Paritosh Jain vs Manoj Kulshrestha Interim Resolution ...

NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI Company Appeal (AT) (Insolvency) No.2288 of 2024 (Arising out of Order dated 20.09.2024 passed by the Adjudicating Authority (National Company Law Tribunal), Court VI, New Delhi in IA No.4572 of 2023 in Company Petition No. (IB) - 710/(PB)/2019)

IN THE MATTER OF: Avni Jain ...Appellant Versus Manoj Kulshrestha, IRP for Rajesh Projects (India) Pvt. Ltd. ...Respondent

Present: For Appellant : Mr. Abhishek Anand, Ms. Palak Kalra and Mr. Karan Kohli, Advocates. For Respondent : Mr. Ritin Rai, Sr. Advocate with Mr. Abhindra Maheshwari, Advocates.

With Company Appeal (AT) (Insolvency) No.2289 of 2024 (Arising out of Order dated 20.09.2024 passed by the Adjudicating Authority (National Company Law Tribunal), Court VI, New Delhi in IA No.4574 of 2023 in Company Petition No. (IB) - 710/(PB)/2019)

IN THE MATTER OF: Paritosh Jain ...Appellant Versus Manoj Kulshrestha, IRP for Rajesh Projects (India) Pvt. Ltd. ...Respondent

Present: For Appellant : Mr. Krishnendu Datta, Sr. Advocate with Mr. Abhishek Anand, Ms. Palak Kalra, Mr. Karan Kohli and Ms. Niharika, Advocates. For Respondent : Mr. Ritin Rai, Sr. Advocate with Mr. Abhindra Maheshwari, Advocates.

With Company Appeal (AT) (Insolvency) No.2290 of 2024 (Arising out of Order dated 20.09.2024 passed by the Adjudicating Authority (National Company Law Tribunal), Court VI, New Delhi in IA No.4659 of 2023 in Company Petition No. (IB) - 710/(PB)/2019)

Company Appeal (AT) (Ins.) Nos. 2288, 2289, 2290, 2293, 2294, 2295, 2296 & 2297 of 2024 1 IN THE MATTER OF: Sangeeta Jain ...Appellant Versus Manoj Kulshrestha, IRP for Rajesh Projects (India) Pvt. Ltd. ...Respondent

Present: For Appellant : Mr. Abhishek Anand, Ms. Palak Kalra and Mr. Karan Kohli, Advocates. For Respondent : Mr. Ritin Rai, Sr. Advocate with Mr. Abhindra Maheshwari, Advocates.

With Company Appeal (AT) (Insolvency) No.2293 of 2024 & I.A. No.8596 of 2024 (Arising out of Order dated 20.09.2024 passed by the Adjudicating Authority (National Company Law Tribunal), Court VI, New Delhi in IA No.4518 of 2023 in Company Petition No. (IB) - 710/(PB)/2019)

IN THE MATTER OF: Akshat Jain ...Appellant Versus Manoj Kulshrestha, IRP for Rajesh Projects (India) Pvt. Ltd. ...Respondent

Present: For Appellant : Mr. Abhishek Anand, Ms. Palak Kalra and Mr. Karan Kohli, Advocates. For Respondent : Mr. Ritin Rai, Sr. Advocate with Mr. Abhindra Maheshwari, Advocates.

With Company Appeal (AT) (Insolvency) No.2294 of 2024 (Arising out of Order dated 20.09.2024 passed by the Adjudicating Authority (National Company Law Tribunal), Court VI, New Delhi in IA No.4573 of 2023 in Company Petition No. (IB) - 710/(PB)/2019)

IN THE MATTER OF: Divyansh Jain ...Appellant Versus Manoj Kulshrestha, IRP for Rajesh Projects (India) Pvt. Ltd. ...Respondent

Company Appeal (AT) (Ins.) Nos. 2288, 2289, 2290, 2293, 2294, 2295, 2296 & 2297 of 2024 2 Present: For Appellant : Mr. Abhishek Anand, Ms. Palak Kalra and Mr. Karan Kohli, Advocates. For Respondent : Mr. Ritin Rai, Sr. Advocate with Mr. Abhindra Maheshwari, Advocates.

With Company Appeal (AT) (Insolvency) No.2295 of 2024 (Arising out of Order dated 20.09.2024 passed by the Adjudicating Authority (National Company Law Tribunal), Court VI, New Delhi in IA No.4629 of 2023 in Company Petition No. (IB) - 710/(PB)/2019)

IN THE MATTER OF: Sarita Jain ...Appellant

Versus

Manoj Kulshrestha, IRP for Rajesh Projects (India) Pvt. Ltd. ...Respondent

Present: For Appellant : Mr. Abhishek Anand, Ms. Palak Kalra and Mr. Karan Kohli, Advocates. For Respondent : Mr. Ritin Rai, Sr. Advocate with Mr. Abhindra Maheshwari, Advocates.

