Pranav Ansal vs Il&Fs Financial Services Limited

NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI Company Appeal (AT) (Insolvency) No. 500 of 2025 & I.A. No. 1911, 2261, 2264 of 2025 (Arising out of Order dated 25.02.2025 passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi, Court-IV in CP.: (IB) 558(ND)/2024)

IN THE MATTER OF: Gagan Tandon & Ors. ...Appellants

Versus

IL & FS Financial Services Ltd. & Ors. ...Respondents

Present:

For Appellant : Mr. M.P. Sahay, Adv. Yaman Verma, Ms. Chitra Chanda, and Mr. Kartik Virmani, Advocates. For Respondents : Mr. Gopal Jain, Sr. Advocate with Mr. Satendra Rai and Ms. Ruchika D. and Mr. Pareesh Virmani, Advocates for R1 IL & FS. Mr. Abhishek Anand, Mr. Karan Kohli, Advocates for RP. Mr. Arijit Prasad, Sr. Advocate with Mr. Ritesh Agrawal, Ms. Priyanshi Sharma, Ms. Shruti Vats and Mr. Argh B. Sharma, Advocates for Awas Vikas Parishad. Mr. Seshagiri Vadlamani Advocates for I.A. No. 2264/25. Mr. Vinayak Nath Singh, Advocates for UP Awas.

With Company Appeal (AT) (Insolvency) No. 502 of 2025 & I.A. No. 1922, 1923, 1924, 1925, 2249, 2250, 2251, 2252, 2254, 2255, 2256, 2555, 2993, 2994, 3001, 3556, 4193 of 2025 (Arising out of Order dated 25.02.2025 passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi, Court-IV in CP.: (IB) 558(ND)/2024)

IN THE MATTER OF: Pranav Ansal ...Appellant Versus IL & FS Financial Services Ltd. & Anr. ...Respondents

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 1 Present:

For Appellant : Ms. Neeha Nagpal, Mr. Malak Bhatt and Mr. Nikunj Mahajan, Advocates.

Mr. Sanjiv Kumar Dubey, Sr. Advocate with Mr. Abhishek Chawdhary, Mr. Shahrukh, Ms. Tanya Verma, Advocates for LDA & BKDA.

Mr. Abhishek Chaudhary, Advocate for GDA & ADA.

For Respondents : Mr. Gopal Jain, Sr. Advocate with Mr. Satendra Rai and Ms. Ruchika D. and Mr. Pareesh Virmani, Advocates for R1 IL & FS.

Mr. Abhishek Anand, Mr. Karan Kohli, Advocates for RP.

Mr. Ashim Vachher, Sr. Advocate with Ms. Saiba M. Rajpal and Mr. Vinayak Uniyal Advocates for I.A. 2251 & 3556 of 2025.

Mr. Arijit Prasad, Sr. Advocate with Mr. Ritesh Agrawal, Ms. Ankita Singh, Mr. Argh B. Sharma, Mr. Deepak Kumar and Ms. Priyanshi Sharma, Advocates for UP Awas

Mr. Karamveer and Mr. Kumar Abhishek, Advocates for I.A. 2252 of 2025 Homebuyers

Mr. Thakur Ankit Singh, Advocate for IA No. 2555 of 2025 & 2993 of 2025.

Mr. Thakur Ankit Singh, Advocate for I.A. 2993 of 2025.

Mr. Anshul Sharma, Advocates for Homebuyers in I.A. 3001 of 2025.

Mr. Sunil Fernandes, Sr. Advocate with Mr. Spandan Biswal, Mr. Kaustubh Rai and Mr. Shivendra Pandey, Advocates for I.A. No. 4193 of 2025. Mr. A. K. Tewari, Mr. Rahul Burmani and Adv. Yosha Dutt, Advocates for I.A. No. 5887 & 5888 of 2025.

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 2 JUDGMENT

ASHOK BHUSHAN, J.

These two Appeal(s) have been filed against the order dated

25.02.2025 passed by NCLT, New Delhi, Court-IV admitting Section 7

application filed by M/s IL&FS Financial Services Ltd. ("IL&FS"), the

Financial Creditor (Respondent No.1 herein). Company Appeal (AT) (Ins.)

No.502 of 2025 has been filed by Pranav Ansal, the Suspended Director of

the Corporate Debtor ("CD") - M/s Ansal Properties and Infrastructure

Limited ("Ansal Properties"). Company Appeal (AT) (Ins.) No.500 of 2025

has been filed by Gagan Tandon and Ors., Homebuyers of the "Sushant

Golf City", Lucknow Project, developed by Ansal Properties.

2. The facts of the present case and the relevant materials brought on

record by the parties as well as Intervenors, highlights various aspects of

insolvency resolution process, which relate to a real estate Company. The

detailed facts, which we shall notice hereinafter is reflection of varied

complexities and difficulties in respect to a real estate Company, which

has Projects, situated in different Cities, different States of the country.

3. We need to notice certain background facts with respect to the CD

and facts leading to filing of Section 7 application by the Financial

Creditors:

(i) The State of Uttar Pradesh by Government Order dated

22.11.2023 announced a policy to promote and facilitate

private sector participation in developing of Hi-tech

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 3 Townships with world-class infrastructure, keeping in view

the mandate of national estate housing policies. The policy

was subsequently revised by Government Order dated

16.08.2007. Under the policy, the Development Authorities

were to provide land to the developers under the Land

Acquisition Act, 1894. The Developer was also to obtain land

by direct purchase. The State was also entitled to provide

land after resuming the land from different Gram Sabhas

under the UP Zamindari Abolition and Land Reforms Act,

1950.

(ii) As per the above policy, a Memorandum of Understanding

("MoU") was entered between the State of UP through the

Lucknow Development Authority ("LDA") and M/s Ansal

Properties and Infrastructure Limited (the CD). The CD was

selected to develop Hi-Tech Township at Lucknow on land

measuring 1500 acres or more. The MoU provided that after

receiving the land acquisition proposal from the CD, the LDA

shall initiate land acquisition proceedings and submit the

acquisition proposal to the Collector of the District. Certain

exemptions were also granted to the CD, including waiver of

payment of 10% land acquisition charges, exemption from

stamp duty for initial purchase and transfer of land, which

shall be on the lease hold title for 90 years. The land which

vests with the Gram Sabha was also required to be resumed

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 4 by following the prescribed procedures. One of the Clauses

under the MoU was to ensure timely completion of Project as

per the provisions of the approved DPR, the LDA shall retain

transferable rights of 25% of total saleable land, which shall

be released in proportion to the second party on successful

completion of various services to the functional stage. If the

second party leaves any development work incomplete, the

same shall be completed by the LDA through sale of the land

so retained.

(iii) A Development Agreement dated 18.11.2006 was entered

between the CD and LDA, where the CD was to develop a Hi-

Tech Township in an area of 1765 acres. As per the Master

Plan of Lucknow Development, Agreement contained one

Clause-8 regarding Performance Guarantee, which reads as

follows:

"8. Performance To ensure timely completion of the Guarantee project as per the provisions of approved DPR, the First Party shall retain the transferable rights on 25 percent of total saleable land, which shall be released in proportion to the Second Party! on successful completion of various services to the functional stage. If the Second Party leaves any development work incomplete, the same shall be completed by. the First Party through sale of the land so

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 5 retained."

(iv) There has been amendment to MoU between LDA and CD.

On 10.05.2007 Development Agreement - 2 was executed.

Similarly, on 27.11.2008, Development Agreement-3 was

executed. Development Agreement-4 was executed on

20.08.2010. One more Development Agreement dated

26.04.2011 was executed between the CD and the LDA,

which dealt with fifth phase of the proposed Hi-Tech

Township of 958.85 acres. In the Development Agreement as

noted above, DPR with respect to proposed lands were

approved. The Development Agreement contained various

Clauses, including the Clause of Performance Guarantee.

Clause-9 of the Development Agreement dated 26.04.2011

provides as follows:

"9. Performance To ensure timely completion of the Guarantee project as per the provisions of the approved DPR and registration of transfer deeds of developed properties before handing over of properties to allottees, the Second Party shall mortgage 25 per cent of the total saleable land in favour of the First Party in accordance with.

the applicable rules/Acts. The mortgage deed shall be 'registered' and stamp duty as per Applicable Law shall be payable on Mortgage-

Deed.

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 6 Twenty per cent of the mortgaged land shall be released after the successful completion of various services to the functional 'stage, compliance of all -conditions as per the provisions of the approved DPR especially with regard to "the ground water recharging system ensuring 120 per cent water recharging against total amount of ground water drawn and registration of transfer deeds of developed properties in favour of allottees. It the Second Party leaves any development work Incomplete, the same shall be completed by the First Party through sale of the land so mortgaged. Remaining five per cent of the mortgaged land shall be kept retained performance guarantee to ensure the maintenance of services."

(v) The above Clause requires the CD to mortgage 25% of the

total saleable land in favour of LDA.

(vi) Lands were provided by the LDA through acquisition under

the Land Acquisition Act as well as by redemption of land

belonging to different Gram Sabha under the UP Zamindari

Abolition and Land Reforms Act, 1950. The detailed DPR for

Hi-Tech Technology in different phases approved and was

sanctioned including the necessary Plans. Several Projects

were launched by the CD in the State of UP and other States.

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 7 One of the Hi-Tech Township Project at Lucknow was

Sushant Golf City, Lucknow over an area of 4,465 acres.

Different Projects were registered under the UP RERA at

Lucknow, which Projects commenced and under the various

Projects at Lucknow, the CD allotted units, both residential

and commercial to large number of unit holders.

(vii) Similarly in the State of UP, under the Hi-Tech Township/

Integrated Township, Policy in other cities of State, MoU and

Development Agreements were executed between CD and

respective Development Authorities.

