claimed that he has sent a letter to LDA

regarding completion of project Urban Woods.

(xxix) We also note that if the promoter completes the works related to electricity

supply, water supply, sewerage disposal. drainage and internal roads. and

application for completion certificate has to be submitted to the competent

authority along with 1- Electrical Safety Certificate, 2 - Fire Safety

Certificate, 3 - Structural Engineer Certificate and 4- Lift

Page 42 of 59 Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

Installation/Safety Certificate, and whereas the competent authority has not

rejected the promoter's application within 7 working days and has not

informed the applicant with the required amendments within 8 working

days, then such completion certificate will be deemed approved by the

competent authority. We take into account the various such certificates

which SRA has claimed to have obtained while submitting his application

for CC/OC to LDA on 10.09.2022. These are noted from page no. 26 to 38

of Convenience Compilation (Volume I).

(xxx) Thus, based on above, the SRA argued that it would have entitled to use

deemed completion since it has given all the certificates.

(xxxi) We note that SRA has sent letter to LDA on 10.09.2022 which is not

available in present appeal file, but can be noted from following LDA's

note sheet which mentions SRA's letter dated 10.09.2022:

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(xxxii) Now, we take into consideration the LDA order dated 21.12.2022

which categorically mentioned that the families have settled without

Page 45 of 59 Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

completion certificate and have pointed cut several irregularities by SRA.

This letter submitted has been taken into consideration from page no. 185-

190 of Convenience Compilation (Volume I).

(xxxiii) We note that SRA has written letter to LDA on 06.01.2023, seeking

their approval for CC and OC and also mentioned about deemed

completion certificate as per UP RERA order dated 16.09.2023 which is

seen at page no. 437 to 439 of Convenience Compilation (Volume II).

(xxxiv) We understand that the purpose of completion certificate is that the

building has been constructed in accordance with the approved plans and

local by-laws and similarly occupancy certificate signifies that the building

is fit for occupation and all necessary utilities and infrastructure are in

place. Thus, the eligibility criteria categorically mention about the CC and

OC and not about deemed completion certificate.

(xxxv) However, the fact remains that Section 15A of Uttar Pradesh Urban

Planning & Development Act, 1973 and Uttar Pradesh Real Estate

Regulatory Authority order dated 16.09.2019, stipulates that in case after

complying requirements and making necessary application for OC & CC

by the real estate developers, if the concerned authority (in the present case

LDA) does not issue the OC & CC certificate, it would be deemed to have

been issued/ approved. Hence, the concept of deemed certificate as

pleaded by the SRA cannot be ignored and the pleading of the "parties

opposing the Resolution Plan" that there is no concept of deemed

Page 46 of 59 Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

certificate may not hold good. However, the fact whether the SRA

submitted the application enclosing of the documents and whether the same

was not replied at all by the LDA within a stipulated period is a moot

question.

(xxxvi) It has been brought to our notice by the parties opposing the

Resolution Plan that LDA has categorically stated that no completion

certificate was issued to SRA which is evident from LDA letter dated

01.09.2023 and 19.08.2023, these letters reads as under :-

LDA Letter Dated 01.09.2023

Page 47 of 59 Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

LDA Letter Dated 19.08.2023

(xxxvii) We note the SRA had written a detailed letter to LDA on 06.01.2023

wherein he has clarified its position of completion of project to LDA and

has also referred to the deemed completion clause as per UP RERA order

dated 16.09.2019. However, the LDA letter on 01.09.2023 has stated

categorically that they have received the online application LDA/ BP 21-

22/OCC/0015 on 14.03.2022 with regard to Tower 1, 2 and 3 M/s DS Infra

Heights Private Limited, Sushant Golf City Project on which objections

were sent online on 15.03.2022. The LDA has mentioned that because of

non resolution of objections by SRA, the completion certificate of the site

has not been issued.

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(xxxviii) Similarly, we note that in another letter dated 19.08.2023 to an RTI

Applicant, Shree Faizal Haider Zaidi (quoted earlier), LDA again

reconfirmed that OC/ CC certificate of DS Infra Heights Private Limited

has not been issued till date.

(xxxix) Thus, from above RTI information, it is evident and clear that LDA

had not issued the CC/ OC to DS Infra Heights Private Limited even on

01.09.2023 which contradicts the claim of SRA that for Urban Wood

Project with deemed completion certificate has been deemed to have been

issued by LDA due to DS Infra Heights Private Limited letter dated

06.01.2023. Thus, we are not in position to accept the contentions of SRA

along with contentions of Resolution Professional and CoC on this account.

We find merit in the logic of 'party opposing the Resolution Plan'.