With Company Appeal (AT) (Insolvency) No.2296 of 2024 (Arising out of Order dated 20.09.2024 passed by the Adjudicating Authority (National Company Law Tribunal), Court VI, New Delhi in IA No.4575 of 2023 in Company Petition No. (IB) - 710/(PB)/2019)

IN THE MATTER OF: Meenu Jain ...Appellant Versus Manoj Kulshrestha, IRP for Rajesh Projects (India) Pvt. Ltd. ...Respondent

Present: For Appellant : Mr. Abhishek Anand, Ms. Palak Kalra and Mr. Karan Kohli, Advocates. For Respondent : Mr. Ritin Rai, Sr. Advocate with Mr. Abhindra Maheshwari, Advocates.

Company Appeal (AT) (Ins.) Nos. 2288, 2289, 2290, 2293, 2294, 2295, 2296 & 2297 of 2024 3 With Company Appeal (AT) (Insolvency) No.2297 of 2024 (Arising out of Order dated 20.09.2024 passed by the Adjudicating Authority (National Company Law Tribunal), Court VI, New Delhi in IA No.4576 of 2023 in Company Petition No. (IB) - 710/(PB)/2019)

IN THE MATTER OF: Niharika Jain ...Appellant Versus Manoj Kulshrestha, IRP for Rajesh Projects (India) Pvt. Ltd. ...Respondent

Present: For Appellant : Mr. Abhishek Anand, Ms. Palak Kalra and Mr. Karan Kohli, Advocates. For Respondent : Mr. Ritin Rai, Sr. Advocate with Mr. Abhindra Maheshwari, Advocates.

JUDGMENT

ASHOK BHUSHAN, J.

All these Appeal(s) have been filed against the common judgment

dated 20.09.2024 passed by National Company Law Tribunal, Court VI,

New Delhi in different IAs filed by the Appellant(s) in Company Petition

No. (IB) - 710/(PB)/2019. By the impugned order, different Applications

filed by all 8 different Appellant(s), including IA No.4572 of 2023 filed by

the Appellant Avni Jain has been rejected. Aggrieved by the common

order dated 20.09.2024, these Appeal(s) have been filed.

2. Brief facts necessary to be noticed for deciding the Appeal are:

i. On an Application filed by Homebuyers, Corporate Insolvency

Resolution Process ("CIRP") commenced against the

Corporate Debtor ("CD") - Rajesh Projects (India) Pvt. Ltd.

Company Appeal (AT) (Ins.) Nos. 2288, 2289, 2290, 2293, 2294, 2295, 2296 & 2297 of 2024 4 vide order dated 19.09.2019 passed by the Adjudicating

Authority. The Adjudicating Authority by the same order

appointed Interim Resolution Professional ("IRP").

ii. Order of CIRP was challenged before this Tribunal in

Company Appeal (AT) (Ins.) No.1056 of 2019, where this

Tribunal vide order dated 05.02.2020 initiated reverse CIRP,

wherein the Project of the CD is to be constructed under the

supervision of Resolution Professional ("RP") and the funding

was to be arranged by the Promoters and the Lenders. The

earlier IRP resigned, consequently Mr. Manoj Kulshrestha

(Respondent herein) was appointed as an IRP vide order

dated 01.06.2021.

iii. The Appellant(s) before us claimed allotment of different units

in the Project - "RG Luxury Homes" by Allotment-cum

Builder Buyer Agreement ("Buyer Agreement") dated

19.09.2019.

iv. The IRP on perusal of records of the CD came to the

conclusion that Units, which were allotted by Builder Buyer

Agreements dated 19.09.2019 in favour of the Appellant(s) for

example Unit No.E-2401 to Avni Jain - Appellant was

unauthorised and the allotment was not made with the

consent of IRP. The IRP being already in place, units could

not have been allotted by the Promoters. The IRP

communicated cancellation letter, which was received by the

Company Appeal (AT) (Ins.) Nos. 2288, 2289, 2290, 2293, 2294, 2295, 2296 & 2297 of 2024 5 Appellant on 10.09.2022, informing the cancellation of

allotment to the Appellant for example cancellation of

E-2401, RG Luxury Homes, allotted to the Appellant - Avni

Jain. Avni Jain replied to the said letter vide letter dated

14.10.2022, questioning the action of IRP cancelling the unit.

