New Okhla Industrial Development ... vs Mr. Manohar Lal Vij & Anr. & Ors

IN THE MATTER OF: New Okhla Industrial Development Authority Main Administrative Building Sector 6, Noida, Uttar Pradesh - 201 301 ...Appellant

Versus

1. Manohar Lal Vij Resolution Professional of Logix City Developers Pvt. Ltd. 3rd Floor, 8/28 Abdul Aziz Road, Karol Bagh, New Delhi-110005 ...Respondent No.1

2. Gedpec Infratech Limited 7A Floor, Tower B, Plot No. 8, Noida One, Block B, Sector 62, Noida - 201 307 ...Respondent No.2

Present: For Appellant : Mr. Rachit Mittal, Mr. Kanishk Raj, Mr. Abhishek Sinha and Ms. Srishti Agarwaal, Advocates

For Respondent : Mr. Vishal Hirawat and Mr. Abhishek Devgan, Advocates

JUDGMENT

(Hybrid Mode)

[Per: Arun Baroka, Member (Technical)] The present appeal is filed under Section 61(1) of Insolvency and

Bankruptcy Code, 2016 ("Code") by the Appellant namely, New Okhla

Industrial Development Authority against the order dated 05.03.2024 of the Hon'ble National Company Law Tribunal, New Delhi, Bench-III in

Interlocutory Application No. 6075 of 2023 in CP(IB) No. 440 (ND)/2021.

2. The Appellant seeks to set aside the order in the above-mentioned IA

No. 6075/2023 and also to direct Respondent No.1 i.e. RP to admit the claim

of the Appellant to the tune of Rs.6,07,74,76,966/-.

Submissions of the Appellant - NOIDA

3. Appeal has been filed on behalf of the New Okhla Industrial

Development Authority (hereinafter referred to as 'Appellant') against the

order dated 05.03.2024 (hereinafter referred to as 'Impugned Order') of the

Hon'ble National Company Law Tribunal, New Delhi, Bench III in

Interlocutory Application bearing IA No. 6075 of 2023 in CP (IB) No. 440

(ND)/2021 (hereinafter referred to as 'Application'). The Appellant was the

Applicant in the aforesaid Application.

4. Appellant contends that the NCLT passed the impugned order on the

assumption that the aforesaid application was filed by the

Appellant/Applicant for non-compliance of the order dated 18.10.2023.

However, it is contended that the Respondent No.1 admitted only a portion of

appellant's claim, particularly excluding additional farmer compensation and

time extension charges. Thus, the aforesaid application was vis à vis the

admissibility and quantum of Appellant's claims as the secured operational

creditor in the CIRP of the Corporate Debtor.

Company Appeal (AT) (Insolvency) No. 691 of 2024 2 of 30

5. Appellant contends that on 08.06.2011, a Lease Deed was executed in

the favour of the Corporate Debtor by the Appellant for Plot No. GH-02, Sector

143, Noida admeasuring a total area of 1,00,080.98 sq. mtrs.

6. Further, on 21.10.2011, the Hon'ble High Court of Judicature at

Allahabad, in the case of Gajraj & Ors. v. State of U.P. & Ors., rendered a

judgment through a full bench, granting an additional 64.7% compensation

to the farmers, with the liberty given to the Appellant herein to recover the

same from the allottees. This judgment was subsequently upheld by the

Hon'ble Supreme Court in Savitri Devi v. State of U.P., reported in (2015)

7 SCC 21. Thereafter, in terms of the aforementioned judgment of the Hon'ble

Allahabad High Court, certain office orders dated 20.12.2013, 04.04.2014,

14.07.2014 and 04.08.2014 were issued by the Appellant to the Corporate

Debtor. Office order dated 14.07.2014 categorically mentions that the

enhanced compensation would be recovered from the allottees of the

concerned land.

7. The Appellant vide letter dated 22.05.2017 informed the Corporate

Debtor about the 64.7% additional compensation paid to farmers and also

informed the Corporate Debtor to deposit an amount of Rs. 2,93,97,586.90

within 30 days of the issuance of the issuance of letter. [Note: This was for

full one lakh sq. mtr. of leased land]

8. Furthermore, on 30.10.2018, out of the entire leased area of

1,00,080.98 sq. mtrs. allocated to the Corporate Debtor, the Appellant

executed a sub-lease deed for 13,961 sq. mtrs. in favor of M/s Docile

Company Appeal (AT) (Insolvency) No. 691 of 2024 3 of 30 Buildtech Private Limited, leaving 86,119.98 sq. mtrs. with the Corporate

Debtor. While permission for sub-division was granted to the Corporate

Debtor's subsidiaries, M/s. Docile Buildtech Pvt. Ltd. and M/s. Arable

Builders Pvt. Ltd., the sub-lease deed was executed only in favor of M/s.

Docile Buildtech Pvt. Ltd. The permission to sub-divide the land for M/s.

Arable Builders Pvt. Ltd. was revoked due to the Corporate Debtor's failure to

meet certain conditions. Consequently, the area intended for sublease to M/s.

Arable Builders Pvt. Ltd. was never sub-leased and remains leased to the

Corporate Debtor.

9. The Corporate Insolvency Resolution Process ("CIRP") qua the

Corporate Debtor commenced vide an order dated 17.08.2022. The Appellant

filed its claim on 01.09.2022 under Form 'B' as an Operational Creditor for

an amount of Rs. 6,07,74,76,966/-, supported by all necessary documents,

including detailed calculations. However, the Respondent No.1 - RP vide email

dated 03.09.2022 provisionally admitted the claim of the Appellant only to the

tune of Rs. 5,13,97,26,617/-. In the claim calculation sheet, no reasons were

attributed with respect to farmer's compensation or time extension charges.