(xl) Incidentally, we note that although the first letter was written by DS Infra

Heights Private Limited to LDA for requesting CC/ OC on 10.09.2022 and

the SRA has claimed that they have received all requisites safety

certificates from fire, lift, electricity, earthquake. However, during

pleadings, it has been brought to our notice by party opposing Resolution

Plan that the letter claimed by SRA who have written to LDA on

10.09.2022 enclosing all safety certificates, however, the fire services letter

was issued only on 10.12.2022 then how the SRA could have furnished the

complete and correct application to LDA on 10.9.2022. We find logic in

the contention of the party opposing the Resolution Plan after taking into

Page 49 of 59 Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

consideration all safety certificates and letter of DS Infra Heights Private

Limited dated 10.09.2022 which we have already discussed earlier.

(xli) Thus, we are not in a position to accept the contention of SRA on this

account. After analysing all the facts and evidence before us, we find that

SRA failed to meet the eligibility criteria of work experience of having

delivered 10 Lakhs sq. ft. of super area. Thus, we hold that the SRA was

not eligible on this criteria and we do not find any error in the Impugned

Order this account.

55. Issue (II) Whether, the consortium met the financial eligibility criteria

of Rs. 20 Crore "Committed Funds" as per eligibility criteria No. 7 of EoI.

(i) We have already noted the stipulated eligibility criteria, which was

required to be fulfilled by the PRA and according to criteria No. 7, the PRA

should have committed funds available for investment/ deployment in real

estate project of the Corporate Debtor of Rs. 20 Crores or more and PRA

was required to submit proof of availability of such committed funds along

with EoI. In clarification to eligibility criteria No. 7, it has been indicated

that effective date in the Resolution Plan would not be more than 90 days

from the date of approval of Resolution Plan by the Adjudicating

Authority. Another clarification to eligibility criteria No. 7, further states

that PRA will be required to arrange funds for entire cost of construction

after approval of Resolution Plan by the Adjudicating Authority.

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(ii) Having noted the requirement of the committed funds, we look into

Resolution Plan submitted by the SRA on 29.06.2023, wherein in Chapter

4 (in Para 4.1) it has been indicated that "resolution Applicant has already

submitted a commitment letter of Rs. 20 Cores to HDFC to the Resolution

Professional with EoI". We take into consideration the documents

submitted by the SRA to the Resolution Professional regarding fulfilling

this criterion. We take into consideration that there is a commitment letter

issued by HDFC which is at Pg. 82 as Annexure A-7 of the appeal which

reads as under: -

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(iii) This letter is marked to DS Infra Heights Pvt. Ltd. indicating that HDFC

committed for fund requirement of Rs. 20 Crores subject to submission of

required documents, requisite permission/ approval by SRA in compliance

of banks extended guidelines and procedures at the time of sanction. It is

the case of the SRA, CoC & Resolution Professional that this complied

with the eligibility criteria as there was a clear commitment letter of HDFC

Bank.

(iv) On the other hand, we have noted the contentions of the "parties opposing

the Resolution Plan" the said letter cannot be construed is the proper

document indicating the availability of deployable funds of Rs. 20 Crores

or more and therefore, the commitment letter of HDFC cannot be treated

as a proof of availability of such funds as in the commitment letter there is

no mention about sanction of funds by the banks in favour of the SRA.

(v) We also note that as one of the homebuyers i.e., Mr. Sudhir Kumar has

written to the HDFC on 16.08.2023 seeking clarification from HDFC

regarding whether HDFC's letter was a sanction letter and HDFC bank in

its reply dated 19.08.2023 has stated that the document referred by Mr.

Sudhir Kumar is neither a sanction letter nor document establishing

disbursal of loan.

(vi) We take into consideration the said clarification letter of HDFC dated

19.08.2023 which reads as under: -

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Page 53 of 59 Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

(vii) We note that in eligibility criteria 7, although the term committed fund has

been mentioned but the exact scope of such committed fund has not been

elaborated. Therefore, we tried to look into any definition or explanation

about term committed funds but we could not lay our hand on such

definition or guidelines either in the Code, or Companies Act, 2013. It is

understood that there is no specific definition of the "commitment fund"

elsewhere also. However, in common commercial parlance, committed

fund, in context of biding or EoI like present case, can be referred to the

financial resources with a PRA, as formally pledged or demonstrated to

Page 54 of 59 Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

ensure that the PRA/ bidder can fulfil obligations of a contract/ Resolution

Plan if awarded.

