Mr. Anand Sonbhadra, Resolution ... vs M/S. Arham Escon Private Limited

IN THE MATTER OF: MR. ANAND SONBHADRA, Resolution Professional of Shubhkamna Buildtech Pvt. Ltd. Having office at: AAA, Insolvency Professional LLP, E-10A, Kailash Colony, New Delhi - 110046 Mob: 9818199777 Email: anand.sonbhadra@aaainsolvency.com Sonbhadra65@gmail.com ... Appellant

Vs. M/S. ARHAM ESCON PVT. LTD. R/off at: 601, Plot No. 17,

06th Floor, Sachdeva Tower Comm

Centre, Karkardooma, Delhi-

110092

Email: info@arihantgroup.co.in ... Respondent No. 1

GREATER NOIDA INDUSTRIAL DEVELOPMENT AUTHORITY

Plot No. 1, Knowledge Park - 04,

Greater Noida, GautamBudh Nagar,

Uttar Pradesh - 201308 ... Respondent No. 2

Present: For Appellant: Mr. Abhishek Anand, Mr. Viren Sharma, Mr. NipunGauta, RP in person, Mr. Anand Sonbhadra, in person, Mr. Samriddh Bindal, Advocates For Respondents: Mr. Arun Kathpalia, Sr. Advocate with Mr. Rakesh Sinha, Advocates for Respondent No. 1. Mr. U N Singh, Advocates for R2 -2-

JUDGMENT

Jarat Kumar Jain: J.

The Appeal is filed against the order dated 23.09.2019 passed by the Ld.

Adjudicating Authority (National Company Law Tribunal, New Delhi Bench) in

CA No. 113 of 2019 in CP (IB) No. 1059/ND/2018, whereby the Learned

Adjudicating Authority dismissed the Application under Section 60(5) (c) of

Insolvency and Bankruptcy Code, 2016 (IBC)filed by the Resolution

Professional (RP) of Corporate Debtor M/s Shubhkamna Buildtech Pvt. Ltd

2. Brief facts of this case are that Shubhkamna Buildtech Pvt. Ltd.

(Corporate Debtor) was incorporated in the year 2006 with its registered office

at New Delhi. It is engaged, inter alia, in the business of real estate as a builder

and developer of several real estate projects. Vide lease deed dated 04.04.2011

a plot No. GH-02A, Sector 01, Greater Noida, admeasuring 32,296 sq. mts. (the

Site) was allotted to Corporate Debtor for a period of 90 years by Greater Noida

Industrial Development Authority (GNIDA/R-2). Pursuant to the lease deed

Corporate Debtor took possession of the site and commenced construction and

development of its project, Shubhkamna City, as per the plans approved by

GNIDA. The Corporate Debtor collected booking amounts against the flats from

about 800 homebuyers and allotted the flats to them in Towers. Subsequently,

on 27.09.2016 the Tripartite Registered Agreement was executed between

Corporate Debtor, Arham Escon Pvt. Ltd. (R-1) and Greater Noida Authority (R-

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2) and a portion of the site i.e. 10,627.229 sq.mt. was sub-leased to Arham

Escon for construction and development of its projects.

3. Concord Infrastructure Pvt. Ltd. filed an application (CP No. IB-

1059/ND/2018) under Section 9 of the IBC against the Corporate Debtor the

same was admitted by the Adjudicating Authority vide order dated 26.11.2018

and Mrs. Harkamal Hora Arora was appointed as IRP. Thereafter, vide order

dated 18.02.2019 Mr. Anand Sonbhadra was appointed as RP.

4. During the course of conducting CIRP, the RP (Appellant herein) received

a letter dated 18.03.2019 from the Arham Escon (R-1) that while sub leasing

the said plot the Corporate Debtor represented that the said plot is free from all

encumbrances and third party claims/rights. However, Arham Escon had

received several complaints from Homebuyers informing that the Corporate

Debtor allotted the flats to be made in tower Nos. 5,6,7 & 7A located at the

sub-leased plot, as per the plans approved by GNIDA. Therefore, Arham Escon

directed the RP to take legal action against the ex-management of the

Corporate Debtor.

5. According to the RP during the CIRP, he has received aggregated claims

amounting to Rs. 18,49,82,170/- from the 161 homebuyers who were allotted

flats in towers nos. 5, 6, 7 and 7A. As per plan approved by GNIDA, these

towers are proposed to be constructed on sub-leased plot.