10. Appellant further claims that despite receiving all the relevant

documents, including calculation sheets, through various emails dated

23.03.2023, 01.04.2023, 12.04.2023, and 21.04.2023, Respondent No.1 - RP

failed to admit the entire claimed amount, admitting only 600,92,77,327 out

of the total claim submitted, initially reasoning that the farmer's

compensation clause was not part of the lease deed. However, after the

Hon'ble NCLT, by order dated 18.10.2023 in IA No. 2972 of 2023, directed

Company Appeal (AT) (Insolvency) No. 691 of 2024 4 of 30 Respondent No. 1 to admit the claim based on judicial pronouncements.

Respondent No. 1 then shifted its position and began demanding documents

that fall beyond the scope of the current CIRP. This refusal to admit the

aforesaid claims is in direct contravention of Section 25(2)(e) of the IBC, which

mandates the RP to collect and verify all claims against the Corporate Debtor.

The subsequent demand for additional documents, despite the NCLT's clear

direction vide order dated 18.10.2023, is unjustified and exceeds the RP's

authority under the IBC.

11. Appellant further contends that the Respondent No. 1 had already been

provided with a copy of the order in the Gajraj judgment (supra) and the

required calculations as requested in the initial emails. Nevertheless,

Respondent No. 1, despite receiving all necessary documents and

calculations, has failed to admit certain amounts under the heads of time

extension charges and additional farmers' compensation, which constitutes a

dereliction of the duties entrusted to the RP.

12. Subsequently, the Appellant filed an application bearing the IA No.

6075 of 2023 before NCLT, seeking admission of entire claim for a tune of Rs.

6,07,74,76,966/-. However, the Hon'ble NCLT vide Impugned Order dated

05.03.2024 observed that the Respondent No.1 has complied with the order

dated 18.10.2023 and disposed of the aforementioned Application. Aggrieved

by this decision, the instant appeal has been preferred by the Appellant before

this Hon'ble Court.

Company Appeal (AT) (Insolvency) No. 691 of 2024 5 of 30

13. Appellant contends that the Resolution Professional's duty extends to

admitting and verifying claims but does not encompass adjudicating them. In

the instant case, the exclusion of substantial portions of the Appellant's claim,

specifically Rs. 6,81,99,639/- out of the total claim amount of

Rs.6,07,74,76,966/-, undermines the Appellant's rights as a secured creditor.

Furthermore, NCLT's impugned order reflects a misinterpretation of the facts

and law, particularly the binding nature of the judicial orders regarding the

land acquisition and related compensation passed by Hon'ble Supreme Court

and Hon'ble Allahabad High Court. The aforesaid impugned order fails to

recognize the statutory and contractual obligations of the Corporate Debtor

towards the Appellant. Additionally, the legal obligations under the lease deed

and subsequent orders are clear and unequivocal, warranting the full

admission of the Appellant's claims. It is also pertinent to note that the

Hon'ble NCLT, vide its order dated 18.10.2023 in IA No. 2792 of 2023,

acknowledged the correctness of the Appellant's time extension calculations.

Further, the documents provided for farmer's compensation was also deemed

sufficient, thereafter, Hon'ble NCLT directed Respondent No. 1 for full

admission of the Appellant's claims.

14. The NCLT has failed to enforce its own order dated 18.10.2023, which

directed the RP to admit the entire claim sought by the Appellant. Despite this

order, the RP continued to demand unnecessary documentation from the

Appellant. Furthermore, the RP's refusal to admit the Appellant's claim

violates the terms of the lease deed and disregards binding judicial

precedents. The Respondent No.1 does not have the authority to override

Company Appeal (AT) (Insolvency) No. 691 of 2024 6 of 30 these terms or to adjudicate claims, as its role is strictly limited to verification

under the IBC. Thus, this brazen abuse of law and conduct by the Respondent

No.1 is in direct violation of the order dated 18.10.2023 passed by the Hon'ble

NCLT which undermines the integrity of the judicial process.

15. The Respondent No.1's refusal to properly verify the Appellant's claim,

despite being provided with all relevant documents, demonstrates a failure to

apply judicial mind as required under Regulation 13 of the IBBI (Insolvency

Resolution Process for Corporate Persons) Regulations, 2016. This failure has

resulted in significant prejudice to the Appellant's position as a secured

creditor.

16. Furthermore, NCLT has failed to consider the binding judgment in

Gajraj (supra). Respondent No. 1's refusal to admit approximately Rs. 7 crores

of the Appellant's claim blatantly disregard the Appellant's rights under these

binding judicial precedents, thereby undermining the Appellant's position as

a secured creditor. Notably, the Hon'ble NCLT's omission to consider the

material facts and evidence presented by the Appellant has led to an

erroneous decision, unsupported by evidence or records, and fails to

adequately recognize the Appellant's legal and factual standing.

17. The Appellant contends that the Corporate Debtor was informed the

corporate debtor about the 64.7% additional compensation paid to the

farmers and also raised the demand to the tune of Rs.2,93,97,586.90 as share

of additional compensation vide letter dated 22.05.2017 and the same has not

been disputed by the Corporate Debtor up to the date of commencement of

Company Appeal (AT) (Insolvency) No. 691 of 2024 7 of 30 CIRP. Now the Resolution Professional, on one pretext or the other is trying

to reject and has rejected the claim qua the farmer's compensation.

18. Appellant further claims that the second claim qua the time extension

has already been clarified vide letter dated 01.11.2023 mentioning that the

time extension charges up to 17.08.2022 comes to Rs.47,34,10,209.88, which

initially was Rs.47,73,81,468/- (calculated up to 07.09.2022). Whereas, the

Resolution Professional has admitted an amount of Rs.46,82,53,478/-

instead of Rs.47,34,10,209.88, leaving unadmitted amount qua time

extension of Rs.51,56,731.88. Therefore, the total unadmitted amount which

includes unadmitted claim amount and unadmitted time extension amount

is Rs.6,42,28,380.88 [Rs.5,90,71,649 + 51,56,731.88].