The Appellant sent Builder Buyer Agreement dated

19.09.2019, Allotment Letter dated 19.09.2019 and Bank

Statement duly reflecting payment made to the CD and

requested the IRP to reconsider his decision of cancellation of

the unit. The IRP having cancelled the unit, allotted Unit

No.E-2401 to some other Homebuyer vide Buyer Builder

Buyer Agreement dated 16.01.2023.

v. The Appellant also filed a complaint dated 07.03.2023 against

the IRP before the Insolvency and Bankruptcy Board of India

("IBBI") vide letter dated 11.04.2023. The IBBI vide order

dated 11.04.2023, did not find any contravention and closed

the complaint.

vi. All Appellant(s) filed IAs in August 2023 before the

Adjudicating Authority, challenging the decision of IRP

cancelling the Units. The Appellant - Avni Jain filed IA

No.4572 of 2023 seeking direction to withdraw the

cancellation of allotment of Unit bearing No.E-2401 - RG

Luxury Homes and further direction was sought to maintain

status quo in respect of Unit bearing No.E-2401. Other

Company Appeal (AT) (Ins.) Nos. 2288, 2289, 2290, 2293, 2294, 2295, 2296 & 2297 of 2024 6 Appellant(s) also filed similar Applications being IA Nos.4573,

4574, 4575, 4576, 4629, 4659 and 4518 of 2023.

vii. Before the Adjudicating Authority the RP filed its reply to the

IAs. In his reply, the RP pleaded that on 19.09.2019 when

units were allotted by CD, an IRP was appointed and

allotment was unauthorised and void. It was further pleaded

that payment of Rs.50,000/- booking amount was received

only on 18.12.2019, i.e. after four months from the alleged

date of application and about three months from the

initiation of CIRP. The RP pleaded that RP is duty bound to

protect the interest of the CD and allotment claimed by the

Appellant being void ab-initio, no relief can be granted to the

Appellant.

viii. The Adjudicating Authority heard the parties and Application

filed by the Avni Jain, being IA No.4572 of 2023 was treated

to be leading Application, facts of which were noticed for

deciding all the Applications filed by the Appellant(s). The

Adjudicating Authority after hearing the parties, took the

view that in view of moratorium imposed under Section 14,

sub-section (1) of the Insolvency and Bankruptcy Code, 2016

(hereinafter referred to as the "IBC") and CIRP was initiated

on 19.09.2019, no assets of the CD could be transferred

subsequent to the moratorium. It was held that amount of

Rs.50,000/- was paid with respect to Unit No.E-2401, RG

Company Appeal (AT) (Ins.) Nos. 2288, 2289, 2290, 2293, 2294, 2295, 2296 & 2297 of 2024 7 Luxury Homes on 18.12.2019. It was also found that the

amounts were required to be made in the U.P. RERA Bank

account in the Karnataka Bank Ltd. with regard to different

Towers in Rajesh Projects India Pvt. Ltd., in which account,

no payment was made and payment of Rs.50,000/- was

made by the Appellant on 18.12.2019, in different Bank

could not have been accepted. It was further noticed that all

the Appellant(s) were related to one - Adesh Jain, who has

served as the CD's tax Consultant for over 15 years. The

Adjudicating Authority after returning the aforesaid findings,

rejected all the Applications, including IA No.4572 of 2023.

ix. Aggrieved by the common order dated 20.09.2024 passed by

the Adjudicating Authority, all the Applicants, filed these

Appeal(s).

3. The Appellant(s) sought liberty of this Tribunal to file additional

documents. An IA No.223 of 2025 was filed by the Appellant, praying for

taking on record the documents from Annexure A-1, A-2 & A-3. The

learned Counsel for the Respondent sought liberty to file an affidavit on

13.01.2025 and an affidavit has been filed by the IRP dated 08.02.2025.

Replies to which has also been filed by the Appellant(s). We allow IA

No.223 of 2025 and other similar IAs filed in other Appeal(s) and takes the

additional documents filed along with the Application Annexure A-1, A-2

and A-3 on record.

Company Appeal (AT) (Ins.) Nos. 2288, 2289, 2290, 2293, 2294, 2295, 2296 & 2297 of 2024 8

4. We have heard Shri Krishnendu Datta, learned Senior Counsel and

Shri Abhishek Anand, learned Counsel appearing for the Appellant(s) and

Shri Ritin Rai, learned Senior Counsel appearing for the IRP.

5. Shri Krishnendu Datta, learned Senior appearing for the Appellant in

support of the Appeal submits that allotment of the units to all the

Appellant(s), were made on 19.09.2019. With regard to Avni Jain, as per

the documents on the record including Builder Buyer Agreement, the unit

was allotted for total consideration of Rs.46,80,000/- @ of Rs.3124.17/-

per sq. ft. was in accordance with the market conditions at the time of

allotment. The cancellation itself acknowledges that allotment was in

favour of the Appellant. The IRP had no authority to cancel the allotment.

The IRP did not issue any show-cause notice before the cancellation. The

cancellation of the allotment is contrary to the provisions of the IBC.