(viii) The CD approached the IL&FS Financial Services Ltd., the

Financial Creditor for sanction of Rupee Term Facility of

Rs.500 million. The CD was also proposed PMDO Facility

(Pooled Municipal Debt Obligation) of Rs.3210 million and

Rs.3930 million funding facilities towards development of

infrastructure at Lucknow Township. IL&FS Financial

Services sanctioned Term Loan Facility of Rs.500 million by a

letter dated 16.02.2016 and terms and conditions for Term

Loan Facility were part of the Sanctioned Letter. In pursuance

of Sanction Letter dated 16.02.2016, a Loan Agreement was

entered on 18.03.2016. Another Term Loan Facility of Rs.100

crores was sanctioned on 26.10.2016, in pursuance of which

a Loan Agreement was entered between the CD and IL&FS on

25.11.2016. The Loan Document-I and Loan Document-II

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 8 both contained details terms and conditions, including details

of security, purpose for which the loan was sanctioned and

identified hypothecated receivables. Between 23.03.2016 to

01.12.2017, IL&FS disbursed amounts under Loan

Agreement-I and Loan Agreement-II. On 28.06.2018, the

Loan Agreement was amended vide a Supplemental

Agreement dated June 28, 2018, whereby the repayment

schedule was revised. In pursuance of the amount received

under both the Facilities, the CD largely utilized such funds

in the Project of Phase-2 Township located at Lucknow.

(ix) There being default committed by the CD, IL&FS issued

notice to rectify the alleged breaches. IL&FS vide notice dated

26.03.2019 recalled the entire Facility and in July 2019 filed

an application under Section 7 of the Insolvency and

Bankruptcy Code, 2016 (hereinafter referred to as the "IBC").

Being CP(IB) No.1649/ND/2019 to initiate Corporate

Insolvency Resolution Process ("CIRP") of the CD.

(x) On a statement made by the parties, the Adjudicating

Authority vide order dated 27.04.2021 dismissed Section-7

application as withdrawn with liberty to the Financial

Creditors to file fresh application.

(xi) The CD gave an offer of settlement to pay an amount of

Rs.109,66,00,000/-. A Settlement Agreement dated

03.03.2022 was entered between the CD and IL&FS. The

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 9 NCLT Mumbai in CA No.130/MB/2022 in CP(IB)

No.3638/MB/2018 approved the Settlement Agreement

between the parties. Pursuance to the Settlement Agreement,

an amount of Rs.5 crores was paid by the CD to IL&FS on

20.10.2022. The CD proposed a Revised Settlement Plan on

31.10.2023 of Rs.104,66,00,000/- along with interest on

delayed payment. On 22.11.2023, IL&FS accepted the

proposal. In pursuance of settlement an amount of Rs.28.36

crores were paid by the CD as on March 31,2024. The CD

asked for extension of time for making the payment, which

was refused by the IL&FS. On 13.05.2024, IL&FS terminated

the Settlement Agreement and demanded an amount of

Rs.2,574,312,692/- having not been paid by the CD.

(xii) On 06.08.2024, IL&FS filed Section 7 application being CP(IB)

No.558/2024 claiming default of Rs.2,574,312,692/-.

Notices were issued in Section 7 application. The CD filed its

reply. Several Interventions Petitions were also filed in

Section 7 application. One of the Intervention Petition was

filed by Gagan Tandon and other Homebuyers of Sushant

Golf City Project, seeking intervention. Several other

Intervention Petitions were filed by different parties, including

Financial Creditors.

(xiii) Adjudicating Authority heard the parties and passed an order

on 25.02.2025 admitted Section 7 application filed by the

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 10 IL&FS. The Adjudicating Authority held that CD having not

denied that it owns a substantial debt to the Applicant and

the CD has only disputed the quantum of default as claimed

in Section 7 application and has pleaded that amount

overdue is only Rs.83 crores. The Adjudicating Authority

held that quantum does not affect the application

admissibility. The Adjudicating Authority has held that the

CD having admitted the existence of the debt and the default,

and the default amount exceeds the statutory threshold of

Rs.1 crore, the application needs to be admitted. Section 7

application was admitted and moratorium was imposed

under Section 14 of the IBC and the Interim Resolution

Professional ("IRP") was also appointed. By the separate

orders of the same day, dated 25.02.2025, Intervention

Petitions filed by Gagan Tandon and other Intervenors, were

rejected.

(xiv) Aggrieved by the order dated 25.02.2025 admitting Section 7

application, these two Appeal(s) have been filed.

4. When these two Appeal(s) came for hearing on 26.03.2025, learned

Counsel for LDA and other Development Authorities sought leave to file

Intervention Applications. Learned Counsel for the Homebuyers also

sought leave to file Intervention Applications for Homebuyers. On

26.03.2025, following order was passed in these Appeal(s):

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 11 "26.03.2025: This appeal has been filed against the order initiating CIRP on 25.02.2025. Shri Gopal Jain appears for the IL&FS Financial Services Ltd/ Financial Creditors. Ld. Counsel for the Lucknow Development Authority and other Development Authorities submits that they have also stake in the matter and they should be permitted to intervene. Ld. Counsel appearing for Homebuyer also seeks liberty to file an intervention application. We permit Lucknow Development Authority and other Development Authorities as well as Homebuyers to file an intervention application along with affidavit within a week from today.

Shri Gopal Jain, counsel appearing for IL&FS Financial Services Ltd. may file Reply to the appeal within two weeks.

Company Appeal (AT) (Ins) No. 500 of 2025

Shri Gopal Jain, Counsel appears for the IL&FS Financial Services. Reply, if any, be filed before the next date. Intervention application be served on both Appellant as well as IL&FS Financial Services.

List these appeals on 15.04.2025 for admission/ disposal."

5. Various Intervention Applications have been filed by the LDA and

other Development Authorities and different other Statutory Authorities

as well as the Homebuyers. We need to notice pleadings and facts

brought in some of the IAs, so as to capture the nature of dispute and

other aspects of the real estate Projects, which are up for consideration.

6. IA No.2249 of 2025 : This IA has been filed by LDA praying for

intervention, wherein following prayers have been made:

"(a) Allow the intervention application of the applicant being a necessary party whose rights have been severely prejudiced by the order dated 25.02.2025 passed by the Hon'ble NCLT without impleading the applicant; and/or

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 12

(b) Pleased to set aside the order dated 25.02.2025 passed in CP No. IB 558(ND)/2024 passed by the Hon'ble National Company Law Tribunal, New Delhi; and/or

(c) Remand the matter back to the Hon'ble NCLT to pass appropriate orders after hearing and impleading the necessary and affected parties i.e. L.D.A. in the present application; and/or

(d) Stay the proceedings before the Ld. IRP till the disposal of the present application; and/or

(e) Pass any other or further order of any nature, direction as this Hon'ble Tribunal may deem fit and proper in the facts and circumstances of the present case and in the interest of justice."

7. LDA's case in the application is that as per the Hi-Tech Township

Scheme of the State of UP, an MoU was entered with LDA and the Ansal

Properties and Infrastructure Limited for development of 1765 acres of

land on Lucknow Sultanpur Road for Hi-Tech Township. In furtherance

of which a Development Agreement was also executed between the

parties. The MoU was for 1765 acres of land. Further, first extension of

1765 acres of land was also done totaling to 3530 acres. Further

extension was granted with 2935 acres of land and DPR for 6465 acres

was sanctioned on 23.05.2015 in approved layout/map. In the MoU

dated 26.11.2005, 25% of the saleable area was to be retained by the

LDA. In the application various Clauses of MoU and the Development

Agreement have been referred to, including the Clause of Performance

Guarantee. The Applicant's case is that the CD has also mortgaged its

land and executed various Mortgage Deeds, which were registered on

15.10.2018 and thereafter. The Applicant's case is that LDA has also filed

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 13 the claim in Form-C and the claim was filed on 11.03.2025 for Rs.4,490

crores and also claimed security interest in various land of the CD by

different Mortgage Deed and guarantees issued, which claim is claimed to

have been filed for abundant caution. The LDA also claimed to have filed

FIR C.C. No.080 of 2025 against the CD. It is pleaded that in event of

non-completion of the project by the CD, the LDA has the first right to

complete the project as per Government Hi-Tech Policy and various MoU

and Development Agreement entered between parties. It is further

pleaded that the proceedings initiated under Section 7 are malicious

proceedings, which are against the public interest. The Applicant prays

that the order initiating CIRP be set aside. Reply and rejoinder to the IA

have also been filed.

8. IA No.2254 of 2025 : This IA has been filed by Bulandshahr

Khurja Development Authority ("BKDA") seeking intervention in the

Appeal. In the Intervention Application, the Applicant prays for setting

aside order dated 25.02.2025 and has further prayed that the matter be

remanded back to the NCLT for hearing the Applicant - BKDA. The

Applicant's case is that the Applicant is a Statutory Authority constituted

under the U.P. Urban Planning & Development Act, 1973. The Applicant

claims that proceeding initiated is a malicious initiation. The Applicant

being major stakeholder in the development of integrated Township under

the State Policy, was required to be heard. It is pleaded that the CD had

various resources to pay the alleged due to IL&FS, which has not been

paid. The proceedings initiated is more in nature of recovery of debt. The

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 14 Applicant has a claim of Rs.16879 crores. The MoU dated 18.11.2004 for

development of Hi-Tech Township was executed between M/s. Uttam

Galva Steels Ltd. and M/s Ansal Properties & Industries Ltd. for

development of Hi-Tech Township. A MoU was signed between BKDA and

M/s Uttam Steel & Associates Consortium and a Development Agreement

was signed on 07.07.2008 for development of 5.22 acres of land. There

was Performance Guarantee wherein 25% of the saleable land has to be

kept as mortgaged. Development Agreement-2 was executed and a

Security Bond was also executed. BKDA by letter dated 29.04.2023 sent

reminder to pay outstanding amount of more than Rs.211 crores. It is

submitted that development of Hi-Tech Township Project named - Dadri

Project Scheme, Bulandshahr Khurja is different district from the

Lucknow Project developed by the CD. Various FIRs have been lodged by

the Applicant and the Homebuyers against the CD. The entire

proceedings of the CD is vitiated since CD deliberately connived in

initiation of insolvency proceedings to overcome the various statutory/

legal proceedings initiated against them in various Fora. The CD is using

the present proceedings to avoid payment of legitimate dues of

Government Authorities and defrauding the gullible home buyers. Reply

has also been filed in the application, to which rejoinder has also been

filed.