(viii) The purpose of such committed fund is to infuse capital required by the

bidder when the work is awarded or Resolution Plan is approved in his

favour such committed funds can be funds of his own (based on his balance

sheet) or funds tied up through banks/ financial institutions, who give the

commitment letter/ comfort letter/ sanction letter/ letter of credit depending

upon the mutual understanding of bank and borrower. The implication of

all such letters from the bank may be different. For instance, a simple

comfort letter or a commitment letter is merely indicative an intent of a

broad approval of Bank subject to compliance and fulfilling the criteria of

Bank including the documents to be submitted by the bidder. In contrast to

this, a sanction letter becomes formal sanction of the committed funds or

loan amount in favour of the borrower whose disbursal of funds may

happen at a later stage.

In the present case, the eligibility criteria stipulated that PRA should

have committed fund available of Rs. 20 Crores or more and the PRA was

required to submit the proof of availability of aforesaid funds along with

EoI. Thus, the committed fund were required more in nature of availability

of the said fund as on date of effective date i.e., within 90 days of approval

of Resolution Plan. The simpliciter commitment letter of HDFC with

various conditions relating to future sanction as produced by the SRA

Page 55 of 59 Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

could not have met the kind of eligibility criteria, envisage in the EOI.

Keeping in view this, the SRA did not demonstrate availability of funds on

effective date. While we agree to logic of the parties supporting Resolution

Plan that there was no requirement of blocking of funds during the

interregnum from EoI submission to effective date and funds were rather

required to be made available on effective date. We also find merit in

contention of parties supporting Resolution Plan blocking funds at

submission of EoI stage is commercially impractical and against prudent

financial policies. However, we need to understand that eligibility criteria

No. 7 has given clear and ample emphasis on proof of availability of funds

on effective date. The letter of HDFC does not inspire confidence

regarding proof of availability of funds on effective date. Such letter of

bank with all contingencies is at best, mere indication about bank's

willingness to consider proposal of SRA, but can't bespeak about Bank's

confirmation to make funds available on effective date.

(ix) As such, we do not find merit in claim of the SRA , Resolution Professional

and CoC on this count. We do not find any error in Impugned Order, non-

suiting SRA on this ground.

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56. We also take into consideration Regulation 39 of the IBBI (Insolvency

Resolution Process for Corporate Persons Regulations, 2016 which reads as

under:

"[(1) A prospective resolution applicant in the final list may submit resolution plan or plans prepared in accordance with the Code and these regulations to the resolution professional electronically within the time given in the request for resolution plans under regulation 36B along with

(a) an affidavit stating that it is eligible under section 29A to submit resolution plans;

(c) an undertaking by the prospective resolution applicant that every information and records provided in connection with or in the resolution plan is true and correct and discovery of false information and record at any time will render the applicant ineligible to continue in the corporate insolvency resolution process, forfeit any refundable deposit, and attract penal action under the Code."

(Emphasis Supplied)

57. From above, it is evident that the PRA is required to give certification that

every information and record provided in the Resolution Plan is true and correct.

The Regulation further stipulates that discovery of false information and record

at any time will render the applicant ineligible to continue in CIRP. We have

already noted that the factual position regarding the Luvnest project and Urban

Woods Project was not factual and correctly submitted by the SRA while

Page 57 of 59 Comp. App. (AT) (Ins.) No. 963-965, 969 & 970, 1175, 1176 & 1174 of 2024

submitting their experience. Thus, we find that SRA will be covered by

Regulation 39 of IBBI CIRP Regulations.

(i) Further, we note from Section 30(2) of the Code which stipulates that

Resolution Plan shall be in conformity to such other requirements as may

be specified by the board. We need to factor into this requirement along

with Regulation 39 of the IBBI (Insolvency Resolution Process for

Corporate Persons Regulations, 2016 which we have discussed earlier.

Thus, we find that the Adjudicating Authority was correct in dismissing the

application of Resolution Professional for approval of Resolution Plan of

SRA.

(ii) We take into consideration the recent judgement of the Hon'ble Supreme

Court of India delivered on 02.05.2025 in the matter of Kalyani Transco

vs. M/s Bhushan Power and Steel Limited & Ors. [Civil Appeal No. 1808

of 2020] wherein in Para 79 the Hon'ble Supreme Court of India has

categorically stated an illegality of any nature cannot be permitted to be

perpetuated. The relevant portion of the para reads as under :-

"79. An illegality of any nature cannot be permitted to be perpetuated, and a plea of fait accompli cannot be permitted to be raised by any party to cover up their illegal acts, after achieving the ill motivated intentions circumventing the law.****"

(Emphasis Supplied)

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We find above ratio applicable to present appeals.

58. Based on above detailed analysis, all appeals fail and stands dismissed.

I.A., if any, are Closed. No costs.

[Justice Rakesh Kumar Jain] Member (Judicial)

[Mr. Naresh Salecha] Member (Technical)

[Mr. Indevar Pandey] Member (Technical) Sim

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