19. In light of the foregoing submissions, the Appellant prays that the

appeal of the appellant may be allowed and Resolution Professional may be

directed to admit the unadmitted claim amount of Rs.6,42,28,380.88.

Submissions of the Respondent No. 1 - RP

20. The Appellant, NOIDA, had filed claim for Rs. 6,07,74,76,966/- in the

CIRP of the Corporate Debtor. Respondent No.1 - RP, verified the aforesaid

claim submitted by Appellant and provisionally admitted the claim to the tune

of Rs. 5,13,97,26,671/- and informed the Appellant vide email dated

03.09.2022.

21. Subsequently, Appellant filed an Application before Ld. NCLT seeking

directions for admission of part of the claim filed by Appellant, which was

rejected by the Respondent for non-submission of sufficient

Company Appeal (AT) (Insolvency) No. 691 of 2024 8 of 30 documents/clarifications. Some additional documents were annexed with the

application to substantiate its claim. Ld. NCLT vide Order dated 18.10.2023

directed the Answering Respondent to examine all the issues and take

appropriate decision in accordance with law.

22. Consequent to the Order dated 18.10.2023 passed by the Ld. NCLT,

Respondent No. 1 - RP vide email dated 31.10.2023 apprised Appellant

regarding the Order passed by Ld. NCLT and sought certain clarifications/

details for admitting the remaining portion of the claim. Subsequently,

Respondent No. 1 - RP admitted the claim of Appellant to the extent of

Rs.600,92,77,327/- and apprised the Appellant vide email dated 06.11.2023.

23. Thereafter, Appellant filed another IA No. 6075/2023 before the Ld.

NCLT seeking directions for admission of remaining claim amount, i.e.

Rs.6,81,99,639/-. The Ld. NCLT vide Order dated 05.03.2024 disposed of the

IA filed by Appellant and noted that there is no non-compliance of the Order

dated 18.10.2023.

24. Present Appeal has been preferred by the Appellant, seeking admission

of entire claim of Appellant to the tune of Rs. 6,07,74,76,966/-. It is apposite

to note that Appellant in its revised calculation has itself reduced the claim

towards time extension charges by Rs.39,71,258.12, thus reducing the

claimed amount to Rs. 6,07,35,05,708/-, yet in the present Appeal, Appellant

has sought for admission of claim of Rs. 607,74,76,966/-.

25. As a background it is to be noted that Appellant, by way of registered

lease deed dated 08.06.2011 leased out Plot No. GH-02, Sector 43, Noida,

Company Appeal (AT) (Insolvency) No. 691 of 2024 9 of 30 admeasuring 1,00,080.98 sq. mtr. in favour of Corporate Debtor, for a period

of 90 years commencing from 08.06.2011, against the consideration agreed

between the parties, for development of group housing project on the leased

land. Thereafter, a tripartite sub-lease deed dated 30.10.2018 was executed

between Corporate Debtor, Appellant and Docile Buildtech Private Limited,

and the Land admeasuring 13,961 sq. mtr. was sub-leased in favour of Docile

Buildtech Private Limited. Further, the net liability towards Appellant, as on

the date of sub-lease deed, was divided between the Corporate Debtor and

Docile Buildtech Private Limited in proportion to the land area leased/sub-

leased to the respective parties. Accordingly, liability of Corporate Debtor is

only limited to 86,119.98 sq. mtr. of land.

26. The Appellant's claim comprises of six distinct components. Of these,

four components have been fully admitted, whereas the claims relating to

farmers' compensation and time extension charges remain contested.

27. Initially, the Appellant in its claim had computed farmers'

compensation for 100080.98 Sq. Mtr., despite the fact that the claim of

Corporate Debtor was limited to only 86,119.98 Sq. Mtr. of land. The claimed

amount towards farmers' compensation was for Rs. 5,90,71,649/-.

Subsequently, Appellant provided another calculation sheet for farmers'

compensation, wherein land area has been simply changed from 100080.90

Sq. Mtr. to 86,119.98 Sq. Mtr. without any claim to the amount of claim. In

both the calculation sheets submitted by the Appellant regarding farmer's

compensation, the initial amount due is shown as Rs. 2,93,97,587/- as on

22.06.2017. Accordingly, for substantiation of claim the Respondent vide

Company Appeal (AT) (Insolvency) No. 691 of 2024 10 of 30 email dated 31.11.2023 sought following details to authenticate amount of

Rs. 29397587 and accrued interest thereon:

a. Total additional compensation paid

b. Total area for which compensation paid

c. Total percentage of land belonging to Corporate Debtor out

of total land

d. % Share of Corporate Debtor in the compensation

e. Date of payment of compensation (to check interest

calculation).

28. Till date the Appellant has not provided any of the aforementioned

details and hence, the claim towards farmers' compensation remains

unsubstantiated and hence, has not been admitted.

29. The time extension charges are to be computed at the specified rate on

the allotment rate. Allotment of land admeasuring 100,080.98 sq. mtr. was

made at Rs. 235,69,07,079/-. Subsequently, land admeasuring 13,961 sq.

mtr. was sub-leased and only 86,119.98 sq. mtr. of land remains to be leased

to the Corporate Debtor. Thus, the proportionate allotment rate for 86,119.98

sq. mtr. is computed to be Rs. 202,81,25,529 [235,69,07,079 x

86,119.98/100,080.981].

