My Palace Mutually Aided Cooperative ... vs Mr. Abhay Narayan Manudhane And Ors

IN THE MATTER OF: My Palace Mutually Aided Cooperative Housing ...Appellant Society Ltd. & Anr.

Versus

Abhay Narayan Manudhane & Ors. ...Respondents

Present: For Appellant : Nidhesh Gupta, Sr. Adv. with Aman Vachher, Jasvinder Choudhary, Akshat Vachher, Abhijit Vachher, Adv. For Respondent : Mr. Alok Dhir, Varsha Banerjee, Adv. for R3 Mr. Chaitanya Chavan, Meghna Rao, Harshit Goel, Sumi Jain, Adv. for R1

ORDER

(Virtual Mode)

Per: Justice Rakesh Kumar Jain: (Oral)

18.09.2025: This appeal is filed by My Palace Mutually Aided

Cooperative Society and Anish Construction Co. against the order dated

06.08.2024 by which the NCLT, Mumbai Bench has disposed of I.A No. 3781

of 2023 filed by the RP / Respondent No. 1 and I.A No. 4521 of 2023 filed by

the Financial Creditor / Respondent No. 3.

2. Brief facts of this case are that Bank of India filed an application under

Section 7 of the Code for the resolution of its debt against Housing

Development and Infrastructure Ltd. (CD). The Application was admitted on

20.08.2019 and Respondent No. 1 was appointed as the IRP and later on

confirmed as the RP.

3. During the pendency of the CIRP proceedings, Respondent No. 1 filed

I.A No. 3781 of 2023 in which the following prayers were made:-

a) To declare that the Corporate Debtor HDIL has the right to receive 55% of the total sale receivables from the development carried out at the said Property being all that piece and parcel of land admeasuring about 100 acres in Survey No. 57, Village Shamsguda, now known as Balanagar Mandai, Ranga Reddy District, Telengana;

b) to order and declare that the rights granted to Respondent Nos.

3 by virtue of the (i) Development Agreement cum General Power of Attorney dated 18 May 2023; and (ii) Development Agreement cum General Power of Attorney dated 18 May 2023 are subject to /subservient to the rights of the Corporate Debtor over the said Property;

c) To order and direct the Respondent Nos. 1 to 3 that 55% of any revenue generated from the development carried out over the said Property shall be applied towards the estate of HDIL, first in satisfaction of its security virtue of the Agreement of Assignment of Receivables and thereafter towards due repayment of its debts;

d) Pending the hearing and disposal of this Application, Respondent Nos. 1 to 3, their respective servants, agents or any other persons claiming through, by or under them, be restrained by an order and injunction of this Tribunal from taking any steps in furtherance of the (i) Development Agreement cum General Power of Attorney dated 18 May 2023, (ii) Development Agreement cum General Power of Attorney dated 18 May 2023;

e) Pending the hearing and disposal of this Application, Respondent Nos. 1 to 3, their respective servants, agents or any other persons claiming through, by or under them, be restrained by an order and injunction of this Hon'ble Tribunal from in any manner dealing with, disposing off or creating any third-party rights or encumbrances or parting with possession of or from alienating the said Property or any part thereof as well as any flats I units being constructed thereon;

f) Pending the hearing and disposal of this Application, this Hon'ble Tribunal be pleased to be order and direct the Respondents to maintain status quo qua the said Property;

g) Ad-interim reliefs in terms of prayer clause (d) to (f) above;

h) Costs for this Application be provided for.

4. I.A No. 4521 of 2023 was filed by Respondent No. 3 in which following

prayers have been made:-

a) Allow the instant Application filed by the Applicant;

b) Declare the Joint Development Agreement dated 18.05.2023 and 18.05.2023 as null and void;

c) Restrain. Respondent No. 1 and 2 to not create any third party right on the land admeasuring about 73 acres situated at survey No. 57, Village Shamsguda, now known as Balanagr Mandak, Ranga Reddy District, Telangana as the same contains the indivisible asset of the Corporate Debtor during the pendency of the instant insolvency proceedings in the case of the Corporate Debtor herein;