9. IA No.2256 of 2025: This IA has been filed by Ghaziabad

Development Authority ("GDA") seeking intervention as praying to set

aside order dated 25.02.2025. GDA has entered into Development

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 15 Agreement with CD for development of integrated Township in the City of

Ghaziabad. Total land of 3847 sqm of land is mortgaged with GDA

through registered Mortgage Deed. There is liability of the CD of

Rs.15,38,80,000/-. A Development Agreement was entered with GDA and

CD on 09.05.2007 for integrated Township for 153 acres of land, under

which the CD was to pay various development charges, Performance

Guarantee to mortgage of 25% of total land in favour of GDA was also

executed. The initiation of CIRP is malicious initiation. The GDA has also

filed claim as Financial Creditor on 23.03.2025. Reply has also been filed

by the ILFS to the application, to which rejoinder has also been filed.

10. IA No.2251 of 2025: This IA has been filed by Neha Singh and

four others, who claimed to be purchasers of different plots of land from

the CD in Sushant Golf City, Project partially developed by the CD, which

Township is situated in Lucknow. The CD has issued the allotment letter

in favour of the Applicants, who have paid sale consideration. The

development of basic civic amenities, which was to be developed by the

CD is still under way. The Sushant Golf City-Hi Tech Township is an

amalgamation of different projects within it and the NCLT instead of

keeping those projects which are sufficient to secure the loan of the CD

has initiated CIRP against the CD itself encompassing all its projects

across the country and imposing moratorium against all the Projects. The

Applicant prays that Applicant be permitted to intervene and development

work be resumed.

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 16

11. IA No.2252 of 2025 : This IA has been filed by Arbind Kumar

Mishra & 26 others, who claimed to be buyers of residential apartment/

independent floors/ villa & plots in Sushant Golf City, Lucknow developed

by the CD. It is pleaded that order dated 25.02.2025 should not be made

applicable to Sushant Golf City, Lucknow Hi-Tech Township as the same

has been initiated under the UP Hi-Tech Township Policy of the State

Government of the U.P. and the project is being constructed under the

MoU and the Joint Development Agreement between the LDA and the CD.

The initiation of CIRP will jeopardize the real estate project and cause

irreparable loss and injury to thousands of Homebuyers. The Applicant

refers to different Clauses of the MoU. It is pleaded that Section 7

application has been filed only for the debt of Rs.83 crores and the

creditors are misusing the provisions of IBC as a money recovery tool

rather than seeking a resolution process. The debt of Rs.83 crores is

negligible compared to the only Lucknow project, which valuation is more

than Rs.26,000 crores, which comprises of public funds. The

continuation of CIRP will jeopardize registries and the rights of the

Applicant. It is pleaded that in Company Petition No. (IB)-297(ND)/2023

in Indian Bank vs. Ansal Properties & Infrastructure Ltd., the NCLT

has confined the CIRP to "Serene Residency Group Housing Project" at

Sector ETA II, Greater Noida and did not extend it to the entire company.

The Applicant seeks intervention and prays that impugned order dated

25.02.2025 be set aside and LDA be directed to take over all the Projects

and the land of Sushant Golf City as per MoU, which is under UP Hi-Tech

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 17 Township Policy 2003 and to ensure that all the Projects are developed. It

has further been prayed that CIRP be confined to specific Project,

Sushant Golf City, Lucknow. Following prayers have been made in the

application:

"A. Admit the present application and be pleased to consider the grounds raised herein in the interest of justice.

B. Allow the present Intervention Application and implead the Applicant(s) as necessary parties in the instant appeal in order to protect their legitimate interests.

C. Set aside the Impugned Order dated 25.02.2025 passed by the NCLT, Bench IV, New Delhi in CP No.: IB 558(ND)/2024 titled as "IL&FS Financial Services Limited VERSUS M/s Ansal Properties and Infrastructure Limited" with consequential reliefs; and

D. Direct the Lucknow Development Authority (LDA) to take over all the projects and the land of Sushant Golf City, Lucknow, as per the Memorandum of Understanding (MOU) and the Uttar Pradesh Hi-Tech Township Policy 2003, to ensure that all the projects in which money has been taken from the buyers are constructed and completed. The LDA is obligated under the MOU and the UP Hi-Tech Township Policy 2003 to complete the project in case the developer fails to do so.

E. Confine the CIRP proceedings to the specific project, "Sushant Golf City, Lucknow", in line with the precedents set by the Hon'ble NCLAT and NCLT in similar matters; F. Pass such other and further orders as this Hon'ble Tribunal may deem fit and proper in the interest of justice."

12. IA No.2555 of 2025 : This IA has been filed by Arvind Dwivedi,

who claims to have entered into Buyer Agreement with respect to a

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 18 residential unit in Sushant Golf City, Lucknow Project. The Applicant

claimed to have paid all the instalments. A Tripartite Agreement has been

entered with the Indian Bank, the CD and the Applicant, where Applicant

has been paying EMI to the Bank. The Applicant has executed one more

Plot Buyer Agreement with the CD. The Applicant has referred to CP(IB)

No.330(ND)2021 - Bibhuti Bhushan Biswas & Ors. vs. Ansal

Properties and Infrastructure Ltd., where the CIRP was admitted on

16.11.2022, wherein Appellate Tribunal vide order dated 04.03.2024

restrained the Project to the Project 'Fernhill' of the CD in Company

Appeal (AT) (Ins.) No.41 of 2023. Another CP(IB) No.297(ND)/2023 -

Indian Bank vs. Ansal Properties and Infrastructure Ltd. has been

admitted by the NCLT on 20.10.2023 qua "Serene Residency" Project of

the CD. The Applicant seeks intervention and prays that Appeal No.502

of 2025 be dismissed.

13. IA No.2993 of 2025 : This IA has been filed by Apexstar Infracon

Pvt. Ltd. and four others, who claim to have been invested money in

several properties of the CD. Reference to various FIRs against the

Promoter have also been made. Actions taken by Uttar Pradesh Real

Estate Regulatory Authority against the CD and its Promoters have also

been highlighted. The Applicant prays that Appeal be dismissed.

14. IA No.3001 of 2025: This IA has been filed by Rakesh Pandey and

26 others, who claim to be Homebuyers and have paid substantial

amount to the CD, who claim to be aggrieved by the order dated

25.02.2025, initiating the CRIP and have sought intervention.

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 19

15. IA No.4193 of 2025: This IA has been filed by Raavee Buildcon Pvt.

Ltd. and two others. The Applicant has filed this application to safeguard

its rights and obligations with respect to Sushant Taj City Project in Agra,

UP. It claims to be co-developer along with the CD. The Applicant claim

to have made efforts and paid substantial amount, and the Project has

been progressing. It has received payments from 117 buyers and

executed Sale Deed to 210 homebuyers. The Applicant seeks intervention

and prays that Appeal be dismissed.

16. IA No.5887 & 5888 of 2025: This Application has been filed by

Army Welfare Housing Organisation seeking intervention, who claimed to

have purchased a land admeasuring 28.81 acres situated at Sector 114,

Mohali, Punjab from the CD. The Applicant claims to have filed petition

under Section 11(6) of the Arbitration & Conciliation Act, 1996 before the

High Court of Punjab. There are 1048 allottees, who are serving/ retired

Army Personnel and their widows. The Applicant seeks intervention in

the proceedings. In IA No.5888 of 2025 - The Applicant prayed for

direction to accept the claim of the Applicant and CD to obtain regulatory

approvals from the Regulatory Authorities relating to Applicant's Group

Housing Project at Sector 114 Mohali. Certain other prayers have been

made. The Applicant also claims to have filed its claim in Form-C on

10.09.2025.

17. IA No.3556 of 2025: This IA has been filed by Shri Abhay

Kesarwani and 47 others, who claim to be Homebuyers of Project namely

- Sushant Golf City Hi-Tech Township, Lucknow. The Applicants claim

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 20 that there are various Builder Buyer Agreements executed by the CD and

with respect to certain buyers Sale Deed have also been executed. The

Applicant seeks intervention and has prayed that Management be

permitted to run the Project Sushant Golf City Hi-Tech Township, which

be kept out of CIRP process and direction be issued for execution of

Conveyance Deed in favour of the Homebuyers.

18. IA No.2261 of 2025 in Company Appeal (AT) (Ins.) No.500 of

2025: This IA has been filed by UP Awas Evam Vikas Parishad

("UPAEVP") making following prayers:

"a. Allow the UP A VP to intervene in the present appeal; b. Direct the IRP of the Corporate Debtor to release the land in question in favor of the UP A VP, which is part of the mortgage deed/ performance guarantee dated 26.08.2019; c. IRP may be directed to not to create any hindrance in the right of UPA VP with respect to 6.954 acres of land which is part of the mortgage deed and has stand vested in the UP A VP;

d. Pass any other order as this Hon'ble Appellate Tribunal may deem fit and proper in the light of facts and circumstances hereof.

19. The case of the UPAEVP in the application is that 74.876 acres land

situated at Sultanpur Road in land Development and Housing Scheme

(Awadh Vihar Scheme) at Sector-7B, Village Barauna, Lucknow, which

was utilized in favour of the CD, for which land the CD was required to

make payment to the UPAEVA, as per the rate agreed between the parties

and amount payable by M/s Ansal was convered into installments. The

UPAEVP in is 236th Board Meeting held on 31.05.2016 decided that

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 21 registered mortgage deed shall be executed from M/s Ansal only towards

the amount payable by them from the land owned by them. Under the

239th Board meeting held on 21.10.2016, a proposal was passed about

excluding the 74.876 acres of land situated a village Baruna from the Hi-

Tech Township Project. In continuation of which Gazatte Notification

dated 03.12.2016 was published. A mortgage deed between the UPAEVP

and the CD was executed on 28.06.2019 with respect to certain areas of

land included in 74.876 acres of land of which only 24.638 is part of Hi-

Tech Township (Sushant Golf City). The Demand Letter was issued by the

UPAEVP to the CD. The CD deposited certain amount, but substantial

amount is still due, for which the Deputy Housing Commissioner of

UPAEVP on 12.04.2024 requested the District Magistrate, Lucknow to

initiate recovery proceedings against the CD. The CD had entered into a

Mortgage Deed, which is in the nature of performance guarantee with the

UPAEVP. On default of the CD, the possession of the land has to

automatically come in possession of the UPAEVP. After execution of

Mortgage Deed, the CD has no right over the land. Out of 74.876 acres of

land, 24.638 acres of land has been released in favour of the CD by

UPAEVP as per the proportionate payment made by the CD and on the

balance 50.238 acres of land, the CD does not have any right. The

UPAEVP has also lodged FIR against the CD on 29.03.2025. The UPAEVP

has already filed a claim dated 14.04.2025 for an amount of

Rs.58,11,68,417/-. The UPAEVP has also filed an application before the

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 22 Adjudicating Authority for excluding the above land from the assets of the

CD.