30. The Appellant initially claimed an amount of Rs. 47,73,81,468/-

towards time extension charges, out of which Rs. 46,82,53,478/- was

admitted. Subsequently, the Appellant itself reduced the claim to

Rs.47,34,10,209.88, reflecting a reduction of Rs. 39,71,258.12 due to an

Company Appeal (AT) (Insolvency) No. 691 of 2024 11 of 30 incorrect calculation. However, in the present Appeal, the Appellant has

arbitrarily reverted to the original claim of Rs. 47,73,81,468/-contradicting

its own prior admissions of wrong calculation. It is noteworthy that the

reduced admission of claim by the Answering Respondent is solely

attributable to the Appellant's erroneous mathematical calculation.

31. Initially, Appellant computed the time extension charges of Rs.

47,73,81,468/- till 07.09.2022 whereas the CIRP commencement date was

17.08.2022. The same was also observed by the Ld. NCLT in its Order dated

18.10.2023.

32. Consequently, Appellant submitted revised calculation sheet for claim

of Rs. 47,34,10,209.88 computed till CIRP Commencement date i.e.

17.08.2022. Appellant while computing the time extension charges for 5th

year has made some mathematical error and derived amount of

Rs.3,65,91,251.58, whereas the correct amount would be Rs. 3,11,16,446/-

[Rs. 202,81,25,529*70*8/100*365]. Hence, the difference is admitted and

claimed amount.

Analysis and Evaluation

33. We have heard both sides and also perused the material placed on

record.

34. We note that the Appellant-NOIDA, by way of registered lease deed

dated 08.06.2011, leased out Plot No.GH-02, Sector 43, Noida, admeasuring

1,00,080.98 sq. mtr. in favour of Corporate Debtor-Logic City for a period of

90 years commencing from 08.06.2011, against the between the parties, for

Company Appeal (AT) (Insolvency) No. 691 of 2024 12 of 30 development of a group housing project on the leased land. Subsequently, in

the year 2013, the Corporate Debtor by way of joint development agreement

transferred development rights for 13,961 sq. mtr. of land to Saha lnfratech

Private Limited and for 12,486.08 Sq. mtr. of land to Dream Procon Private

Limited. Hence, only 73,633.90 Sq. mtr. of land was being developed by the

Corporate Debtor and remaining portion of land was being developed by Saha

Infratech and Procon respectively. Details regarding development of land as

per records is as extracted below:

35. Thereafter, in the year 2018, Corporate Debtor had approached

Appellant and requested to sub-divide the Land. Later, request of Corporate

Debtor was accepted and Appellant vide letter dated 07.06.2018 approved the

sub-division of Land in the following manner:

Company Appeal (AT) (Insolvency) No. 691 of 2024 13 of 30

36. It was also brought to our notice by the RP that all of the three developer

companies are presently under CIRP. Further RP brings to our that a tripartite

sub-lease deed dated 30.10.2018 was executed between Corporate Debtor,

Appellant and Docile Buildtech Private Limited for transferring Land

admeasuring 13,961 sq. mtr. in favour of Docile Builtech Private Limited.

Further, as per terms of sub lease deed, net liability of the corporate debtor

towards said portion of land, payable to Appellant, as on the date of sub-lease

deed, was also transferred to Docile Buildtech Private Limited. Pertinently, the

land sub-divided in favour of Arable Builders Private Limited was not sub-

leased and hence, that portion of land, i.e. 12,486.08 sq. mtr. of land, even

though being developed by some other company is still in the name of

Corporate Debtor. Hence, as on date the land is divided as under:

37. In view of the above, we agree with the arguments of the RP, accepted

by the AA, that the liability of Corporate Debtor is only limited to 86,119.98

sq. mtr. of land subject to the assumption that NOIDA has not filed/shall not

claim any amount from Dream Procon Private Limited (under CIRP) for the

land admeasuring 12,486.08 sq. mtr. which is being developed by Dream

Procon Private Limited.

38. We find that initially the Appellant had filed claim of about Rs. 607.75

crores (approx.) in the CIRP in the Corporate Debtor. The RP provisionally

Company Appeal (AT) (Insolvency) No. 691 of 2024 14 of 30 admitted the claim to the tune of about Rs. 514/- Crores and informed the

Appellant vide email dated 03.09.2022. The claim submitted by the Appellant

comprised of the following components:

a. Instalments along with interest

b. Re-scheduled instalments along with interest

c. Lease rent dues along with interest

d. 64.7% Farmers Compensation along with interest

e. Time Extension Charges

f. Water & Sewer Charges

39. Subsequently, RP verified the aforesaid claim submitted by Appellant

and provisionally admitted the claim to the tune of Rs. 5,13,97,26,671/- and

informed the Appellant vide email dated 03.09.2022. Answering Respondent

had also shared excel sheet to show how the claim of the Appellant was

calculated and admitted. The following components of the claim were not

admitted or reduced amount was admitted:

o 64.7% Farmers Compensation along with interest

o Time Extension Charges

o Water & Sewage Charges

o Installment & Reschedulement charges

40. We note that the claim of Appellant was admitted on 03.09.2022 and

the Appellant neither raised any objection nor challenged the decision of

Answering Respondent until 23.03.2023. Thereafter, multiple emails were

exchanged relating to non-substantiation of unadmitted portion of claim as

Company Appeal (AT) (Insolvency) No. 691 of 2024 15 of 30 Appellant failed to provide requisite clarification/documents, necessary for

verification and admission of balance claim amount.