d) Stay the effect/implementation of Development Agreement cum General Power of Attorney, dated 18.05.2023, executed between Respondent No. 1 and Respondent No. 3, and Development Agreement cum General Power of Attorney, dated 18.05.2023, executed between Respondent No. 2 and Respondent No. 3 during the pendency of the instant Application;

e) Direct Ld. Resolution Professional to file Lis Pendens/ Application/u/s 52 of the Transfer of Property Act before the competent authority;

f) Direct Ld. Tahsildar, Balanagar Mandal, Kukatpalli, Medchal-Malkajgiri District to cancel the DGPA no- 1/2023 & 2/2023 dated 18.05.2023;

g) Direct the District Magistrate to grant instruction to District Revenue Officer to restrict future sell-purchase and not to change nature of the land; and

h) Grant an ex-parte ad interim order in terms of prayer (d) above.

5. In both the applications, it was argued that parcel of land admeasuring

100 acres situated at Survey No. 57, Village Shamsguda (now known as

Balanagar Mandal), Ranga Reddy District, Telangana (herein referred to as

'the Property') was owned by the Appellants.

6. The Appellants entered into an agreement to sell dated 19.12.2006 and

Joint Venture Agreement (JVA) on the same day with CD. The Appellants agreed to sell an area of 26 acres out of the property for a sum of Rs. 39 Cr.

Thereafter, a deed of sub-division dated 16.02.2012 was executed by which

the Appellants and the CD sub divided the property as per their respective

shares under the agreement to sell and JVA dated 19.12.2006.

7. JVA dated 19.12.2006 was cancelled by a JVA dated 26.09.2015 by

which the parties had agreed to jointly develop the land admeasuring 73 acres

out of the property. In the JVA dated 26.09.2017 it was also agreed between

the parties that CD shall be entitled to the receivables to the extent of 55%

after development is carried out in respect of 73 acres of land and 45% shall

be the share of the Appellants/owners.

8. It is contended that a sister concern of the CD, namely, M/s Excel

Arcade Pvt. Ltd. (EAPL) approached the Punjab and Maharashtra Cooperative

Bank (PMC Bank) for mortgage term loan of Rs. 100 Cr. which was

sanctioned. The CD assigned its receivables arising out of the development

rights in favour of the Bank to secure the amount of loan sanctioned to the

sister concern of the CD, alongwith corporate guarantee.

9. It has come in the impugned order that in the meantime PMC Bank

was amalgamated with the Unity Small Finance Bank Ltd. (Unity Bank)

(Respondent No. 3) by way of scheme, 2002 which was approved by the

Central Govt. whereby the assets and liabilities of the PMC Bank were

transferred to the Unity Bank w.e.f. 25.01.2022. Consequently, the security

interest over the CD's right in the said property which was assigned to PMC

Bank got transferred to the Unity Bank. It is also alleged that during the

period of moratorium, the Appellants executed two agreements i.e.

Development Agreement cum General Power of attorney dated 18.05.2023 and Development Agreement cum General Power of attorney dated

18.05.2023 out of which one agreement was executed by Appellant No. 1 with

R2 and second agreement was executed by Appellant No. 2 with R2.

10. Since, two agreements were executed during the period of mortarium,

therefore, the application i.e. I.A No. 3781 of 2023 was filed by the RP and I.A

No. 4521 of 2023 was filed by Respondent No. 3 with the prayer that these

two agreements may be declared null and void.

11. Both the applications were heard by the Technical Member as well as

Judicial Member but they have written their separate judgements in which

Technical Member has finally observed that :-

22. However, apart from the contentions raised herein, we see that there is evidence showing per se termination of the JVA or any correspondence thereof. Therefore, we deem it fit to say that the rights and interest of the Corporate Debtor under the said agreements subsist in its real essence.

26. However, we refrain from adjudication of the same since these issues surrounding the JVA are not due to or related to the insolvency of the Corporate Debtor. We also note that prayer 'a' and 'c' of the RP in IA/3781/2023 are declaratory in nature. We are of the view that the issues raised by the Respondents as well as the illustrative references given in Paras 17, 19, 20 and 24 are such which requires elaborate evidence and detailed examination and interpretation of the said agreements and to determine the extent of the rights of the parties under the said agreements. Moreover, the said JVA was executed before the initiation of CIRP of the Corporate Debtor and dispute relating thereto has also not triggered due to or during the insolvency of the Corporate Debtor considering the deeds of cancellation dated 07.04.2024.