20. IA No.2264 of 2025 in Company Appeal (AT) (Ins.) No.500 of

2025: This IA has been filed by Uttar Pradesh Real Estate Regulatory

Authority ("UP RERA") praying for following reliefs:

"a. Allow the present Intervention Application and add the Applicant as a proper party to the captioned Appeal in the present facts and circumstances of the matter;

b. Allow the Applicant Authority to file a response to the present Appeal as well as the connected Appeal;

c. Pass any other Order(s) as this Hon'ble Appellate Tribunal may deem fit and proper in the facts and circumstances of the present matter."

21. In the application UP RERA claimed that it is an Statutory

Authority established under the Real Estate (Regulation and

Development) Act, 2016. Certain Projects are being developed by the CD

under the Hi-Tech Township Policy of the State Government. Various

complaints were received by the UP RERA from different Homebuyers, on

which notices were issued to the CD and various orders imposing penalty

have been passed against the CD. The CD has got several Projects

registered with the UP RERA. The UP RERA has also directed the CD for

getting the unregistered Projects registered. An additional affidavit has

been filed by the UP RERA, where it has been pleaded that the CD has

registered 93 real estate projects under the subject property at Lucknow.

The subject property of the CD spans across an area of 4655 acres, which

has more than 18,000 allottees. It is pleaded that CIRP proceedings will

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 23 defeat the very objective of the RERA Act and this Tribunal may modify

the order dated 25.02.2025 and quash the initiation of CIRP.

22. We have heard learned counsel Mr. M.P. Sahay appearing for the

appellant in Comp. App. (AT) (Ins.) No. 500/2025 and learned counsel Ms.

Neeha Nagpal appearing for the appellant in Comp. App. (AT) (Ins.) No.

502/2025 as well as learned Sr. counsel Mr. Gopal Jain appearing for

IL&FS. We have also heard learned counsel for the intervenors including

learned counsels appearing for different Development Authorities.

23. The submission of learned counsel for the appellant in Comp. App.

(AT) (Ins.) No. 500/2025, hereinafter referred to as submissions on behalf

of the appellants - homebuyers. It is submitted that adjudicating

authority committed error in initiating CIRP against the corporate debtor.

Initiation of CIRP will jeopardise and prejudice the Real Estate Projects

and cause irreparable loss, harm and injury to thousands of homebuyers.

Real Estate Project was floated under the policies of Government of Uttar

Pradesh, where corporate debtor is a licence holder authorised to

construct and developed the project. In view of the Memorandum of

Understandings (MoUs) entered with the corporate debtor and Lucknow

Development Authority (LDA), LDA was entitled to take over the project in

question, in event, the corporate debtor failed to develop the project.

Section 7 application was filed by the financial creditor for a debt and

default of Rs.83 crore approximately. Financial creditor does not intend

to resolve the corporate debtor rather using the Section 7 proceedings as

money recovery tool. Corporate debtor has substantially completed the

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 24 township project and delivered several thousand units to the allottees.

Initiation of insolvency is against the interest of the homebuyers.

Running of CIRP in Real Estates matter is a very complex and often a

futile exercise. The delay in possession will have a cascading effect on the

finance of the homebuyers as they are paying both EMIs to the banks and

rents of their houses. The project being developed under state policy

ought to be excluded from the CIRP which has been initiated against the

corporate debtor. All appellants are allottee of the Suhant Golf City High-

Tech Township Project, for which the corporate debtor was selected as a

developer under the state policy. The land is owned by the State

Government. Learned counsel for the appellant - homebuyers submits

that appellants have also filed an application for intervention in Section 7

proceedings which was erroneously rejected by the adjudicating authority.

Appellants are stakeholders in CIRP and Section 7 application filed by the

financial creditor need to be dismissed in alternative the Township Project

be excluded from purview of CIRP or this Tribunal may pass such other or

further orders as may be deemed fit.

24. Learned counsel for the appellant in Comp. App. (AT) (Ins.) No.

502/2025 submits that corporate debtor has made efforts to liquidate the

entire amount of the financial creditor as settled, out of settlement

amount, amount of Rs.28.36 crore was paid by 31.03.2024 and corporate

debtor has prayed for extension of some more time to pay the balance

which was erroneously rejected by financial creditor. The corporate

debtor has explained the reason for delay in arranging the funds. The

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 25 default amount as claimed in Section 7 application is of

Rs.257,43,12,692/- is not the amount in default and at best the default

was only Rs.83 crore. The corporate debtor is financially stable and

solvent company, it has substantial receivables from its various projects

across India, including Mother City, Lucknow, which receivables are

multiple times than the amount of alleged debt, given available resources,

there is no justification for initiating CIRP against the corporate debtor.

Corporate debtor has settled huge chunk of allottees/customers of its

project situated throughout India. In Lucknow, corporate debtor has

settled its customers amounting to about Rs.126 crore. Corporate debtor

has executed total of 3,306 Sale Deeds in favour of the allottees. The

default by the corporate debtor is only with respect to the Project "Mother

City, Lucknow". The project in default and CIRP initiated against the

corporate debtor should be limited to the project in default only.

Adjudicating authority failed to appreciate that if the distress or default is

limited to one Project "Mother City, Lucknow", CIRP should be limited to

that project alone. Adjudicating authority committed an error in

admitting Section 7 application despite the fact that the corporate debtor

had shown bona fide intent to repay and has already repaid Rs.28.36

crores under the Revised Settlement Amount. The financial creditor is

misusing the IBC proceedings as debt recovery tool. Adjudicating

authority failed to appreciate that in case of CIRP against the Real Estate

Company, it is very difficult to follow the normal process and a reverse

CIRP should be followed in the case of Real Estate Companies in the

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 26 interest of the allottees and to ensure survival of Real Estate Company,

and to ensure completion of projects which provide employment to large

number of unorganized workman and provide benefits to all other

stakeholders in the infrastructure projects. The corporate debtor has

several projects spread all over India and default being mainly in the

Mother City, Lucknow, CIRP should be restricted to Lucknow Project only.

The blanket admission of CIRP without restricting it to a particular

project is contrary to settled judicial principles that require insolvency

resolution to be undertaken on a project specific basis.

25. Learned counsel appearing for the Intervenor - LDA submitted that

corporate debtor has entered into MoU with LDA under the High-Tech

Township Policy of the State Government. MoU was entered on

26.11.2005 with corporate debtor and the LDA under which the corporate

debtor was selected as developer for developing 1,765 acres of land for

High-Tech Township. The corporate debtor was granted various

concessions like waiver of payment of 10% acquisition cost, waver of

stamp duty. 5 Development Agreements were executed between the LDA

and the corporate debtor from 18.11.2006 to 26.04.2011 under which

Development Agreements, the corporate debtor had to carry out the

development work under High-Tech Township Policy 2003. As per the

Development Agreement, the corporate debtor had to give performance

guarantee providing that LDA shall retain 25% of the total saleable land.

In subsequent Development Agreement dated 20.08.2010, the corporate

debtor was required to mortgage 25% of the total saleable land in favour

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 27 of the LDA. The Agreement also contemplated that in event, the developer

fails to complete the project, the project shall be completed by the LDA. It

is submitted that land was provided by the LDA by acquiring the land.

Land was also provided by the state of Uttar Pradesh by resuming land

from various Gaon Sabhas under Uttar Pradesh Zamindari Abolition and

Land Reforms Act, 1950. The land on the project was land provided to

the corporate debtor by the state and the LDA. The corporate debtor

committed error in entering into Rupee Loan Agreement with IL&FS in the

year 2016, where all relevant clauses of MoU and the Development

Agreement were concealed. It is submitted by the learned counsel for the

LDA that Section 7 proceedings have been fraudulently initiated to harm

the interest of all stakeholders. The corporate debtor was fully capable to

discharge the amount of Rs.83 crore which was due as per Settlement

between the IL&FS and the corporate debtor. Large number of First

Information Reports were lodged against the corporate debtor and its

Director and corporate debtor in connivance with IL&FS initiated

proceedings to save itself from its obligation to complete the project and

pay dues of LDA and other stakeholders. Learned counsel for the LDA

submits that in the facts of the present case, LDA was also necessary

party to the proceeding and ought to have been heard before taking a

decision to initiate CIRP against the corporate debtor. It is submitted that

as abundant caution, LDA has also filed its claim in the CIRP. Dues of

the LDA are more than Rs.4,490 crore. The corporate debtor has been

provided land of thousands of acres. Corporate debtor has also executed

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 28 various mortgage deeds in favour of the LDA towards performance

guarantee. In the High-Tech Township Project, launched by the State of

Uttar Pradesh for the benefit of City population will suffer a jolt due to

initiation of CIRP which is not in the interest of all stakeholders.

26. Learned counsel appearing for the Bullandshahar Khurja

Development Authority submitted that the Bullandshahar Khurja

Development Authority has entered into the MoU with corporate debtor

and Uttam Steels and Associates Consortium, which project is at Dadri.