Learned Counsel for the Appellant submits that cheque dated 01.09.2019

of Rs.50,000/- was handed over to the CD and subsequently on asking of

the IRP a fresh cheque dated 16.12.2019 was handed over to the IRP,

which was encashed only on 18.12.2019 by the IRP and payment of

allotment money was also made, which cheque has been brought on

record along with IA filed for additional documents. It is submitted that

role of IRP/ RP is not an adjudicatory role and IRP could not have

cancelled the allotments. It is submitted that the CD is under reverse

CIRP, which is under the Promoters, who are funding the Project under

the supervision of IRP. Payment and issuance of receipt establishes

bonafide allotment. The IRP had observed in letter received on

Company Appeal (AT) (Ins.) Nos. 2288, 2289, 2290, 2293, 2294, 2295, 2296 & 2297 of 2024 9 10.09.2019 that the unit allotted to the Appellant is undervalued. It is

submitted that IRP was required to file an Application under Section 45 of

the IBC for declaration of unit as undervalued and it was the jurisdiction

of the Adjudicating Authority only to declare the unit undervalued. The

IRP could not have cancelled the units on the said ground. The facts of

each Appellant(s) are different.

6. Learned Senior Counsel appearing for the IRP refuting the

submissions of learned Counsel for the Appellant(s) submits that CIRP

having commenced on 19.09.2019, there was no occasion of allotment of

any Units to the Appellant(s) on 19.09.2019 by the Ex-Management. It is

submitted that all Appellant(s) are related to Adesh Jain, who was the Ex-

Consultant of the CD. It is submitted that no allotment could have been

made without receiving any payment. The allotment is contrary to the

terms of the Agreement. The payments by the Appellant(s) have been

made between 07.12.2019 to 15.01.2020, for example Avni Jain has made

payment on 18.12.2019. All payments having been made subsequent to

the commencement of CIRP, the said payments could not be treated to be

payments for allotment, which as claimed to be issued on 19.09.2019 by

the Ex-Management. The allotments were void. Further, the allotment

money was required to be deposited in UP RERA account of Karnataka

Bank, which was clearly mentioned in the Agreement. The payments

claimed by the Appellant(s) are payments not made in the designated

account, rather payments were made in a different account in different

Bank and also several months after the commencement of CIRP. The

Company Appeal (AT) (Ins.) Nos. 2288, 2289, 2290, 2293, 2294, 2295, 2296 & 2297 of 2024 10 allotment of Units in favour of the Appellant(s) were void, since no

payments were made even on the date when allotment is claimed, i.e. on

19.09.2019, which is the date when CIRP commenced. After

commencement of the CIRP the Promoters have no authority or

jurisdiction to make any allotment in favour of the Appellant(s). Initially,

the amount was not paid at the time of booking of the Unit and was also

not paid at the time of issuing allotment letter and Builder Buyer

Agreement. The payments made by all Appellant(s) from 07.12.2019 to

15.01.2020, clearly indicate that allotment was sought to be validated by

making payments subsequently, which is impermissible and contrary to

the terms and conditions of allotment. The IRP did not have any

adjudicatory function and functioned only in administrative capacity. It

is submitted that present was not a case of IRP taking any steps for

declaring any undervalued transaction, hence, Section 45 is not attracted

in the facts of the present case. The IRP neither took any any action, nor

formed any opinion for filing any Application under Section 45. The

submission of the Appellant(s) that they have submitted a cheque on

01.09.2019 to the CD is not borne on the materials on record. The cheque

number, which is mentioned in the receipt, which has been filed by the

Appellant along with the Application for additional documents, gives a

different cheque number and date of payment as has been mentioned by

the Appellant in paragraph 12 of its written submission. Learned Counsel

for the IRP submits that IRP being duty bound to protect the assets of the

CD, after looking into the records, was of the view that allotments claimed

Company Appeal (AT) (Ins.) Nos. 2288, 2289, 2290, 2293, 2294, 2295, 2296 & 2297 of 2024 11 by the Appellant(s) are undervalued and void, the Appellant(s) were

communicated about the cancellation of the units, which units have

already been allotted to other Homebuyers in the CIRP.

7. We have considered the submissions of learned Counsel for the

parties and have perused the records.

8. For deciding all the Appeal(s), we need to refer to the facts on record

in Company Appeal (AT) (Ins.) No.2288 of 2024 - Avni Jain vs. Manoj

Kulshrestha, IRP for Rajesh Projects (India) Pvt. Ltd.