28. Thus, based on the facts and circumstances in the present case, we are of considered view that the JVA agreement and the subsequent assignment deed vest certain rights and interest on the Corporate Debtor and Unity Bank in the said property, however, as regards further investigation in the matter, we hold that such issues are dehors the insolvency of the Corporate Debtor that need detailed trial and examination of evidence which cannot be decided in summary procedure of this Tribunal but should be adjudicated by the appropriate and competent court.

29. However, we also clarify here that this Tribunal's decision to refrain from scrutinizing the intricated issues surrounding the JVA as well as the assignment deed shall not fetter the lawful right/interest of the Corporate Debtor over the property in question. At the same time, the Corporate Debtor cannot also be benefitted with a better right than what it is entitled to under the said agreements, the precise determination of which requires a more detailed analysis. We refer to the decision in Maharashtra Industrial Development Corporation vs. Santanu T. Ray [Company Appeal (AT) (Ins) No. 1004 of 2021], wherein Hon'ble NCLAT held that "what rights and liability Corporate Debtor had to the plot, in question, the same at best can be transferred to the Resolution Applicant in event any Resolution Plan is approved. The Resolution Applicant cannot acquire better right nor can wash out its liability under the lease deed merely on the ground that Resolution Plan has been approved."

30. Accordingly, prayers 'a' and 'c' of IA 3781/2023 seeking declaration of Corporate Debtor's entitlement under the JVA agreement are disposed of in view of observations made hereinabove.

31. In the result, IA 4521/2023 and prayers 'b' and 'd' to 'g' in IA 3781/2023 seeking nullification of development agreements dated 18.05.2023 and consequential reliefs are dismissed as infructuous, and prayers 'a' and 'c' in IA 3781/2023 seeking declaration of Corporate Debtor's right with respect to the said property are disposed of.

12. Whereas the Judicial Member who has written his own judgment has

recorded his finding in para 43, 45 and 46 which are also reproduced as

under:-

43. However, we are unable to agree with the submission of Mr. Kapadia. The terms and conditions of the JV Agreement enumerated above clearly vests rights, title and interest in favour of the Corporate Debtor. Similarly, the Assignment Agreement dated 16.08.2018 has been signed by Respondents 1 and 2 as 'Confirming Party' and they cannot take a u-turn at this stage. There is nothing on record to show that any notice of repudiation or termination of JV Agreement dated 26.09.2015 was given by the Respondent No. 1 and 2 prior to initiation of corporate insolvency of the Corporate Debtor. In our view, Respondents could not have terminated the JV agreement dated 26.09.2015 executed with the Corporate Debtor during subsistence of the moratorium.

45. In view of the Deed of cancellation executed by Respondents 1 & 2, we are not called upon to decide further as to what are the rights, title and interests of the parties under various agreements. Suffice to say that the rights, title and interests of the Corporate Debtor arising out of the JV Agreement dated 26.09.2015 and Assignment Agreement 16.08.2018 continue to subsist in favour of the Corporate Debtor.

46. Accordingly, the interim protection granted vide order dated 08.11.2023 is made absolute till approval of the Resolution Plan by this Tribunal.

13. The Impugned order was assailed, inter alia, on the ground that both

the Members have expressed contradictory views in their respective orders,

therefore, the matter should have been decided by a 3rd member in accordance

with the provisions of the Companies Act, 2013 and NCLT Rules, 2016.

14. In this regard, the contention of the Appellant was noticed by this court

in the order dated 02.07.2025 which is also reproduced as under:-

02.07.2025: This appeal is filed by the two appellants who were Respondents No. 1 and 2 before the Tribunal in the application bearing I.A No. 3781 of 2023 and 4521 of 2023 which was filed by the RP of the CD and Unity Small Finance Bank Ltd. seeking various reliefs therein.