MoU was entered on 13.12.2006 between the Ghaziabad Development

Authority (GDA) and the consortium for development of High-Tech

Township, where clause 22 provided for retention of 25% of total saleable

land of the project and right to sale the asset mortgaged land on non-

completion of development work. It is submitted that default committed

in by the corporate debtor in the Lucknow Project cannot be a reason to

put other projects in jeopardise Bullandhahar Khurja Development

Authority by abundant caution without prejudice to its right filed it claims

as a financial creditor in 'Form-C' in the CIRP. CIRP has been initiated

from non-payment of dues in the Lucknow project of corporate debtor,

whereas the Project of Bullandhahar Khurja Development Authority is

situated in Dadri. More than Rs.1,687 crores are dues on the corporate

debtor. Corporate debtor had various resources to pay the alleged dues of

the IL&FS. Learned counsel for the appellant submitted that with respect

to security given under the Loan Agreement 1 & Loan Agreement 2 by

IL&FS securities are given out of receivables from Project at Lucknow.

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 29

27. Learned counsel for the GDA also submitted that GDA has entered

into MoU with corporate debtor for development of Integrated Township in

the City of Ghaziabad. Mortgaged Deed has also been executed by

corporate debtor in favour of the GDA by abundant caution the claim has

been filed as a financial creditor. The Section 7 proceeding has been

maliciously initiated before the NCLT. Adjudicating authority ought to

have appreciated that initiation of insolvency proceedings against

corporate debtor will affect all the High-Tech/Integrated Township

Projects in the State of Uttar Pradesh, various Development Authorities,

homebuyers etc. shall be prejudicially affected. Adjudicating authority

ought to have been heard development authority as necessary party

before passing the order on 25.02.2025 since the impact ramification of

the impugned order has much wider implication to the public authorities/

public money and affects and the confidence of the allottees in various

projects being developed under the High-Tech/Integrated Township policy

for the state of Uttar Pradesh. Learned counsel for the GDA has also

prayed for setting aside the order initiating the CIRP.

28. Learned Sr. counsel Mr. Arijit Prasad appearing for the UP Awas

Evam Vikas Parishad also submitted his submission that UP Awas Evam

Vikas Parishad has made available the land to the corporate debtor for

carrying out development. It is submitted that the Projects of UP Awas

Evam Vikas Parishad which was being developed by the corporate debtor

be kept out the CIRP process.

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 30

29. Several intervention applications have been filed by the homebuyers

of Sushant Golf City Projects, Lucknow and homebuyer of other Projects

situated in Agra, Mohali, Punjab, which we have noticed as above, the

homebuyers in different intervention applications having quite different

views. In some of the applications homebuyers prayed that CIRP be not

initiated at all with respect to any project, in some of the applications it is

prayed that Lucknow Project of Sushant Golf City be excluded from CIRP,

in some of the applications it is prayed that CIRP, if any, be initiated only

with respect to Lucknow Project. It is submitted in the intervention

applications filed by the homebuyers that there is precedent of two earlier

CIRPs where NCLT have initiated CIRP with respect to two specific

projects of the corporate debtor. It is submitted that in one project at

Gurgaon namely 'Fernhill Project', there is direction of this Tribunal to

confine the CIRP to 'Fernhill Project' and another project namely Serene

Residency Group Housing Project situate in Greater Noida is also Project

specific CIRP where CIRP was sought to be initiated against the corporate

debtor. There are thus two earlier precedents where CIRP has been

initiated with regard to two different projects of the corporate debtor and

not the corporate debtor as a whole.

30. Learned counsel appearing for UP RERA has also prayed for

intervention claiming that RERA which is statutory authority to regulate

development of all Real Estate Projects ought to have been heard by the

adjudicating authority before initiating CIRP.

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 31

31. Learned Sr. counsel Mr. Gopal Jain appearing for the IL&FS

submits that the adjudicating authority has rightly admitted the Section 7

application, there being admitted debt and default on the part of the

corporate debtor. It is submitted that financial creditor has granted

ample opportunity to the corporate debtor to pay its outstanding debt in

which corporate debtor miserably failed. C.P. (IB) No. 1649/2019 was

earlier initiated by IL&FS which was withdrawn on 27.04.2021 on

Settlement Proposal submitted by the corporate debtor to IL&FS.

Corporate debtor entered into Settlement dated 03.03.2022 for

Rs.109,66,00,000/- out of only Rs.5 crore was paid. Subsequently on

31.10.2023, corporate debtor proposed a revised settlement for

Rs.111,36,00,000/- out of which entire amount was to be paid by

31.03.2024. Corporate debtor has paid only amount of Rs.28.36 crore.

Request for further extension of time was not accepted and the Settlement

Agreement was recalled by IL&FS on 13.05.2024, hence the total amount

of Rs.257,43,12,692/- became due for which Section 7 proceeding has

been initiated.

32. Learned counsel for the appellant referring to the reply of the

corporate debtor filed in Section 7 application submits that the corporate

debtor pleaded in the reply that at best the default is an amount of only

Rs.83 crores. It is submitted that default having been admitted by the

corporate debtor, twin test for admission of Section 7 application were

clearly fulfilled. Learned counsel for the appellant has relied on the

judgment of the Hon'ble Supreme Court in 'Innoventive Industries

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 32 Limited' Vs. 'ICICI Bank & Anr.' reported in [(2018) 1 SCC 407] and in

'E.S. Krishnamurthy' Vs. 'Bharath Hi-Tecch Builders (P) Ltd.'

reported in [(2022) 3 SCC 161] as well as the judgment of the Hon'ble

Supreme Court in 'M. Suresh Kumar Reddy' Vs. 'Canara Bank'

reported in [(2023) 8 SCC 387]. Learned counsel for the IL&FS submits

that the CIRP Regulations, 2016 has been amended under which now the

resolution for Real Estate Projects, RP with the concurrence of the

Committee was entitled to call for resolution plan project wise. It is

submitted that statutory regulation provides for mode and manner of

project wise resolution of Real Estate Company and the question of

project wise resolution is a question which has to be considered and gone

into subsequent to the admission of CIRP. It is submitted that admission

of CIRP is in no manner can be faulted on the ground that corporate

debtor has large number of projects. It is submitted that Competent

Authority i.e., RERA who is regulatory authority for regulating the

projects can be invited to attend the meeting of the CoC for overseeing the

development. It is submitted that as per the terms and conditions for

both the Rupee Term Loan Facility dated 16.02.2016 and 26.10.2016, the

loan was taken by the corporate debtor for all the projects and Term Loan

Facility extended by IL&FS was not for any specific project. It is

submitted that mortgage of land by the corporate debtor in favour of the

IL&FS was earlier in point of time to the mortgage executed in favour of

the LDA by the corporate debtor. It is submitted that all relevant

documents pertaining to mortgage and security created by the corporate

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 33 debtor were on the record and were part of the Section 7 application. It is

submitted that Development Authorities and other regulatory authorities

who have filed intervention applications are free to approach the

adjudicating authority for the grievances which are sought to be raised in

these appeals. The prayer for excluding the particular project from CIRP

can always be made before the adjudicating authority who seized of the

entire matter.

33. Learned Sr. counsel Mr. Gopal Jain in the end submits that this

Appellate Tribunal being exercising the same powers which adjudicating

authority has exercised, it may issue necessary direction with regard to

mode and manner in which resolution of different Real Estate Project has

to be undertaken by the adjudicating authority, however, those are steps

which need to be taken consequent to initiation of CIRP and has no effect

on the initiation of CIRP which was validly made by the adjudicating

authority.

34. We after hearing the learned counsel for the parties and the

intervenors has noted their respective submissions in order dated

25.04.2025 including the submission regarding project wise

resolution/reverse CIRP mechanism. We passed an interim order

directing that till the next date of hearing, no 'Form-G' shall be issued in

CIRP of the corporate debtor and we had allowed the intervention

applications. In paragraphs 22 & 23, following order was passed:

"22. Intervention Application(s) filed by Development Authorities/ UPRERA/ UP Awas Evam Vikas Parishad and the Homebuyers, as

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 34 noted above are allowed. Intervenors are also allowed two weeks time to file affidavit in support of their case.

23. As noted above, keeping in view the issue pertaining to mode and manner of the resolution of CD and enormity of Projects, which are situated in different cities being involved, we need to hear the parties before issuing any direction with regard to manner in which Resolution of the CD shall proceed as per the provisions of the IBC. At this stage, we issue following directions:

(1) Lucknow Development Authority and other Development Authorities are given liberty to file an Application with regard to categorisation of their claims before the Adjudicating Authority, which may be considered and decided at an early date by the Adjudicating Authority.

(2) The IRP/ RP shall proceed to collate and verify the claims of Creditors in accordance with the CIRP Regulations, 2016.

Till the next date of hearing, CIRP may go on, however, no Form-G shall be issued in the CIRP of the CD.

Parties may complete the pleadings before the next date."

35. In Comp. App. (AT) (Ins.) No. 502/2025, we had passed an order on

01.07.2025 noticing the submission of the appellant in Comp. App. (AT)

(Ins.) No. 502/2025 to bring on affidavit details of all projects along with

the current status and other relevant fact. On 01.07.2025, we passed

following orders:

"Learned Counsel for the Lucknow Development Authority, Bulandshahr, Agra and Ghaziabad submits that they have filed the Applications and the affidavit as per earlier order of the Court and they have received the Reply in June, 2025 in all four matters by the IL & FS Financial Services Ltd. and they pray for a weeks' time to file Rejoinder.

Mr. Sumant Batra, Learned Counsel appearing in Company Appeal (AT) (Insolvency) No. 502 of 2025 submits that the Appellant be also allowed a weeks' time to bring on affidavit the details of all projects along with the current status and any other relevant facts with regard to said projects, the said affidavit be filed after serving it on the Respondent within a week.

In so far as the other applications which have been filed by Interveners, it is open for the parties i.e. the Appellant as well as the Respondent to respond before the next date.

List these Appeals on 07.07.2025 at 02:00 PM.

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 35 Interim Order to continue."