41. Subsequently, on 16.05.2023, 9 months after the commencement of

CIRP, Appellant filed IA No. 2792/2023 before the Ld. NCLT seeking directions

against the Answering Respondent herein to admit the claim of Appellant to

the tune of Rs. 6,07,74,76,966. The Adjudicating Authority vide its order

dated 18.10.2023 directed the RP to examine all the issues and take

appropriate decision in accordance with law. Consequently, the Respondent

No.1 - RP sought certain clarifications / details for admitting the remaining

portion of the claim. Basis the reply, the RP admitted the claim of the

Appellant to the extent of Rs.601 Crores (approx.) and apprised the Appellant

vide email dated 06.11.2023. The heads under which the claim amount was

admitted / not admitted have been reproduced hereunder for convenience of

this Hon'ble Tribunal:

Company Appeal (AT) (Insolvency) No. 691 of 2024 16 of 30

42. RP brings to our notice that the claim towards farmers' compensation

was not admitted as Appellant had failed to submit necessary clarifications/

documents to substantiate its claim amount. Further the time extension

charges were reduced as the Appellant had claimed extension charges upto

07.09.2022, whereas the CIRP Commencement date is 17.08.2022 and

accordingly, proportionate claim was admitted.

43. Thereafter, the Appellant filed another IA No. 6075/2023 before NCLT

seeking directions for admission of the remaining claim amount of

Rs.6,81,99,639/-. However, NCLT vide order dated 05.03.2024 disposed of

the IA filed by the Appellant and noted that there is no non-compliance of the

order dated 18.10.2023.

44. In the present appeal, we note that the Appellant is seeking admission

of the entire claim amount of Rs.6,07,74,76,966/-. To find out the merits of

this claim, we now look into the two major issues -one relating to non-

admission of claim towards farmers' compensation and the other relating to

extension of time, which are the main issues raised by the Appellant in this

appeal.

45. With respect to the reasons for non-admission of claim towards farmer's

compensation we find that the Appellant had claimed Rs. 5,90,71,649/-

towards farmers' compensation. As per the initial calculation sheet submitted

by Appellant, the said amount had been calculated for entire 100080.98 Sq.

mtr. of land, whereas, the Corporate Debtor's liability was limited for

86,119.98 sq. mtr. of land only. Subsequently, the Appellant submitted

Company Appeal (AT) (Insolvency) No. 691 of 2024 17 of 30 another calculation sheet for farmers' compensation. wherein the land area

has been simply changed from 100080.98 Sq. mtr. to 86,119.98 sq. mtr.

without any change in the amount of.

46. We also find that both the calculation sheet for the farmer's

compensation, indicate an outstanding amount of Rs. 2,93,97,587/- as of

June 22, 2017. Subsequently, interest at a rate of 14% has been computed

on this sum. However, we find that the Appellant has not provided any

document to explain the basis for arriving at the figure of Rs. 2,93,97,587/-.

We find that the resolution professional had requested the appellant vide

emails dated October 31, 2023, November 21, 2023, and a reminder email on

November 25, 2023, yet the Appellant has failed to substantiate the farmer's

compensation claim.

47. The Appellant claims that the resolution professional cannot adjudicate

over the claims. It relies upon various judicial pronouncements that the

adjudicatory power does not lie with the resolution professional. In the

present matter, the RP has gone beyond the powers so envisaged for him and

has, despite being provided with requisite documents and explanations, failed

to verify the total amount of the claim of the Appellant as was filed by it. We

find that a Resolution Professional is empowered to seek evidence or

clarifications as he deems fit from a creditor for substantiating the whole or

part of its claim as per Regulation 10 of the CIRP regulations governing the

insolvency of corporate persons. Therefore, the Appellant cannot question the

information being sought by the Resolution Professional and cannot claim

that the Resolution Professional has not done its duty. The argument

Company Appeal (AT) (Insolvency) No. 691 of 2024 18 of 30 canvassed by the NOIDA that the resolution professional's duty is only

extended to the admission and verification of the claims but does not

encompass adjudication of the claims. In the facts and circumstances of the

case, we do not find that the resolution professional was adjudicating the

claims. It was only seeking additional information to verify the claims, and

such an argument of the applicant is therefore unsustainable and rejected.

48. The Appellant has placed its reliance on the following judicial

pronouncements in support of the aforementioned contention of the

Appellant:

XXX o Swiss Ribbons Pvt. Ltd. vs. Union of India (2019) 4 SCC 17 (Para No. 88 to 91) Resolution professional has no adjudicatory powers

88. It is clear from a reading of the Code as well as the Regulations that the resolution professional has no adjudicatory powers. Section 18 of the Code lays down the duties of an interim resolution professional as follows:

"18. Duties of interim resolution professional.--(1) The interim resolution professional shall perform the following duties, namely--

(a) collect all information relating to the assets, finances and operations of the corporate debtor for determining the financial position of the corporate debtor, including information relating to--

(i) business operations for the previous two years;

(ii) financial and operational payments for the previous two years;

(iii) list of assets and liabilities as on the initiation date; and

(iv) such other matters as may be specified;

(b) receive and collate all the claims submitted by creditors to him, pursuant to the public announcement made under Sections 13 and 15;

(c) constitute a Committee of Creditors;

(d) monitor the assets of the corporate debtor and manage its operations until a resolution professional is appointed by the Committee of Creditors;

Company Appeal (AT) (Insolvency) No. 691 of 2024 19 of 30

(e) file information collected with the information utility, if necessary; and

(f) take control and custody of any asset over which the corporate debtor has ownership rights as recorded in the balance sheet of the corporate debtor, or with information utility or the depository of securities or any other registry that records the ownership of assets including--

(i) assets over which the corporate debtor has ownership rights which may be located in a foreign country;

(ii) assets that may or may not be in possession of the corporate debtor;

(iii) tangible assets, whether movable or immovable;

(iv) intangible assets including intellectual property;

(v) securities including shares held in any subsidiary of the corporate debtor, financial instruments, insurance policies;

(vi) assets subject to the determination of ownership by a court or authority;

(g) to perform such other duties as may be specified by the Board.