2. The Tribunal while hearing I.A No. 3781 of 2023 passed an order on 08.11.2023 in the following manner:-

"We hereby direct that no third-party rights be created qua the property under agreement dated 26.09.2015 till next date of hearing"

3. Both the applications were disposed of by a bench comprising Ms. Lakshmi Gurung, Member (J) and Mr. Charanjeet Singh Gulati, Member (T) vide their order dated 06.08.2024.

4. The appellants are stated to be aggrieved against the confirmation of the order dated 08.11.2023 which is alleged to have been passed only by M (J).

5. The contention of Sr. Counsel for the Appellant is that the order dated 08.11.2023 has not made absolute by the M(T) while disposing of both the applications.

6. On the other hand, Counsel appearing for Respondents have submitted that there is no difference of opinion between the members on the same issue. However, what transpires from Rule 60(3) of the NCLT Rules, 2016 is that in case, the members who have heard the case are equally divided in passing the order or judgment, then the President shall constitute a Bench as provided in sub-section (5) of section 419 of the Act.

7. Supposing the contention of the Counsel for the Appellant is correct that there is a difference of opinion in regard to grant of stay between both the members then as per Rule 60(3) and Section 419 (5) the matter has to be referred to the Ld. President for the purpose of referring the issue of stay to a third member but before reaching to that conclusion, we call upon the Appellants to file an affidavit explaining as to how there is a difference of opinion in writing the impugned order on a same issue between both the members.

8. Let the affidavit be filed within a week with advance copy to the Respondent.

9. The Respondent may file their counter within a week thereafter. Adjourned to 18th July, 2025.

15. Apropos the aforesaid order, the Appellant filed the affidavit of Prithviraj

B Salgar dated 09.07.2025 in which it has been mentioned that the impugned

order deserves to be set aside for the following two reasons which are

reproduced as under:-

"8. The impugned judgment deserves to be set aside inter alia for the following reasons:

i.) The rationale of both the Hon'ble Technical and Judicial Members is completely contrary to each other. While the Hon'ble Technical Member's judgment holds that the matter cannot be decided under the summary procedure under the IBC and is required to be gone into before an appropriate and competent court and therefore, no interim order has been granted by the Hon'ble Technical Member; the Hon'ble Judicial Member confirms the interim order and makes it absolute. ii.) Both the Hon'ble Technical and Hon'ble Judicial Members have signed both the judgments in as much as both the members have signed at the end of the two judgments. Thus, the Hon'ble Judicial Member has also signed the judgment of the Hon'ble Technical Member and the Hon'ble Technical Member has also signed the judgment of the Hon'ble Judicial Member. Therefore, the entire judgment is flawed and illegal and self- contradictory. Since, both the members have accepted both contrary views by each of them. Thus, the entire judgments deserves to be aside on this short ground alone.

16. Counsel for the Appellant has orally also made the same submissions

that both members have given different views as the Technical Member has

not confirmed the interim order whereas the Judicial Member has made the

interim order dated 08.11.2023 absolute. It is also submitted that the

Technical Member in respect of JVA dated 26.09.2015 has observed in para

28 that JVA Agreement and the subsequent assignment deed vest certain

rights and interest on the CD and Respondent No. 3 but the matter requires

further investigation because the intricate issues cannot be decided in a

summary procedure and has to be decided by an appropriate and competent

court whereas the judicial member has held that the terms and conditions of

the JVA dated 26.09.2015 clearly vests rights, title and interest in favour of

the CD. It is submitted by him that the Technical Member is of the view that

the JVA and subsequent assignment deed only vests certain rights and

interest on the CD whereas the Judicial Member is of the view that it would

vest right, title and interest. The word 'title' is conspicuous by its absence in

the order passed by the Technical Members which has a great significance in

respect of controversy at hand.

17. It is also pertinent to mention that the Appellants, in its ground of

appeal, has also submitted that "However, the Hon'ble Member (Judicial)

granted the said interim protection in paragraph 46 of the impugned order.

In the said regards, it is most respectfully submitted that in such a situation

it was incumbent upon the Hon'ble Tribunal to refer the matter to the Hon'ble

President in terms of Section 419(5) of the Companies Act, 2013 for

determination on the issue of granting the interim order."