36. In compliance of the order dated 01.07.2025, appellant in Comp.

App. (AT) (Ins.) No. 502/2025 has filed an affidavit bringing on record the

project wise details as Annexure A-1 to the affidavit. Project wise Report,

Annexure A-1 indicate that the corporate debtor has listed 26 projects in

different cities of the state of Uttar Pradesh, state of Haryana, state of

Punjab and state of Rajasthan. With regard to Sushant Golf City,

Lucknow, Uttar Pradesh was mentioned as High-Tech Township

Development Project spread over approximately over 4,465 acres. The

project comprises RERA registered sub-Projects, some of which had

already been completed Occupancy Certificate obtained. Details of some

of the sub-Projects of Sushant Golf City, Lucknow are listed at Item No. 1

to 93, with average status of completion. Annexure A-1 brought on the

record by the Suspended Director of the corporate debtor by means of an

affidavit is made part of this judgment as Schedule I.

37. From the materials brought on record and submissions made by

counsel for the parties and intervenors reflects large scale projects of the

corporate debtor spread over different states of the country. In the state

of Uttar Pradesh itself several High-Tech Township/Integrated Township

Projects have been launched with corporate debtor as developer. In the

different project spread over several states, thousands of allottees are

involved. The appeals before us raise complex questions which arise in

resolution of Real Estate Projects.

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 36

38. Learned counsel for the parties have also relied on various

judgments of the Hon'ble Supreme Court and this Tribunal, where

mechanism for resolution of Real Estate Project was laid down.

39. From the materials on the record and submissions advanced by the

counsel for the parties, following are the issues which arose for

consideration in the present appeals:

I. Whether the IL&FS has brought sufficient materials to prove

that corporate debtor has committed default in payment to debt

due in respect of Loan Agreements dated 18.03.20216 and

25.11.2016 and there was sufficient ground to initiate CIRP

against the corporate debtor?

II. What are the purpose and extent of two loans and securities giv-

en by corporate debtor in two loans and whether securities ex-

tend to all the projects of corporate debtor or were confined to

only few of projects?

III. Whether moratorium imposed by order dated 25.02.2025 to ex-

tend all the projects of corporate debtor situated in state of Uttar

Pradesh and other states or need to be confined to only those

projects where corporate debtor has given securities for two

loans taken by IL&FS?

IV. Whether the adjudicating authority ought to have considered in

the CIRP project wise resolution/reverse CIRP to protect the in-

terest of all stakeholders?

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 37 V. Whether in the facts of the present case, the CIRP needed to be

confined at Lucknow Project i.e., Sushant Golf Project at first in-

stance or any other specific project wise resolution?

VI. Whether the facts of the present case have made out the case for

issuing direction for project wise resolution of the corporate

debtor/reverse CIRP in the interest of all stakeholders?

VII. What are the way forward and further directions needed in facts

of the present case?

Question No.I

40. We have noticed the background facts, which led the Financial

Creditor to file Section 7 application against the CD on 06.08.2024. The

basis of Section 7 application is two Loan Facilities extended by the IL&FS

to the CD. The first Loan Facility of Rs.50 crores was extended by Loan

Agreement dated 18.03.2016 and second Loan Facility of Rs.100 crores

extended by Loan Agreement dated 26.10.2016. The CD having

committed default, the Financial Creditor has initiated proceedings under

Section 7 (earlier proceedings) being CP(IB) No.1649/ND/2019, which

was withdrawn on 27.04.2021 on statements made by the parties before

the Adjudicating Authority that CD is making settlement offer. A

Settlement Agreement was executed on 03.03.2022. The CD has given a

settlement offer for Rs.109,66,00,000/-, under which settlement offer, an

amount of Rs.5 crores was paid. Revised settlement offer of

Rs.104,66,00,000/- was submitted by the CD, which was accepted by the

IL&FS on 22.11.2023. In pursuance of settlement an amount of Rs.28.36

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 38 crores was paid by the CD as on 31.03.2024. The CD asked for extension

of time for making payment till 30.09.2024, which was declined by IL&FS.

The IL&FS by letter dated 13.05.2024 terminated the Settlement

Agreement and demanded the entire amount of Rs.2,574,312,692/-. Due

to non-payment of the amount demanded, Section 7 application was filed

on 06.08.2024. In Part-IV of Section 7 application, Financial Creditor has

given details of its facilities, Sanctioned Letter dated 16.02.2016 and a

subsequent Sanction Letter dated 26.10.2016 and the Agreements

entered thereon. Part-IV of Section 7 application is as follows:

"Part-IV

Particulars of Financial Debt

1. Total amount of The Applicant has granted a total sum of Debt granted Rs. 150,00,00,000/- (Rupees One Hundred date(s) of and Fifty Crores) ("Entire Loan Amount") to disbursement the Corporate Debtor on the dates and in the manner as detailed out in Annexure- A-

4. The details of the transactions pursuant to which the said amounts were disbursed are as follows:

A. Facility I:

a. Pursuant to the request of the Corporate Debtor towards inter alia, requirement of funds for the development of a project (residential and commercial) at Lucknow ("Project"), the Applicant granted a term loan facility of upto Rs. 50,00,00,000/- (Rupees Fifty Crores only) ("Facility I") vide its Offer / Sanction Letter bearing no. D/ OTL/16/89 dated February 16, 2016 ("Sanction Letter I"). A copy of the Sanction Letter I is annexed herewith as Annexure- A-5.

b. In furtherance of the same, the Applicant executed a Loan Agreement dated March 18, 2016 ("Loan Agreement I")

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 39 with the Corporate Debtor. A copy of the First Loan Agreement is annexed herewith as Annexure- A-6.

c. Pursuant to the Loan Agreement I, the Applicant disbursed a total amount of Rs.50,00,00,000/- (Rupees Fifty Crores only) on the dates and in the manner as detailed out in Part A of Annexure-

A-4.

d. Subsequently, the Loan Agreement I was amended vide a Supplemental Agreement dated June 28, 2018 whereby repayment schedule as provided under Clause 14 of the Sanction Letter I was revised. A copy of the Supplemental Agreement dated June 28, 2018, is annexed herewith as Annexure- A-7.

B. Facility II:

a. Upon subsequent request of the Corporate Debtor, the Applicant granted another term loan facility of upto Rs. 100,00,00,000/ - (Rupees One Hundred Crores Only) ("Facility II") vide another Offer /Sanction Letter bearing no. DEL/OTL/17 / 100 dated October 26, 2016 ("Sanction Letter II"). A copy of the Second Sanction Letter is annexed herewith as Annexure- A-8.

b. In furtherance to the Sanction Letter II, the Applicant executed another Loan Agreement dated November 25, 2016 ("Loan Agreement II"). A copy of the Loan Agreement II is annexed herewith as Annexure- A-9.

c. Pursuant to the Loan Agreement II, the Applicant disbursed a total amount of Rs. 100,00,00,000/- (Rupees One Hundred Crores only) on the dates and in the manner as detailed out in Part B of Annexure- A-4.

[Facility I and Facility I/ are collectively referred to as "Facilities'1 {Loan Agreement I and Loan Agreement I/ are collectively referred to as "Loan Agreements']

2. Amount claimed The total amount claimed to be default is to be in default Rs. 257,43,12,692/- (Rupees Two Hundred and the date on Fifty-Seven Crore Forty- Three Lakh Twelve which the default Thousand Six Hundred Ninety-Two Only) -

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 40 occurred (attach (outstanding as on April 30, 2024). The date the workings for of default, as detailed hereinafter, is May computation of 21, 2024. amount and ....." dates of default in Tabular Form

41. In Part-IV details of the events subsequent to two Loan Agreements

including OTS proposal and revised OTS proposal, which were mentioned

under the heading A to FF. The Settlement Agreement entered between

the partis on 03.03.2022 had also approval of the NCLT, Mumbai vide its

order dated 14.10.2022. In Section 7 application, notices were issued by

the Adjudicating Authority and reply has been filed by the CD, which

reply has been brought on the record of the Company Appeal (AT) (Ins.)

No.502 of 2025. In the reply, which was filed to Section 7 application, the

CD has not disputed the default, which has been committed by the CD in

repayment of the loan. In Paragraph 5 of the reply, the CD pleaded that

amount outstanding is only Rs.83 crores as per revised settlement

amount. Paragraph 5 of the reply is as follows:

"5. The alleged default, as claimed by the Applicant, is Rs. 257.43 crores. The Applicant is not entitled to the alleged debt claimed to be in default. The alleged default does not reflect the true situation as the Respondent had entered into a Settlement Agreement dated 03.03.2022 with the Applicant, which was subsequently amended by Applicant's Letter dated 22.11.2023, whereby the Applicant sanctioned Rs. 111.36 crores ("Revised Settlement Amount") as the settled amount. The Respondent has already repaid Rs. 28.36 crores by 31st March 2024, and only a sum of Rs. 83 crores are outstanding of out the Revised Settlement Amount.

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 41

42. The CD, thus, in the proceedings under Section 7, did not dispute

that there is amount outstanding against the CD, payable to the Financial

Creditor.

43. We need to first notice the essential requirement, which needs to be

proved by a Financial Creditor for an application under Section 7. The

celebrated judgment on the subject, which is often referred to and relied

is judgment of the Hon'ble Supreme Court in (2018) 1 SCC 407 -

Innoventive Industries Ltd. vs. ICICI Bank and Anr. The Hon'ble

Supreme Court in Paragraph 28 of the judgment laid down that

Adjudicating Authority is to be satisfied that default has occurred and the

CD is entitled to point out that default has not occurred. In Paragraph 28

of the judgment, following has been laid down:

"28. When it comes to a financial creditor triggering the process, Section 7 becomes relevant. Under the Explanation to Section 7(1), a default is in respect of a financial debt owed to any financial creditor of the corporate debtor -- it need not be a debt owed to the applicant financial creditor. Under Section 7(2), an application is to be made under sub-section (1) in such form and manner as is prescribed, which takes us to the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. Under Rule 4, the application is made by a financial creditor in Form 1 accompanied by documents and records required therein. Form 1 is a detailed form in 5 parts, which requires particulars of the applicant in Part I, particulars of the corporate debtor in Part II, particulars of the proposed interim resolution professional in Part III, particulars of the financial debt in Part IV and documents, records and evidence of default in Part V. Under Rule 4(3), the applicant is to dispatch a copy of the application filed with the adjudicating authority by registered post or speed post to the

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 42 registered office of the corporate debtor. The speed, within which the adjudicating authority is to ascertain the existence of a default from the records of the information utility or on the basis of evidence furnished by the financial creditor, is important. This it must do within 14 days of the receipt of the application. It is at the stage of Section 7(5), where the adjudicating authority is to be satisfied that a default has occurred, that the corporate debtor is entitled to point out that a default has not occurred in the sense that the "debt", which may also include a disputed claim, is not due. A debt may not be due if it is not payable in law or in fact. The moment the adjudicating authority is satisfied that a default has occurred, the application must be admitted unless it is incomplete, in which case it may give notice to the applicant to rectify the defect within 7 days of receipt of a notice from the adjudicating authority. Under sub-section (7), the adjudicating authority shall then communicate the order passed to the financial creditor and corporate debtor within 7 days of admission or rejection of such application, as the case may be."

