Jm Financial Asset Reconstruction ... vs Ask Trusteeship Services Private ...

JM Financial Asset Reconstruction Company Ltd. ....Appellant Vs.

ASK Trusteeship Services Pvt. Ltd. & Ors. ...Respondents For Appellant/ Mr. Raunak Dhillon, Ms. Niharika Shukla, Applicant Advocates for JM Financial Mr. Sudhir Makkar, Sr. Advocate with Ms. Anannya Ghosh, Ms. Mrinalini Mishra, Advocates for IRP

For Respondents Mr. Ajay Monga, Ms. Jagriti Ahuja, Mr. Ateev Mathur, Mr. Geetansh, Mr. Sameer Goel, Advocates for Kotak Mahindra Bank.

ORDER

(Hybrid Mode)

11.07.2025: I.A. No. 3129 of 2025 :- This is an application filed by the

Interim Resolution Professional (IRP) seeking following prayers:-

"29. In view of the foregoing, it is most humbly prayed that this Hon'ble Tribunal may be pleased to:

a) Allow the present Application;

b) Issue appropriate directions of defreezing the bank account of the Corporate Debtor maintained with Respondent i.e. Kotak Mahindra Bank bearing Account No. 2611833589 at its branch at Sector-18, Noida;

c) Consequentially issue appropriate directions to Respondent i.e. Kotak Mahindra Bank to defreeze the bank account and allow withdrawal operation from the Separate Account of Corporate Debtor bearing Account No. 2611833589 maintained with Kotak Mahindra Bank at its branch in Sector-18, Noida; and 2

d) Pass any other order in the facts and circumstances of the present application that this Hon'ble Tribunal may deem fit and proper."

2. In the Appeal, order was passed on 09.05.2024 where we had issued

following directions in paragraphs 7 to 10:-

"7. Learned Counsel for the homebuyers has referred to paragraph 30 of the judgment where the Adjudicating Authority has directed construction to be carried out under the supervision of Justice Sunil Gaur to Monitor over the IRP to supervise the CIRP process.

8. The Corporate Debtor being a Real Estate Company, we are of the view that the interest of the homebuyers are to be protected. The submissions raised by Counsel for the parties as noted above needs consideration. We issue notice in both the appeals and grant three weeks' time to file reply to the Respondents. Rejoinder, if any, be filed within two weeks thereafter.

9. Appellant in appeal filed by Suspended Director of the Corporate Debtor submits that the Corporate Debtor shall extend all assistance for carrying out the constructions.

10. List both the Appeals on 12.07.2024 for disposal.

In the meantime, in pursuance of the impugned order dated 22.04.2024, no further steps shall be taken in the CIRP except the construction to be carried out under the IRP with the assistance of officers and staff of the corporate debtor under the supervision of Justice Sunil Gaur as directed by the Adjudicating Authority at paragraph 30.

The RERA account which are earmarked for the construction of the project, under the instructions of the IRP and other signatories of the fund may be used for construction. Financial Creditors also to extend co- operation for release of fund for the purpose of the construction."

I.A. No. 3129 of 2025 IN Comp. App. (AT) (Ins.) No. 912 of 2024 3

3. Applicant who is an IRP submits that in pursuance of the order of this

Tribunal, the IRP continued with the construction. It is submitted that the

project which was registered with the RERA has lapsed on 29.03.2025 on

account of which the Respondent No.3 has put a debit freeze. We had issued

notice in the application and reply has been filed by Kotak Mahindra Bank.

4. Counsel for the Respondent has referred to Practice Directions which

was issued by RERA Authority namely-- "The Uttar Pradesh Real Estate

Project (Maintenance and Operation of Project Bank Accounts) Directions,

2020" ("Directions 2020") in which he has referred to direction 11(xiv) which

is as follows:-

"11(xiv). Banks shall restrict withdrawals / transfers from the 'Separate Account of the Project' upon lapse of registration of the project."

5. Counsel for the Bank submits that the Bank as per the Directions 2020

was obliged to put a debit freeze, hence, Bank acted in accordance with the

aforesaid directions.

6. We have considered the submissions of the Counsel for the parties and

perused the record.

7. Counsel for the Applicant has also referred to the provisions of Section

4 and Section 9 of the RERA Act, 2016. There is no dispute that as on date

registration has lapsed and application for revival of the project is pending

consideration. The Directions, 2020 which has been relied by Counsel for the

Bank permit that after the lapse of the registration, Bank shall restrict

I.A. No. 3129 of 2025 IN Comp. App. (AT) (Ins.) No. 912 of 2024 4

withdrawals. The amount which was accumulated in the aforesaid separate

account till 29.03.2025 was amount collected from the Real Estate Allottees

and was for utilization of 70% for the construction.

8. We, thus, are of the view that the ends of justice be served in the present

case to permit the IRP to utilize the amount which was accumulated till

29.03.2025 in the aforesaid account for the purpose of construction. We

further observe that the application which has been filed for revival of the

registration shall be expeditiously considered by the RERA Authority.

9. Application is disposed of accordingly.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical) Anjali/nn

I.A. No. 3129 of 2025 IN Comp. App. (AT) (Ins.) No. 912 of 2024