9. The Appellant - Avni Jain has come up with a case that Allotment-

cum-Builder Buyer Agreement was issued to her on 19.09.2019. In the

Appeal copy of the allotment letter for the Unit E-2401 in Rajesh Projects

(India) Pvt. Ltd. has been brought on record as Annexure A-2, which

bears the date 19.09.2019. The said allotment letter refers the

application of the Appellant dated 20.08.2019, which application has also

been part of Annexure A-2. The allotment letter mentions the area of

unit, total amount of consideration as Rs.46.80 lakhs. Clause-12 of the

application, which is claimed to be submitted by the Appellant contain

following stipulation:

12. The Applicant acknowledges that the Allotment Letter will be issued/ dispatched to the applicant by the promoter for execution after the receipt of 10% of the net sale price of the said Apartment and the applicant shall sign the same as acceptance and sent back to the promoter. The applicant further understands that the allotment shall become final and binding upon the company only after the Applicant signs and confirm the terms and conditions of

Company Appeal (AT) (Ins.) Nos. 2288, 2289, 2290, 2293, 2294, 2295, 2296 & 2297 of 2024 12 the Allotment Letter. If, however, The Applicant falls to sign/execute and return the Allotment Letter within thirty (30) days from its dispatch by the company then the company may at its discretion treat the application as cancelled and the earnest money paid by the Applicant shall be refunded within 90 days from the date of such cancellation without any interest/compensation and deduction. In case payment is not made within 90 days simple interest @ of SBI MCLR + 1% per annum will be paid for the period commencing from the date of expiry of such 90 days till the date of payment.

10. The application further mentions that allotment letter shall be

issued after payment of 10% of the net sale price. The Appellant's case is

that they have issued a Cheque No.784710 dated 01.09.2019 to the CD of

Rs.50,000/- of the Corporation Bank, which is filed as Annexure A-1.

With Annexure A-1, there is also a receipt given by the CD dated

16.12.2019. The receipt A-1 mentions as follows:

"Received with thanks from AVNI JAIN, Resident(s) of 61, Vaishali, Pitampura, North West Delhi, Delhi-110038 North West Delhi Delhi

- 110034, Delhi, India, the sum of Rs.50,000 (Rupees Fifty Thousand Only) vide Cheque No.784711 dated 16-Dec-2019 drawn on Corporation Bank, payable at Delhi."

11. Further, Annexure A-1 mentions about an Account Ledger Entry of

18.12.2019, which mentions Cheque No.784711. Thus the cheque on the

basis of which the amount was credited in the CD dated 18.12.2019, was

the Cheque No.784711 dated 16.12.2019. The above document itself

indicate that cheque on the basis of which payment was made by the

Appellant, was cheque dated 16.12.2019, which was encashed on

18.12.2019. The Appellant has filed a receipt for submitting cheque

Company Appeal (AT) (Ins.) Nos. 2288, 2289, 2290, 2293, 2294, 2295, 2296 & 2297 of 2024 13 dated 16.12.2019, however, there is no receipt by the CD for the alleged

cheque dated 01.09.2019 filed as Annexure A-1 at page 8 of the IA.

12. We also need to notice the reply, which was filed by the RP to the

Application filed by the Appellant before the Adjudicating Authority. Copy

of the reply filed by the RP has been brought on record as Annexure A-17,

to Company Appeal (AT) (Ins.) No.2288 of 2024. The RP in reply to the

Application in paragraphs 11, 12 and 14 pleaded following:

"11. It is respectfully submitted that as per the application for allotment, which was executed on 19.09.2019, it was explicitly stated that at the time of booking of the unit, the applicant was required to make a payment of Rs 50,000/- as a booking money. As per the terms of the application the payment plan is stated to be as under:

Date Particular Amount

29.08.2019 At the time of booking 50,000.00

On offer of possession 46,30,000.00

12. It is also noted from the records that as per clause 2.1 at page 26 of the application for allotment of unit in the project, the payment towards the booking of the unit was to be made in the bank account of the company in the following manner:

Through A/c Payee cheque / demand draft / bankers cheque / online payment in favour of:

For Apartment of Rajesh Projects 54920001000859 Karnataka Tower B C D & E India Pvt. Ltd. 01 Bank Ltd. Tower B C D & E Rera Account

For Apartment of Rajesh Projects 54920001000860 Karnataka Tower A F & M India Pvt. Ltd.

Company Appeal (AT) (Ins.) Nos. 2288, 2289, 2290, 2293, 2294, 2295, 2296 & 2297 of 2024 14 Tower A F & M 01 Bank Ltd.

Rera Account

For Apartment of Rajesh Projects 54920001000861 Karnataka Tower G & H India Pvt. Ltd. 01 Bank Ltd. Tower G & H Rera Account

14. However, it is pertinent to mention that the applicant made a payment of Rs. 50,000/- only on 18.12.2O 19 i.e. after about four months from the alleged date of application and after about three months from the initiation of CIRP of the Company that too in some other account and not the aforesaid designated bank account.