6. It is pointed out by the RP that sub-lease was granted on the basis of

fraudulent, misrepresentation of facts with the intention to deprive the original

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allottees of their rights over the towers 5,6,7 &7A of the Shubhkamna City

Project. Thus, the sub-lease deed is void ab initio. Therefore, the possession of

sub-leased portion be restored to the RP so it may be included in the CIRP.

7. After receiving aforesaid letter of R-1 dated 18.03.2019 and claim from

161 allottees, RP filed an application under Section 60(5) (c) of IBC against M/s

Arham Escon Pvt. Ltd. (R-1) and GNIDA(R-2) before the Adjudicating Authority

for the following reliefs:

(a) That the present Application be allowed;

(b) That till the adjudication of the present Application, the operation of the Sub- lessee at the sub-leased portion of the site be stayed to avoid further losses to the sub-lessee as well as any further detriment being caused to the rights of the original allottees of Towers 5,6,7&7A;

(c) That the Tripartite Agreement may be held to be an agreement void ab initio and the effect thereof be reversed;

(d) That the Respondent No.1 may be directed to restore the possession of the sub-leased portion of the site to the Applicant, which the Applicant may be allowed to include in the Information Memorandum for invitation of Resolution Plans as a leasehold property of the Corporate Debtor;

(e) That the Respondent No.1 may be directed to file their claim with the Applicant in compliance with the provisions of the code;

(f) That directions may be given regarding the priority of the claim of Respondent No.1 arising out of the fraud committed by the Corporate Debtor upon them;

(g) Any other directions or order as this Hon'ble Tribunal may deem fit and proper.

8. The Respondents resisted the Application that relief claimed in the

Application is beyond the jurisdiction of Adjudicating Authority however the

same can be agitated before the Civil Court. Apart from this, Section 46 of IBC

Company Appeal (AT) (Insolvency) No. 1231 of 2019 -5-

mandates that the transaction which is beyond two years cannot be looked into

by the IRP/RP. The Sub-lease granted in favour of R-1 by a registered

instrument, after paying lease rent to the lessor i.e. GNIDA (R-2). There is no

element of fraud brought on record. The RP has not disclosed on what basis

claiming the rights over sub-lease plot. RP has not filed any document in

support of relief sought in the Application. It is also pointed out that pursuance

of the Sub-lease the R-1 had obtained No Objection Certificate (NOC) for high

clearance from Airport Authority of India and the certificate with respect of

building byelaws from Registered Architect, Planner, Valuer and Landscape,

Interior. The R-1 had obtained term loan of Rs. 50 Crores by mortgaging the

said plot with Kotak Mahindra investment with the permission of GNIDA.

Hence, the Application be dismissed.

9. After hearing Learned Counsel for the parties, Ld. Adjudicating Authority

vide impugned order dismissed the application. Being aggrieved with this order

the Appellant (RP) has filed this Appeal.

10. Learned Counsel for the Appellant submitted that the Learned

Adjudicating Authority has failed to consider that the 'Corporate Debtor'

collected booking amounts against the flats pertaining to Tower nos. 5,6, 7 &7A

which were supposed to be constructed as per the sanctioned plan on the plot

which was sub-leased to R-1. The Corporate Debtor, without returning the

booking amounts to such allottees had sub-leased the portion of plot to R-1.

After receiving the letter of R-1 dated 18.03.2019 the RP had formed an opinion

Company Appeal (AT) (Insolvency) No. 1231 of 2019 -6-

that ex-management of Corporate Debtor had defrauded such allottees in

whose favour rights had already been created prior to the execution of the sub-

lease deed dated 27.09.2016. The erstwhile management of CD had not only

defrauded the allottees but also misrepresented the R-1 that the said sub-

leased plot is free from all encumbrances and third party rights/claims. The

agreement executed on the basis of fraudulent misrepresentation of facts is

void ab initio as held by the Hon'ble Supreme Court in the case of 'Bhaurao

Dagdu Paralkar vs State of Maharashtra and Ors.'[AIR 2005 SC 3330].

11. It is also submitted that the sub-lease deed was signed by Mr. Piyush

Tiwari on behalf of Corporate Debtor in a capacity of Director. However, as on

date of execution he was disqualified and incapacitated to execute any binding

contract as per law.

12. Ld. Adjudicating Authority has not considered that Section 231 of IBC

provides that no civil court has jurisdiction to deal with the issue in which the

Adjudicating Authority or the IBBI is empowered by or under the IBC. The

issue related to CIRP can only be decided by the Adjudicating Authority.