44. The next judgment to be noticed is the judgment of the Hon'ble

Supreme Court in E.S. Krishnamurthy and Ors. vs. Bharath Hi-Tech

Builders Pvt. Ltd. - (2022) 3 SCC 161, where the Hon'ble Supreme

Court held that the Adjudicating Authority is empowered only to verify

whether default has occurred or if a default has not occurred and based

on which decision, the Adjudicating Authority must either admit or reject

the application. In Paragraph 34 of the judgment, following has been laid

down:

"34. The adjudicating authority has clearly acted outside the terms of its jurisdiction under Section 7(5) IBC. The adjudicating authority is empowered only to verify whether a default has occurred or if a default has not occurred. Based upon its decision, the adjudicating authority must then either admit or reject an

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 43 application, respectively. These are the only two courses of action which are open to the adjudicating authority in accordance with Section 7(5). The adjudicating authority cannot compel a party to the proceedings before it to settle a dispute."

45. The next judgment which needs to be noticed is the judgment of the

Hon'ble Supreme Court in M. Suresh Kumar Reddy vs. Canara Bank

and Ors. - (2022) 8 SCC 387, where Hon'ble Supreme Court in

Paragraph 13-14 laid down following:

"13. A review petition was filed by Axis Bank Ltd. seeking a review of the decision of Vidarbha Industries [Vidarbha Industries Power Ltd. v. Axis Bank Ltd., (2022) 8 SCC 352 : (2022) 4 SCC (Civ) 329] on the ground that the attention of the Court was not invited to the case of E.S. Krishnamurthy [E.S. Krishnamurthy v. Bharath Hi- Tecch Builders (P) Ltd., (2022) 3 SCC 161 : (2022) 2 SCC (Civ) 129] . While disposing of review petition by order dated 22-9-2022 [Axis Bank Ltd. v. Vidarbha Industries Power Ltd., (2023) 7 SCC 321 :

(2023) 3 SCC (Civ) 773] , this Court held thus : (Vidarbha Industries Power case [Axis Bank Ltd. v. Vidarbha Industries Power Ltd., (2023) 7 SCC 321 : (2023) 3 SCC (Civ) 773] , SCC p. 323, paras 6-7) "6. The elucidation in para 90 and other paragraphs [of the judgment under review] [Vidarbha Industries Power Ltd. v. Axis Bank Ltd., (2022) 8 SCC 352 : (2022) 4 SCC (Civ) 329] were made in the context of the case at hand. It is well settled that judgments and observations in judgments are not to be read as provisions of statute. Judicial utterances and/or pronouncements are in the setting of the facts of a particular case.

7. To interpret words and provisions of a statute, it may become necessary for the Judges to embark upon lengthy discussions. The words of Judges interpreting statutes are not to be interpreted as statutes."

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 44

14. Thus, it was clarified by the order in review that the decision in Vidarbha Industries [Vidarbha Industries Power Ltd. v. Axis Bank Ltd., (2022) 8 SCC 352 : (2022) 4 SCC (Civ) 329] was in the setting of facts of the case before this Court. Hence, the decision in Vidarbha Industries [Vidarbha Industries Power Ltd. v. Axis Bank Ltd., (2022) 8 SCC 352 : (2022) 4 SCC (Civ) 329] cannot be read and understood as taking a view which is contrary to the view taken in Innoventive Industries [Innoventive Industries Ltd. v. ICICI Bank, (2018) 1 SCC 407 : (2018) 1 SCC (Civ) 356] and E.S. Krishnamurthy [E.S. Krishnamurthy v. Bharath Hi-Tecch Builders (P) Ltd., (2022) 3 SCC 161 : (2022) 2 SCC (Civ) 129] . The view taken in Innoventive Industries [Innoventive Industries Ltd. v. ICICI Bank, (2018) 1 SCC 407 : (2018) 1 SCC (Civ) 356] still holds good."

46. In the reply, which was filed by the CD before the Adjudicating

Authority, the CD placed reliance on judgment of the Hon'ble Supreme

Court in Vidarbha Industries Power Ltd. vs. Axis Bank Ltd. - (2022) 8

SCC 352, in which case the Hon'ble Supreme Court was of the view that

in the facts of the said case, where CD was possessed with decree in

arbitration of decretal amount, which was more than the debt and

default, it held that initiation of CIRP in such cases is not mandatory. In

the facts of the present case, there are no such facts or pleadings on

which it can be held that initiation of CIRP was uncalled for. It is true

that in the reply, the CD has pleaded that it is executing multiple projects

across diverse location and initiation of CIRP would paralyze these

projects and result in destruction of value for creditors and other

stakeholders.

47. We have considered the facts brought in the present case and all

materials, which have been brought by the Financial Creditor in Section 7

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 45 application filed against the CD. We are of the view that Adjudicating

Authority has rightly returned the finding that debt and default on the

part of the CD in repayment of dues of the Financial Creditor are fully

proved. In Paragraphs 12 and 13 of the impugned order, the Adjudicating

Authority has observed following:

"12. In light of these facts, it is evident that the Corporate Debtor has repeatedly failed to honor its financial commitments and has not adhered to the timelines set out in the Settlement Agreement. The Corporate Debtor's request for additional time to settle the case is not a legitimate defense against the admission of the application, as it is based on the same pattern of non-payment and delays.

13. In conclusion, the Corporate Debtor has admitted the existence of the debt and the default, and the default amount exceeds the statutory threshold of Rs. 1 crore. The dispute over the quantum of the debt does not affect the admissibility of the application at this stage, as it is a matter for the IRP to resolve post-admission. The Corporate Debtor's repeated defaults, failure to comply with settlement terms, and inability to provide a satisfactory justification for its non-payment further reinforce the need for admission of this application. Therefore, we find that the application under Section 7 of the IBC is complete in all respects, and we hereby admit the application."

48. We fully concur with the findings and conclusions drawn by the

Adjudicating Authority that CD has admitted the existence of the debt

and the default, and the default amount exceeds the statutory threshold

of Rs.1 crore. We, thus, are satisfied that order of Adjudicating Authority

initiating CIRP against the CD cannot be faulted. However, in view of the

fact that CD is carrying various projects situated in different locations of

the country, what would be the manner and procedure for conducting the

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 46 CIRP against the CD, shall be considered and examined by us in foregoing

paragraphs of this judgment.

49. In view of the aforesaid, we answer Question No.I to following effect:

The IL&FS (Financial Creditor) has brought sufficient

material to prove that the CD has committed default in

payment of its debt, due in respect of Loan Agreements

dated 18.03.2016 and 25.11.2016 and there was

sufficient ground to initiate CIRP against the CD.

Question No.II

50. By virtue of order dated 01.07.2025 in these Appeal(s), the CD has

filed an additional affidavit dated 04.07.2025 in Company Appeal (AT)

(Ins.) No.502 of 2025 bringing on record project-wise report regarding the

Projects undertaken by the CD from the year 2000. Annexure A-1

contains project wise report and details of 93 projects registered with UP

RERA, which Annexure A-1 is appended as Schedule-1 to this judgment.

Schedule-1 of the Annexure A-1, captures the extent of various projects,

which have been undertaken by the CD in different States of this country

and number of projects, which are being taken at mother City at

Lucknow.

51. Secton-7 application has been filed by the IL&FS with respect to

two Rupee Term Loan Facility extended by the Il&FS to the CD. First

Loan was sanctioned of Rs.50 crores by letter dated 16.02.2016 and the

second loan was sanctioned by Sanction Letter dated 26.10.2016. The

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 47 first Loan Agreement is dated 18.03.2016 and the second Loan Agreement

is dated 25.11.2016. The loan was sanctioned by IL&FS to the CD on the

terms and conditions, which were part of the Sanction Letter and Loan

Agreements were also executed. As per the terms and conditions, which

were offered to the CD, two relevant facts have been noticed in the Loan

Agreements are that the CD has already been sanctioned Rs.3930 million

(Rs.39.30 crores) funding facility by Consortium of Bankers under Pooled

Municipal Debt Obligation ("PMDO") and PMDO Facility of Rs.3210

million is proposed to the CD. The second Loan Agreement also notices

that projects of the CD are throughout in India. The Sanction Letters and

Loan Agreements thus provided for securities, which were to be given by

the CD for repayment of the two loans.

52. The CD has undertaken projects in different cities of UP under Hi-

Tech Township Policy of 2003 and apart from Lucknow, the CD entered in

agreement with Development Authorities and has been carrying out

different projects in different cities of the State of UP. The CD has also

Projects in other States including the State of Rajasthan, Haryana and

Punjab.

53. One of the major problem which is encountered with respect to

insolvency of real estate project, which are undertaken by a real estate

Company, are as to extent of the CIRP, which has been initiated by a

Financial Creditor of one particular Project of real estate Company when

the real estate Company is carrying on more than one Projects, several

difficulties arises. Few of which are:

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 48 (1) When Financial Creditor relying on one project, files an

application under Section 7 of the IBC against a real estate

Company, whether CIRP should confine to the Project in

question or it should take into its fold all the projects being run

by the real estate Company.