Consequently, it is evident that the booking amount was never tendered in accordance with the stipulated terms outlined in the alleged application for allotment. The noncompliance clearly demonstrates that the booking was never confirmed on 19.09.2019.

13. The RP has also pleaded that usual practice of a Company is to

issue allotment letter only when advance booking amount was paid by the

allottee. Whereas in the present case, allotment letter was issued

without receiving booking amount, which amount could be received only

on 18.12.2019. It was further pleaded that IRP never initiated any

proceedings under Section 45 of the IBC. The RP has further pleaded

that entire transaction between the CD and the Applicant was never been

consummated in the relevant period as stipulated in Section 56 of the

Code. In paragraph 18 of the reply, following has been pleaded:

"18. The applicant is frivolously attempting to shape the narrative by contesting that the Respondent has allegedly non-compliance with the provisions of Section 45 of the code. However, it is pertinent to mention that the Respondent never initiated an investigation or subsequent cancellation of the applicant's unit in accordance with

Company Appeal (AT) (Ins.) Nos. 2288, 2289, 2290, 2293, 2294, 2295, 2296 & 2297 of 2024 15 Section 45, since the entire transaction between the Corporate Debtor and the applicant was never been consummated in the relevant period as stipulated in Section 46 of the Code. The Respondent herein reiterates the fact that the cancellation of the applicant unit was done solely on the grounds that the agreement between the Corporate Debtor and applicant, was never enforced until the booking amount was paid by the applicant i.e., on 18.12.2019, which was after the initiation of CIRP proceeding against the Corporate Debtor."

14. The present is a case where IRP who was running the CD as a going

concern under orders of this Tribunal, while going through the records of

the CD, came to know about the units allotted to the Appellant(s). The RP

found that allotments were claimed on 19.09.2019, on which date CIRP

had already commenced and there was no authority in the CD, to make

any allotment on 19.09.2019. When the CIRP has commenced on

19.09.2019, the jurisdiction of the Suspended Director clearly came to an

end and no allotment letter could have been issued on 19.09.2019. The

allotment, which is claimed on 19.09.2019 appeared to be unusual, since

it was made without receiving any payment in the account of the CD and

the payments were received in the account of the CD on 07.12.2019 to

15.01.2020 with regard to the Appellant(s) herein. In paragraph 13 of the

reply, the RP has pleaded the following:

"13. It is respectfully submitted that the alleged allotment letter in question was issued on the date when the CIRP was initiated against the Corporate Debtor, which makes the document void ab initio as the concerned person on behalf of the Corporate Debtor hold no authority to sign and execute any agreement."

Company Appeal (AT) (Ins.) Nos. 2288, 2289, 2290, 2293, 2294, 2295, 2296 & 2297 of 2024 16

15. The submission of the Appellant is that RP had no adjudicatory

role, hence, he could not have issued a letter cancelling the allotment. The

present is a case where RP has not exercised any adjudicatory function,

rather from perusal of the record, came to know that no allotment has

been made in favour of the Appellant and on 19.09.2019, when CIRP

commenced, no allotment could have been made without consent of the

IRP and the Suspended Director has no jurisdiction to issue any

allotment letters in favour of the Appellant. It is due to the above

reasons, the IRP sent a communication to the Appellant that their

allotment cannot be accepted and allotment was cancelled. The IRP in

the reply has also pleaded that after cancellation of allotment of the

Appellants', units have been allotted on 16.01.2023 to other Homebuyers

by Builder Buyer Agreement. The IRP is duty bound to protect the assets

of the CD and if it is found that allotment claimed by the Appellant(s) is

void, the allotment was impermissible in view of the moratorium imposed

on 19.09.2019 and it required no adjudication for treating the allotment

as void and impermissible.

16. The submission of the Appellant that when IRP was of the view that

allotment is undervalued, he ought to have initiated proceedings under

Section 45. It is true that in the letter which was communicated by the

IRP on 10.09.2022, one of the reason mentioned was that allotment made

to the Appellant was undervalued. The letter sent by the IRP, which was

received by the Appellant on 10.09.2022, following was stated by the IRP:

Company Appeal (AT) (Ins.) Nos. 2288, 2289, 2290, 2293, 2294, 2295, 2296 & 2297 of 2024 17 "To,

Avni Jain 61, Vaishali, Pitampura, North West Delhi Delhi-110034 INDIA Dear Sir, As you are aware that M/s Rajesh Projects India Pvt. Ltd. is undergoing insolvency proceedings and Corporate Insolvency Resolution Process (CIRP) was admitted on September 19, 2019 whereby Mr. Gaurav Katiyar was appointed as Interim Resolution Professional (IRP). Thereafter, NCLAT passed an order of of Reverse-CIRP with certain conditions to complete the project under the supervision of IRP. Subsequently, vide order dated June 6, 2021 passed by the Hon'ble NCLT, Mr. Gaurav Katiyar was discharged and I was appointed as the IRP for the said Company.