13. Ld. Adjudicating Authority failed to consider that the look back period as

provided under Section 46 of IBC is not applicable to the transactions executed

with fraudulent intentions.

14. Ld. Adjudicating Authority has not considered that as per Section 60(5)

(c) of IBC only the Adjudicating Authority has jurisdiction to decide any issue

Company Appeal (AT) (Insolvency) No. 1231 of 2019 -7-

arising out of CIRP. Thus, the impugned order may be set aside and the Appeal

be allowed.

15. Per contra Ld. Sr. Counsel for the Respondent No. 1 submitted that the

association of home buyers have filed a Civil Suit against the Corporate Debtor

where a factum of transfer of 10,627 sq. mts. in favour of R-1 was recognized.

During the pendency of Civil Suit the settlement was arrived at between the

members of association and the Corporate Debtor and in terms of settlement

the Civil Court has decreed the suit. CIRP of the Corporate Debtor commenced

after more than two years from the transfer of land had been effected in favour

of R-1. For these reasons, the RP has no locus to file the Application against

the R-1.

16. It is submitted that the portion of plot was transferred under a registered

instrument (Tripartite Agreement) and the transfer was effected pursuant to

approval of GNIDA in favour of R-1. R-1 had paid a sum of Rs. 13,54,24,341/-

to GNIDA under the lease deed. The Tripartite Agreement though nomenclature

as a sub-lease was for all intents and purposes, a lease by GNIDA in favour of

R-1 with no rights in the said plot remaining with the Corporate Debtor. The

Adjudicating Authority cannot cancel such registered instrument.

17. The Ld. Adjudicating Authority while exercising the jurisdiction under

Section 60(5) (c) of the IBC cannot declare a registered sub-lease deed as void

ab-initio, the Appeal is misconceived and liable to be dismissed.

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18. Ld. Sr. Counsel for the Respondent No. 1 submitted that the RP cannot

consider to be a person aggrieved. Therefore, he has no locus to file Appeal

under section 61 of the IBC in view of the order passed by this Appellate

Tribunal in the case of S. Rajendran v. Jonathan Mourali Darang [2019 SCC

Online NCLAT 758]. Ld. Adjudicating Authority after considering the factual as

well as legal issues dismissed the Application.

19. Ld. Counsel appearing on behalf of the Respondent No. 2 adopts the

argument advanced by the Ld. Sr. Counsel for the Respondent No. 1 and

supports the impugned order.

20. After hearing Ld. Counsels for the parties, we have minutely examined

the pleadings and documents.

21. The only issue arises for our consideration is whether the Corporate

Debtor had sub-leased the portion of the plot to R-1 with an intend to defraud

the allottees of Towers No. 5, 6, 7, and 7A?

22. Firstly, we have considered whether the allottees are aggrieved with the

transaction of sub-lease in favour of R-1.

23. The CIRP initiated on 26.11.2018 and RP was appointed on 18.02.2019.

Before that in the month of November, 2016 about 800 allottees of the

Corporate Debtor including the allottees of Towers No. 5, 6, 7 & 7A have

formed Shubhkamna City Welfare Association (Association) with the aim and

object to fight against the Corporate Debtor for their rights. One of the member

of the Association collected information from GINDA vide dated 22.03.2017

Company Appeal (AT) (Insolvency) No. 1231 of 2019 -9-

about the sub-lease which is in favour of R-1. In the month of July, 2017 the

Association had filed Civil Suit No.450/2017 against the Corporate Debtor in

the Court of Civil Judge Sr. Division Gautam Buddha Nagar Noida seeking the

relief of permanent injunction to restrain the Corporate Debtor and its agents

from creating third party interest over the five towers which have been built

over plot No. GH02 Sector-1 Noida.

24. During the pendency of Suit, the matter was referred to mediation

centre. The parties have come to a settlement on 21.05.2018 before the

mediation centre in terms of minutes of meeting dated 30.12.2017. On the

basis of the settlement the court has disposed of the Civil Suit. The R-1 has

filed the copy of Civil Suit, Judgment and Settlement deed, list of allottees

(homebuyers of Shubhkamna City) provided to Association by the Corporate

Debtor on 20.02.2017.

25. The Association in the suit has not claimed any relief for cancellation of

sub-lease deed dated 27.09.2016. The Association has pursued its claim only

against the Corporate Debtor and not against the R-1. It means the Association

is not aggrieved with the transaction of sub-lease in favour of R-1.