Explanation.--For the purposes of this section, the term "assets" shall not include the following, namely--

(a) assets owned by a third party in possession of the corporate debtor held under trust or under contractual arrangements including bailment;

(b) assets of any Indian or foreign subsidiary of the corporate debtor; and

(c) such other assets as may be notified by the Central Government in consultation with any financial sector regulator."

89. Under the CIRP Regulations, the resolution professional has to vet and verify claims made, and ultimately, determine the amount of each claim as follows:

"10. Substantiation of claims.--The interim resolution professional or the resolution professional, as the case may be, may call for such other evidence or clarification as he deems fit from a creditor for substantiating the whole or part of its claim.

* * *

12. Submission of proof of claims.--(1) Subject to sub-regulation (2), a creditor shall submit claim with proof on or before the last date mentioned in the public announcement.

Company Appeal (AT) (Insolvency) No. 691 of 2024 20 of 30 (2) A creditor, who fails to submit claim with proof within the time stipulated in the public announcement, may submit the claim with proof to the interim resolution professional or the resolution professional, as the case may be, on or before the ninetieth day of the insolvency commencement date.

(3) Where the creditor in sub-regulation (2) is a financial creditor under Regulation 8, it shall be included in the committee from the date of admission of such claim:

Provided that such inclusion shall not affect the validity of any decision taken by the committee prior to such inclusion.

13. Verification of claims.--(1) The interim resolution professional or the resolution professional, as the case may be, shall verify every claim, as on the insolvency commencement date, within seven days from the last date of the receipt of the claims, and thereupon maintain a list of creditors containing names of creditors along with the amount claimed by them, the amount of their claims admitted and the security interest, if any, in respect of such claims, and update it.

(2) The list of creditors shall be--

(a) available for inspection by the persons who submitted proofs of claim;

(b) available for inspection by members, partners, Directors and guarantors of the corporate debtor;

(c) displayed on the website, if any, of the corporate debtor;

(d) filed with the adjudicating authority; and

(e) presented at the first meeting of the committee.

14. Determination of amount of claim.--(1) Where the amount claimed by a creditor is not precise due to any contingency or other reason, the interim resolution professional or the resolution professional, as the case may be, shall make the best estimate of the amount of the claim based on the information available with him. (2) The interim resolution professional or the resolution professional, as the case may be, shall revise the amounts of claims admitted, including the estimates of claims made under sub- regulation (1), as soon as may be practicable, when he comes across additional information warranting such revision." It is clear from a reading of these Regulations that the resolution professional is given administrative as opposed to quasi-judicial powers. In fact, even when the resolution professional is to make a

Company Appeal (AT) (Insolvency) No. 691 of 2024 21 of 30 "determination" under Regulation 35-A, he is only to apply to the adjudicating authority for appropriate relief based on the determination made as follows:

"35-A. Preferential and other transactions.--(1) On or before the seventy-fifth day of the insolvency commencement date, the resolution professional shall form an opinion whether the corporate debtor has been subjected to any transaction covered under Sections 43, 45, 50 or 66.

(2) Where the resolution professional is of the opinion that the corporate debtor has been subjected to any transactions covered under Sections 43, 45, 50 or 66, he shall make a determination on or before the one hundred and fifteenth day of the insolvency commencement date, under intimation to the Board. (3) Where the resolution professional makes a determination under sub-regulation (2), he shall apply to the adjudicating authority for appropriate relief on or before the one hundred and thirty-fifth day of the insolvency commencement date."

90. As opposed to this, the liquidator, in liquidation proceedings under the Code, has to consolidate and verify the claims, and either admit or reject such claims under Sections 38 to 40 of the Code. Sections 41 and 42, by way of contrast between the powers of the liquidator and that of the resolution professional, are set out hereinbelow:

"41. Determination of valuation of claims.--The liquidator shall determine the value of claims admitted under Section 40 in such manner as may be specified by the Board.

42. Appeal against the decision of liquidator.--A creditor may appeal to the adjudicating authority against the decision of the liquidator accepting or rejecting the claims within fourteen days of the receipt of such decision."

It is clear from these sections that when the liquidator "determines" the value of claims admitted under Section 40, such determination is a "decision", which is quasi-judicial in nature, and which can be appealed against to the adjudicating authority under Section 42 of the Code.

91. Unlike the liquidator, the resolution professional cannot act in a number of matters without the approval of the Committee of Creditors under Section 28 of the Code, which can, by a two-thirds majority, replace one resolution professional with another, in case they are unhappy with his performance. Thus, the resolution professional is really a facilitator of the resolution process, whose administrative Company Appeal (AT) (Insolvency) No. 691 of 2024 22 of 30 functions are overseen by the Committee of Creditors and by the adjudicating authority.

o Anuj Jain, IRP of Jaypee Infratech Ltd. vs. Axis Bank Ltd. (2020) 8 SCC 401 (Para No. 53.2)