While perusing the records of the Company, I found your details from the records maintained by the company and have noticed the following concerns with regard to the allotment of unit no. E-2401 in your name in the project, RG Luxury Homes, situated at Plot No.GH-07 A, Sector 16 B, Greater Noida (U.P.):

1. You were allotted the said unit at the time when the company was undergoing CIRP and moratorium under Section 14 of Insolvency and Bankruptcy Code, 2016 (IBC) was imposed without any approval from the IRP.

2. The price at which the said unit has been allotted to your is undervalued.

3. Advance paid by you towards the allotment is only a small sum as a token amount and at this stage the payment made by you is not in accordance with the existing policies for fresh booking/ allotments.

It is in view of the aforesaid facts and circumstances, the allotment stated to have been made in your name is not in accordance with law and as such cannot be treated as valid allotment. Therefore,

Company Appeal (AT) (Ins.) Nos. 2288, 2289, 2290, 2293, 2294, 2295, 2296 & 2297 of 2024 18 the allotment of unit no.E2401 made in your name stands cancelled.

Please provide your email id, contract number and bank details so the amount paid by you may be returned accordingly.

Sd/ Manoj Kulshrestha Interim Resolution Professional Rajesh Projects India Private Limited."

17. Thus, the IRP has communicated to the Appellant that allotment

made in favour of the Appellant, cannot be treated as a valid allotment.

The IRP in its reply to the Application, has clearly pleaded that no

proceedings has been initiated by the IRP under Section 45. It was not

the case for adjudication undervalued transaction, hence, no exercise was

taken. When we look into Section 45 of the IBC, it provides as follows:

"45. Avoidance of undervalued transactions. -

(1) If the liquidator or the resolution professional, as the case may be, on an examination of the transactions of the corporate debtor referred to in sub-section (2) determines that certain transactions were made during the relevant period under section 46, which were undervalued, he shall make an application to the Adjudicating Authority to declare such transactions as void and reverse the effect of such transaction in accordance with this Chapter.

(2) A transaction shall be considered undervalued where the corporate debtor-

(a) makes a gift to a person; or

(b) enters into a transaction with a person which involves the transfer of one or more assets by the corporate debtor for a consideration the value of which is significantly less than

Company Appeal (AT) (Ins.) Nos. 2288, 2289, 2290, 2293, 2294, 2295, 2296 & 2297 of 2024 19 the value of the consideration provided by the corporate debtor,

and such transaction has not taken place in the ordinary course of business of the corporate debtor.

18. As per Section 45, if the IRP forms an opinion for a transaction to

be undervalued, which took place within the look-back period, which is

one year with any person and with related party is two years prior to the

date of commencement of the CIRP, the present is a case where allotment

is being claimed on 19.09.2019, which is a date of commencement of

CIRP. Hence, there can be no question of applicability of Section 45,

since look-back period is a period, which is one year/ two years prior to

commencement of the CIRP. Hence, the submission of learned Counsel

for the Appellant that proceedings were required to be initiated for

declaring the transaction undervalued, is without any substance and IRP

has correctly taken the decision that he has neither initiated any

proceedings, nor it was a case of Section 45. From the facts, which have

been brought on record, makes it clear that on the date when allotment is

claimed to be made in favour of the Appellant on 19.09.2019, the CIRP

has commenced by the order of the same date. When CIRP has

commenced on 19.09.2019, no allotment could have been made by

Suspended Management in favour of the Appellant(s). More so, present is

a case where payment of Rs.50,000/-towards allotment was paid by the

Appellant(s) in December 2019 and January 2020, which is several

months after the alleged allotment in their favour, without paying of any

amount to the CD at the time of allotment. Without the payment, no

Company Appeal (AT) (Ins.) Nos. 2288, 2289, 2290, 2293, 2294, 2295, 2296 & 2297 of 2024 20 allotment could have been made in favour of the Appellant(s). The facts,

which have been brought on the record, makes it clear that Suspended

Management has tried to unduly benefit the Appellant(s) by giving papers

of allotment. The IRP has also in his reply stated that payments were to

be made in the UP RERA account of Karnataka Bank, whereas payments

claimed by the Appellant(s) were made in another account of different

Bank. The facts, which have been brought on record, clearly indicate that

present is a case where the allotment claimed by the Appellant(s) was

non-est and void. The IRP did not commit any error in communicating

the Appellant(s) that their allotment is non-est and invalid. The

Adjudicating Authority in the impugned order has also noticed the fact

that the requisite amounts were to be deposited in the UP RERA Bank

account, whereas the amounts, which the Appellant(s) claimed, were not

deposited in the UP RERA account. Hence, the amount, which was

claimed to be paid by the Appellant in December 2019 and January 2020

was also not paid in the designated account, which has been noticed in

paragraphs 14 and 15 of the impugned order, which are as follows:

"14. Additionally, it is pertinent to mention that in order to give effect to the aforesaid allotment letter, the applicant was obligated to submit the requisite amount in the following manner and in the following designated U.P. RERA bank account/s, in accordance with the clause 2.1 of the allotment application, i.e,-

Through A/c Payee cheque / demand draft / bankers cheque / online payment in favour of:

For Apartment of Rajesh Projects 54920001000859 Karnataka Tower B C D & E India Pvt. Ltd.

Company Appeal (AT) (Ins.) Nos. 2288, 2289, 2290, 2293, 2294, 2295, 2296 & 2297 of 2024 21 Tower B C D & E 01 Bank Ltd.

Rera Account

For Apartment of Rajesh Projects 54920001000860 Karnataka Tower A F & M India Pvt. Ltd. 01 Bank Ltd. Tower A F & M Rera Account

For Apartment of Rajesh Projects 54920001000861 Karnataka Tower G & H India Pvt. Ltd. 01 Bank Ltd. Tower G & H Rera Account

15. However, it has been averred by the RP in its reply that the applicant herein has not submitted requisite amount in the aforesaid U.P. RERA bank account but rather in another bank account.

Consequently, it can be further stated that the terms and conditions allotment agreement were not adhered to by the applicant in light of the fact that the requisite amount was never paid by the applicant in the correct account. Moreover, the applicant herein has failed to attach any proof of payment with regards to the aforesaid payment of INR 50,000."

19. The Adjudicating Authority has also returned a finding that when

the CIRP has commenced on 19.09.2019 allotment on same day was

invalid, in the light of the fact that moratorium was initiated in

accordance with Section 14 of the IBC. The Adjudicating Authority in

paragraph 13, returned following:

"13. Moreover, in light of the fact that the applicant herein has admitted that the letter of allotment itself was issued on the date when the CD was admitted into CIRP i.e., 19.09.2019. Consequently, the said letter of allotment was invalidated in light of the fact that moratorium was initiated in accordance with section 14 of IBC, 2016 and the IRP was given control of the CD"

Company Appeal (AT) (Ins.) Nos. 2288, 2289, 2290, 2293, 2294, 2295, 2296 & 2297 of 2024 22

20. The submission of the Appellant is that allotments and payments

made by the Appellant are reflected in records of the CD, hence, the

allotment was actually made and could not have been declared invalid by

the IRP. The materials on the record, including the letter of allotment

dated 19.09.2019 in favour of the Appellant without any payment to the

designated account, which payment according to the materials on record

is claimed to be made only in December 2019 and January 2020, clearly

prove that allotment made in favour of the Appellant(s) is non-est and

without any authority. The Adjudicating Authority has considered all

relevant facts and has rightly came to the conclusion that after

enforcement of moratorium no allotment could have been made to the CD

by Suspended Management in favour of the Appellant. Further, the

payments as claimed by the Appellant(s) were made in December 2019

and January 2020, which itself indicate that allotment was only paper

allotment, which was not in accordance with the conditions of allotment

as per application for allotment and the Adjudicating Authority has not

committed any error in rejecting the Applications filed by the Appellant(s).

21. Learned Counsel for the Appellant further submitted that there was

some distinguishing facts in each of the case and fact in Avni Jain was

not the facts of all cases. When we look into the facts, which have been

brought on record, it is clear that all Appellant(s) claimed same date of

allotment, i.e. 19.09.2019. It is only payments made by the Appellant(s),

which is on different dates between 07.12.2019 to 20.01.2020. The

payments being made several months after the alleged allotment on

Company Appeal (AT) (Ins.) Nos. 2288, 2289, 2290, 2293, 2294, 2295, 2296 & 2297 of 2024 23 19.09.2019, rest of the Appeal(s) are also on the same footing and the

payments made on different dates in the month of December 2019 and

January 2020, is inconsequential. Hence, the submission of the

Appellant that facts of each case are not similar, does not commend us.

22. In view of the foregoing discussions, we do not find any error in the

order of the Adjudicating Authority rejecting Applications filed by the

Appellant(s). There is no merit in the Appeal(s). The Appeal(s) are

dismissed. There shall be no order as to costs.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical)

[Arun Baroka] Member (Technical)

NEW DELHI

23rd April, 2025

Ashwani

Company Appeal (AT) (Ins.) Nos. 2288, 2289, 2290, 2293, 2294, 2295, 2296 & 2297 of 2024 24