18. On the other hand, Counsel for the Respondent No. 1 and 3 has

vehemently argued in support of the order passed by the Tribunal contending

that there is no error in the orders passed by the Technical Member as well

as the Judicial Member though separately passed but the conclusion drawn

by both of them is the same. It is also submitted that the order contained in

para 46 of the impugned order regarding interim protection is the order

passed by both the members. Counsel for the Respondents have also

submitted that both the members are ad-idem with the cancellation of

development agreements on 07.04.2024 and thus the prayer made in both

the applications qua execution of the said agreement had become infructuous.

It is submitted that there is no merit in the appeal which calls for any

interference by this Court much less for referring the matter to the President

of the NCLT in terms of Section 419(5) r/w Rule 60(3).

19. We have heard Counsel for the parties and perused the record with their

able assistance.

20. From the narration of the aforesaid facts and circumstances, one fact

is clear to us that there was an interim order granted by the Tribunal on

08.11.2023. It is also apparent that both the members have written their own judgments. The Judicial Member while writing his judgment has not said that

he is concurring with the judgment rendered by the Technical Member and

recording his separate reasons. It is also not in dispute that the Technical

Member has not made the order dated 08.11.2023 absolute whereas the said

order has been made absolute by the Judicial Member. The Technical Member

has clearly recorded in para 28 of the impugned order that JVA dated

20.09.2015 and subsequent assignment deed vests right and interest in the

CD and the Bank whereas the Judicial member has recorded in para 43 and

45 that the said two documents create a right, title and interest. It is also

clear from the record that the Technical Member has observed that the further

investigation about the JVA and subsequent assignment deed cannot be made

in the summary procedure conducted under the Code but same requires a

detail adjudication by the appropriate and competent court. However, this

view has not been expressed by the Judicial Member in para 45 in which he

has observed that right, title and interest of the CD arising out of JVA

20.09.2015 and the subsequent assignment deed continued to subsist to the

CD.

21. The aforesaid discrepancies noted by this court in the impugned order

though passed separately by both Technical Member and Judicial Member

calls for determination by a 3rd Member to opine about correctness of the view

of either of the Member.

22. In this regard, the law prescribes under Section 419(5) of the Act that

"If the Members of a Bench differ in opinion on any point or points, it shall

be decided according to the majority, if there is a majority, but if the Members

are equally divided, they shall state the point or points on which they differ, and the case shall be referred by the President for hearing on such point or

points by one or more of the other Members of the Tribunal and such point

or points shall be decided according to the opinion of the majority of Members

who have heard the case, including those who first heard it."

23. Rule 60(3) provides that "(3) In case the members who have heard the

case are equally divided in passing the order or judgment, then the President

shall constitute a Bench as referred in sub-section (5) of section 419 of the

Act."

24. In the present case, there was an interim order passed on 08.11.2023

which has not been made absolute by the Technical Members and has been

made absolute by the Judicial Member. This discrepancy in their order is

sufficient for this Court to invoke Section 419 (5) as well as Rule 60(3),

therefore, we dispose of this appeal and refer this case to the President of the

NCLT to place the matter before the 3rd Member, in accordance with law, for

seeking his opinion about correctness of the view either of the Technical

Member or Judicial member.

25. The matter is remanded back and the parties are directed to appear

before the President of the NCLT on 7th October, 2025.

26. The appeal is therefore disposed of in the above terms. The parties shall

bear their own costs. I.As, if any, pending is/are hereby closed.

27. While parting with this order, we may clarify that we have not made any

observation on the merit of the case.

28. The interim order dated 08.11.2023 passed by the Tribunal shall

continue till the appearance of the parties before the Tribunal. Since, it is a case of admission of the application under Section 7 of the year 2019,

therefore, the Tribunal is requested to decide the matter expeditiously.

[Justice Rakesh Kumar Jain] Member (Judicial)

[Justice Md. Faiz Alam Khan] Member (Judicial)

[Mr. Naresh Salecha] Member (Technical)

Sc/RR