26. Now, we have considered whether the RP has any locus to file Application

before Adjudicating Authority.

27. It is an admitted fact that vide registered instrument (Tripartite

Agreement) dated 27.09.2016 a portion of the site i.e. 10,627.229 sq. mts. was

sub leased by the Corporate Debtor to the R-1 with the permission of R-2.

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Though the Tripartite Agreement is titled as sub-leased deed. However, this

instrument for all practical purposes is lease deed as in this deed R-1 has no

obligation or liability towards Corporate Debtor. R1 has to pay lease rent

directly to the R-2.

28. The RP although pleaded that he has received aggregated claims

amounting to Rs. 18,49,82,170/- from 161 allottees of Tower Nos. 5, 6, 7 & 7A.

As per sanctioned plan, these Towers are proposed to construct on the portion

which was sub leased by the Corporate Debtor. Admittedly, the RP has not filed

any list of such allottees and their claim forms. The RP has filed only a letter

dated 18.03.2019 received from R-1.

29. The sum and substance of the aforesaid letter is that according to the R-

1, Corporate Debtor has misrepresented that sub-leased plot is free from all

encumbrances and third party claims/rights, whereas some allottees are

demanding R-1 to allot flats in their favour in accordance with the builder

buyer agreement executed by the Corporate Debtor. Therefore, the R-1 directed

the RP to take necessary actions against the ex-management of Corporate

Debtor and take steps for cancellation of builder buyer agreement and settled

the claims of all those allottees.

30. We have noted that the RP has not pleaded that CoC has directed him to

file application, on the other hand, it is submitted that RP himself after

receiving the letter from R-1 had formed an opinion that corporate Debtor had

Company Appeal (AT) (Insolvency) No. 1231 of 2019 -11-

defrauded the allottees by sub-leasing the portion of plot to R-1. Therefore, filed

the Application.

31. As the RP has not filed any list of allottees or claim forms, therefore, we

hold that the sole basis of filing the Application by the RP is the letter of R-1

dated 18.03.2019.

32. Now we have examined the contents of the letter. The R-1 in the said

letter has not disclosed the name and number of allottees who are demanding

R-1 to allot flats on the basis of agreements executed by the Corporate Debtor.

The RP has not stated in the Application that after receiving the letter he has

verified the contents of the letter. The RP has not filed any claim form and list

of such allottees, therefore, the statement of the RP that he has received the

claim of 161 allottees, is not correct.

33. With the aforesaid discussion, we are of the view that the RP has no

locus to file the Application.

34. Admittedly, the transfer of portion of plot by sub-lease was effected on

27.09.2016 whereas CIRP initiated after more than two years i.e. on

26.11.2018. The RP has no ground to doubt the transaction which is more

than two years prior to commencement of CIRP. The association has not raised

any plea of fraud in transferring the plot by sub-lease to R-1 and the RP has

failed to make out a case that the sub-lease was executed for depriving the

rights of homebuyers. Therefore, we find no substance in the argument of Ld.

Company Appeal (AT) (Insolvency) No. 1231 of 2019 -12-

Counsel for the Appellant that the sub-lease is actuated by fraud, therefore, no

limitation has applicable to such transaction.

35. As we have already held that before initiation of CIRP, the members of

association have arrived at a settlement with the Corporate Debtor and in the

suit they have not claimed any reliefs for cancellation of the sub-lease deed

dated 27.09.2016. Thus, the plea of RP that he has filed the Application for

protecting the rights of homebuyers is not correct.

36. With the aforesaid discussion, we are of the view that the RP has no

locus standi to file the Application before the Adjudicating Authority claiming

the relief as shown in Para 7. We find no ground to interfere in the impugned

order. Thus, the Appeal is dismissed.

37. We find that the RP has unnecessarily dragged the Corporate Debtor in

litigation. Therefore, we impose the cost of Rs. 50,000/- on the RP. He is

directed to deposit the same in the PM CARES Fund within 15 days and

compliance affidavit be filed in the registry of this Appellate Tribunal. It is made

clear that this cost should not be included in CIRP Costs.

[Justice Jarat Kumar Jain] Member(Judicial)

[Dr. Ashok Kumar Mishra] Member(Technical) New Delhi 05th January, 2022 SC

Company Appeal (AT) (Insolvency) No. 1231 of 2019