53.2. In the relevant part, the Court found that NCLAT had fallen in grave error in reading para 77 in Swiss Ribbons dehors the earlier paragraphs. In that context this Court said: (Essar Steel case, SCC pp. 605-06, paras 88-89) "88. By reading para 77 dehors the earlier paragraphs, the Appellate Tribunal has fallen into grave error. Para 76 clearly refers to the UNCITRAL Legislative Guide which makes it clear beyond any doubt that equitable treatment is only of similarly situated creditors. This being so, the observation in para 77 cannot be read to mean that financial and operational creditors must be paid the same amounts in any resolution plan before it can pass muster. On the contrary, para 77 itself makes it clear that there is a difference in payment of the debts of financial and operational creditors, operational creditors having to receive a minimum payment, being not less than liquidation value, which does not apply to financial creditors. The amended Regulation 38 set out in para 77 again does not lead to the conclusion that financial and operational creditors, or secured and unsecured creditors, must be paid the same amounts, percentage wise, under the resolution plan before it can pass muster. Fair and equitable dealing of operational creditors' rights under the said regulation involves the resolution plan stating as to how it has dealt with the interests of operational creditors, which is not the same thing as saying that they must be paid the same amount of their debt proportionately. Also, the fact that the operational creditors are given priority in payment over all financial creditors does not lead to the conclusion that such payment must necessarily be the same recovery percentage as financial creditors. So long as the provisions of the Code and the Regulations have been met, it is the commercial wisdom of the requisite majority of the Committee of Creditors which is to negotiate and accept a resolution plan, which may involve differential payment to different classes of creditors, together with negotiating with a prospective resolution applicant for better or different terms which may also involve differences in distribution of amounts between different classes of creditors.

89. Indeed, by vesting the Committee of Creditors with the discretion of accepting resolution plans only with financial creditors, operational creditors having no vote, the Code itself differentiates between the two types of creditors for the reasons given above. Further, as has been reflected in Swiss Ribbons, most financial creditors are secured creditors, whose security interests must be protected in order that they do not go ahead and realise their security in legal proceedings, but

Company Appeal (AT) (Insolvency) No. 691 of 2024 23 of 30 instead are incentivised to act within the framework of the Code as persons who will resolve stressed assets and bring a corporate debtor back to its feet. Shri Sibal's argument that the expression "secured creditor" does not find mention in Chapter II of the Code, which deals with the resolution process, and is only found in Chapter III, which deals with liquidation, is for the reason that secured creditors as a class are subsumed in the class of financial creditors, as has been held in Swiss Ribbons. Indeed, Regulation 13(1) of the 2016 Regulations mandates that when the resolution professional verifies claims, the security interest of secured creditors is also looked at and gets taken care of."

o GNOIDA Vs. Prabhjit Singh Soni (Civil Appeal No. 7590-7591 of 2023) (Para No. 21 to 22)

Greater Noida Industrial Development Authority v. Prabhjit Singh Soni, 2024 INSC 102 (Civil Appeal Nos. 7590-7591 of 2023; pp. 14-15 of the judgment)

21. Once a claim is submitted with proof under any of the Regulations (i.e., Regulations 7, 8, 8-A, 9 and 9-A), the IRP or the RP, as the case may be, as per Regulation 13, has to verify the claim, as on the insolvency commencement date, and thereupon maintain a list of creditors containing names of creditors along with the amount claimed by them, the amount of their claims admitted and the security interest, if any, in respect of such claims, and update it in terms of Regulation 12 A.

22. As it could be noticed from the CIRP Regulations, 2016, on submission of a claim with proof, the IRP or the RP, as the case may be, has to verify the claim and prepare a list of creditors containing names of creditors along with the amount claimed by them and security interest, if any, the logical conclusion derivable from the provisions analysed above would be that the Form in which a claim is to be submitted under the CIRP Regulations 2016 is directory and not mandatory. What is important is, the claim must be supported by proof. XXX

49. In the facts and circumstances of the case, we do not find that these

judgments are of any assistance to the Appellant, as the resolution

professional was well within its rights to seek additional evidence in support

of the claim and was not doing an adjudication of the claims.

Company Appeal (AT) (Insolvency) No. 691 of 2024 24 of 30

50. Now we look into the reasons for accepting the claim amounting to

Rs.46,82,53,478/- against the asserted sum of Rs 47,73,81,468/- for time

extension charges. The Appellant computed time extension charges up to

September 7, 2022, despite the commencement date of the CIRP being August

17, 2022. This this has been noted by the adjudicating authority in its order

dated 18.10.2023 and notes that "There is no dispute that the Applicant has

calculated the time extension charges up to 07.09.2022 even though the CIRP

commenced on 17.08.2022." Therefore, the resolution professionals'

justification in accepting the reduced amount of at a value of Rs.

46,82,53,478/- as of August 17, 2022, on a proportional basis instead of the

claimed amount of Rs. 47,73,81,468/- as of September 7, 2022 is fully

justified, and the appellants' calculation cannot be accepted.

51. We find that the Respondent No.1 - RP had sought additional

information from the Appellant to justify latter's claims for the farmer's

compensation for the full land of about 1,00,080.98 sq. mtrs. Despite the fact

that the land with the Corporate Debtor was limited to only 86,119.98 sq.

mtrs., the claimed amount by the Appellant towards farmer's compensation

was Rs.5,90,71,649/- for full land. Later on, Appellant provided another

calculation sheet for farmer's compensation wherein the land area was

reduced from 1,00,080.90 sq. mtrs to 86,119.98 sq. mtrs. but without any

change in the total amount of claim. The appellant claims that no charge

pertaining to land dedicated to M/s Docile was ever charged by the appellant

from the Corporate Debtor.

Company Appeal (AT) (Insolvency) No. 691 of 2024 25 of 30

52. However, we note that the farmer's compensation Rs.2,93,97,587/-

remained same in the initial calculation sheet as well as in the revised

calculation sheet. We note that the Appellant has not provided sufficient

evidence to explain the basis for arriving at the figure of Rs. 2,93,97,587,

which was an outstanding amount as of June 22, 2017 with respect to the

farmers' compensation. We note that for substantiation of the claim, the

Resolution Professional sought the following details to authenticate the

amount of Rs. 2,93,97,587 and accrued interest thereon:

o Total additional compensation paid o Total area for which compensation was paid o Total percentage of land belonging to the corporate debtor out of the total land o Percentage share of the Corporate Debtor in the compensation o The date of payment of compensation to check the interest calculation period

However, till date, the Appellant has not provided any of the

aforementioned details. Rightly, the claim towards former's compensation

remains unsubstantiated, and the Resolution Professional was right in not

admitting it.

53. We have gone through the calculations provided by the Appellant as

well as the Respondent No.1 - RP, gone into the justification provided by the

both sides and I have also looked into the material placed on record.

54. We find that the Respondent No.1 - RP was justified in asking some

additional information which was sought by it and which is noted as below:

Company Appeal (AT) (Insolvency) No. 691 of 2024 26 of 30 "a. Total additional compensation paid b. Total area for which compensation paid c. Total percentage of land belonging to Corporate Debtor out of total land d. % Share of Corporate Debtor in the compensation e. Date of payment of compensation (to check interest calculation)."

55. Therefore, we find that the farmers compensation remained

unsubstantiated and Respondent No.1 - RP cannot be faulted in not admitting

the claim as presented by the Appellant.

56. With respect to time extension charges, we note that the total allotment

charges for the land was Rs.235,69,07,079/- for the land of 100,080.98 sq.

mtrs. Once land of about 13,961 sq. mtrs. was taken away from the Corporate

Debtor only 86,119.98 sq. mtrs. of land remained available on lease with the

Corporate Debtor. Therefore, the proportionate allotment rate for 86,119.98

sq. mtrs. was correctly computed by Respondent No.1 - RP to the extent of

Rs. 202,81,25,539/- (235,69,07,079*86,119.98/1,00,080.98).

57. We further note that the Appellant had initially claimed an amount of

Rs.47,73,81,468/- towards time extension charges, out of which

46,82,53,478/- was admitted. Subsequently, the Appellant reduced the claim

to Rs.47,34,10,209.88 reflecting a reduction of Rs.39,71,258.12 due to an

incorrect calculation. But we note that the present appeal still claims the

original amount of Rs.47,73,81,468/-.

58. The Appellant computed the time extension charges of Rs.

Rs.47,73,81,468/- till 07.09.2022, but it did not account for the insolvency

commencement date of 17.08.2022. Accordingly, the RP had recalculated this

Company Appeal (AT) (Insolvency) No. 691 of 2024 27 of 30 amount and the amount works out to be Rs.47,34,10,209.88, which was

computed till the insolvency commencement date i.e. 17.08.2022.

59. Furthermore, we also notice that Respondent No.1 - RP had also

brought to the notice of the Appellant about incorrect calculation with respect

to the 5th year, which has been brought on record, which is calculated as

follows:

"Instead of 365,91,251.58 the correct amount should be Rs.31116446 (202,81,25,529*70*8/100*365)."

60. Appellants' claims that Respondent No.1 - RP had contravened Section

25(2)(e) of the Code, which mandates the RP to collect and verify all claims

against the Corporate Debtor and it should not have sought additional

documents. We have gone through the provisions of the Code and the

Regulations and it clearly provides that the RP has to maintain and update

list of claims and while doing so can seek additional documents and

clarifications, is a part of its duty. This cannot be considered as an

adjudicatory function.

61. The Adjudicating Authority while dismissing the appeal noted as

follows:

XXX

6. The Applicant filed its claim for Rs. 6,07,74,76,966/-. and the respondent, verified and admitted the claim to the tune of Rs.

600,92,77,327/- and informed the Applicant. Accordingly, being aggrieved the Applicant has filed the instant application for admission of remaining portion of the claim, i.e., Rs. 6,81,99,639/- and for non-compliance of the Order dated 18.10.2023.

Company Appeal (AT) (Insolvency) No. 691 of 2024 28 of 30

7. Pursuant to the Order passed in IA No. 2972 of 2023 dated 18.10.2023, the Resolution Professional has re-considered the claim of the Applicant as directed by this Adjudicating Authority arrived at the amount of Rs. 6,00,92,77,327/- based on the documents made available by the Applicant.

8. We do not consider that there is any non-compliance of the Order dated 18.10.2023 passed in IA No. 2972/2023. The Application (IA- 6075/2023) is disposed of accordingly.

XXX

62. We also note that the resolution applicant in its resolution plan for the

Corporate Debtor has provided as under:

"Similarly, if admitted claim amount of Noida is revised upward by resolution professional after submission of this plan, Noida shall be paid proposed amount of rupees 20 crores as proposed in this plan and there shall be no additional burden on resolution applicant"

63. Moreover, we note from the material placed on record that Noida was

aware about the submissions made by the resolution applicant in the

resolution plan regarding the claims of Noida and this was noted by Noida in

its rejoinder filed in IA 4907/2023 wherein it has averted as under:

"It may be noted that total value of the resolution plan is only Rs 363.24 crores, out of which the applicant (NOIDA) is being paid only rupees 20 crores, out of the total verified amount of rupees 513,97,26,613 as full and final settlement and will not revise even if this honorable tribunal considers and directs the resolution professional to verify total claimed amount of rupees 607,74,76,966"

Company Appeal (AT) (Insolvency) No. 691 of 2024 29 of 30

64. In the above facts and circumstances and after going through the

material placed on record, we do not find any infirmity in the actions of the

Resolution Professional, who was well within its rights to seek additional

information and Appellant provided limited information, which did not help

the Resolution Professional to accept their claims to the fullest extent as

claimed by the Appellant.

Order

65. Basis the facts placed before it, the Adjudicating Authority has rightly

dismissed the Appeal. We also do not find infirmity in the orders of the

Adjudicating Authority. Accordingly, the Appeal is dismissed and all related

IAs are also disposed of. No orders as to costs.

[Justice N Seshasayee] Member (Judicial)

[Arun Baroka] Member (Technical) New Delhi.

June 30, 2026.

pawan

Company Appeal (AT) (Insolvency) No. 691 of 2024 30 of 30