(2) When a Financial Creditor initiate the CIRP with respect to a

project situated in a particular City or a particular State,

whether the projects of the CD situated in different cities or

States, are also to be undertaken in the fold of the CIRP.

(3) When the Financial Creditor is a Financial Institution and it has

extended facilities to the CD and has taken security from the CD

for ensuring repayment of the loan, which security may include

one or more projects of the CD, whether the CIRP should confine

only to the projects and assets of the CD, which are part of the

securities mentioned in the Loan Agreement.

(4) When a CIRP against one project is being undertaken, whether

the CoC should confine to the claims with respect to the said

project only or it should extend to claims in various other

projects.

54. For answering some of the issues, which arose with respect to

insolvency resolution of the real estate project, we first need to notice the

Rupee Term Loan Facilities, which were the basis for initiation of Section

7 application by the CD. Part-IV of Section 7 application refers to two

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 49 Facilities. Facility-I of Rs.50 crores and Facility-II of Rs.100 crores and

total amount claimed is Rs.257,43,12,692. We have also extracted the

relevant portions of Part-IV in the above part of this judgment. Now we

need to notice the details of Facility-I and Facility-II. We also need to

notice the securities, which were contemplated in the Facility-I and

Facility-II and the securities, which have been mentioned in Section 7

application. The Financial Institutions when extend the loan facilities to a

CD for its repayment, securities are created and thus security interest of

the Financial Institutions is created in the asset. Facility-I was sanctioned

by letter dated 16.02.2016 and along with Sanction Letter, terms and

conditions for Term Loan Facility was also mentioned. We need to notice

few Clause of terms and conditions. In Clause-6 PMDO Facility has been

defined in following manner:

"6. PMDO Facility : Rs 3210 mn (proposed) and Rs 3930 mn funding facilities extended by Consortium of Bankers under "Pooled Municipal Debt Obligation" to Ansal API Infrastructure Ltd (AAIL) towards development of infrastructure at Lucknow Township"

55. Clause-7 contains definition of Hypothecated Identified Receivables

and other terms, which Clause-7 is as follows:

"7. (a) Hypothecated : (a) "Hypothecated Identified Identified Receivables" shall mean receivables Receivables aggregating to a minimum ~Rs.5.64 Bn from FSI of Mother City/ sold by APIL to various Buyers under DA I/II/III/ (Details of Hypothecated Identified Receivables are attached as Annexure A)

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 50

(b) Escrow FSI : (b) "Escrow FSI Receivables" shall mean Receivables identified receivables from out of the Hypothecated Identified Receivables aggregating to Rs 1.35 Bn or such amount as may be agreed (the "Escrow FSI Receivables") and which shall be deposited by the FSI Buyers directly into a designated account acceptable to IFIN (the "FSI Escrow Account") APIL/ Promoters will confirm & undertake & ensure that the entire Escrow FSI Receivables are deposited directly into the FSI Escrow Account by the FSI Buyers Details of Escrow FSI Receivables to be provided by the Borrower prior to disbursement

(c) Balance FSI : (c) "Balance FSI Receivables" shall Receivables mean the Hypothecated Identified Receivables less the Escrowed FSI Receivables

(d) IFIN Escrow : (d) "IFIN Escrow FSI Receivables" shall FSI Receivables mean 75% of the Escrow FSI Receivables which shall be forthwith transferred from the FSI Escrow Account into a sub-account of the FSI Escrow Account ("IFIN FSI Sub-

Account")

(e) Segregated : (e) "Segregated Escrow FSI Receivables"

Escrow FSI shall mean 25% of the Escrow FSI Receivables Receivables which shall be forthwith transferred from the FSI Escrow Account into a sub-account of the FSI Escrow Account "Segregated FSI Sub-

Account"

56. Clause-10 deals with the 'Purpose of the Facility', which provided

that Facility would be utilized for any of the specific purpose as

mentioned therein. Clause-10 is as follows:

"10. Purpose of the : The funds provided under the Facility Facility would be utilized for any of the below

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 51 specified purposes:

(a) Project Development Expenses in APIL's various under construction real estate projects (b) Long Term Working Capital (c) Extending loan & advance to subsidiaries/ associates including loan & advance to AAIL(PMDO borrower) towards implementation of trunk infrastructure at Lucknow township (Phase II) as envisaged by PMDO pending disbursement of proposed PMDO loan of Rs. 3210 mn (d) General Corporate purposes

The Borrower shall provide a Statutory Auditor's Certificate confirming the end-use of funds within 30 days of disbursement(s)."

57. Clause-15 delas with 'Sources of Repayment', which is as follows:

"15. Sources of : The Facility shall be repaid from the Repayment below mentioned illustrative sources:

(a) Receivables from Hypothecated Identified Receivables

(b) Cash flows from sale from the properties mortgaged with IFIN

(c) Disbursement under sanction of Rs.3,210 Mn from PMDO/PNB to the extent the Facility is utilised towards extending loan & advance to PMDO borrower (AAIL) towards implementation of trunk infrastructure at Lucknow township (Phase II) as envisaged by PMDO / PNB

(d) Revenues/ operating cash flows of the Borrower

(e) Promoter's Equity outright sale proceeds

(f) Refinancing

(g) Fresh infusion of equity/ quasi equity into the Borrower/ divestment proceeds"

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 52

58. Clause-21 deals with 'Security'. Clause-21 specifically refers to

exclusive mortgage of fully developed plots situated at Mother City,

Lucknow; Hypothecated receivables of Lucknow plots and first exclusive

mortgage built up properties located at Lucknow/ Jaipur/ Jodhpur/

Ajmer. Clause-21 is as follows:

"21. Security : The Facility shall be secured by the following:

(a) (1) First exclusive mortgage of fully developed Plots (ready to construct plots by the prospective buyers) situated at Mother city, Lucknow (the "Lucknow Plots") Valuation/ Title Investigation to IFIN satisfaction by IFIN appointed Valuer/s & Legal Counsel.

Details/ Title Deeds to be provided immediately for expeditious processing (2) First exclusive hypothecation of receivables from the Lucknow Plots ("Hypothecated Receivables of Lucknow Plots"). Irrevocable POA from Borrower for the Hypothecated Receivables of the Lucknow Plots

(b) First exclusive hypothecation of Hypothecated Identified Receivables Irrevocable POA from Borrower for the Hypothecated Identified Receivables

(c) (1) First exclusive mortgage built up properties (ready to move in status) (located at Lucknow/ Jaipur/ Jodhpur/ Ajmer) ("Built Up Properties") (2) First exclusive hypothecation of recievables from Built Up Properties ("Hypothecated Built Up Properties Receivables").

Irrevocable POA from Borrower for the Hypothecated Built Up Properties Receivables

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 53 (d) Corporate Guarantee of all land owning companies other than the Borrower, if any, providing immovable property as security (e) Personal Guarantee of Mr. Sushil Ansal and Mr. Pranav Ansal (f) Demand Promissory note in favour of the Lender. The Promissory note shall bear the common seal of the Borrower duly supported by a resolution of the Board of Directors of the Borrower (g) ECS mandate for Principal & Interest (including PDC for one month interest and Principal)"

59. Along with terms and conditions, Annexure-A was also annexed,

which was "Details of Hypothecated Identified Receivables" in two parts,

which included residential and commercial assets noted therein. Total

balance receivables against CD as contained in Annexure-A is Rs.564.33

crores.

60. The various terms and conditions in the Loan Agreement being

repetition of terms and conditions as noted above, it needs no repetition.

61. Similarly, second Loan Facility dated 26.10.2016 of Rs.100 crores

was issued, which also contained the terms and conditions. Clause 6 of

the PMDO Facility is in following manner:

"6. PMDO Facility : PMDO I : Rs 3930 mn funding facilities extended by Consortium of Bankers under "Pooled Municipal Debt Obligation" (`PMDO") to Ansal API Infrastructure Ltd ("AAIL") towards development of trunk infrastructure at Mother City, being part of township located at Lucknow ("Mother City, Lucknow") which is being developed

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 54 pursuant to the terms of the [development agreements for the Mother City, Lucknow project] ("DA I/II/III")] PMDO II : Proposed term loan of up to Rs. 1,500 mn to AAIL from PMDO lenders towards development of trunk infrastructure for Phase II of the township located at Lucknow ("Mother City Extension, Lucknow"), which is being developed pursuant to the terms of the [development agreements for the said the Mother City Extension, Lucknow project] ("DA IV/V") of the Lucknow Township"

62. Clause-7 refers to 'Hypothecated & Escrowed Identified Receivables

- Mother City, Lucknow and Hypothecated & Escrowed Identified

Receivables- Mother City Extension, which is as follows:

"7. (A) Hypothecated : (a) "Hypothecated & Escrowed & Escrowed Identified Receivables -- Mother Identified City" shall mean entire Receivables -- receivables (present and future) Mother City from FSI/Group Housing / Commercial / Plots / Villas/ any other development (unless specifically excluded by IFIN) at Mother City, Lucknow proposed to be sold/ already sold by APIL to various buyers, which Mother City, Lucknow is being developed pursuant to the terms of DA I/II/III along with residual cashflows from the said Mother City, Lucknow project, for part construction of which funding has also been availed from cert3.!tiei,, !er lenders (to be specified by the Borrower in writing with details, which lenders may be excluded upfront by IFIN). A summary of the Hypothecated & Escrowed Identified Receivables -Mother City is provided below:

Category Balance Total

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 55 (Rs.mn) Receivables Sold Unsold FSI --Group 3,790 4,320 8,110 Housing --Commercial 1,870 7,320 9,190 Plots 640 2,370 3,010 Villas/Floors 820 3,310 4,120 Group 1,310 4,210 5,520 Housing Commercial 290 1,470 1,760 Other (Public, 660 2,950 3,610 recreation, etc.) Total 9,370 25,950 35,220

(B) Hypothecated (b) "Hypothecated & Escrowed & Escrowed Identified Receivables - Mother Identified City Extension" shall mean Receivables - entire receivables (present and Mother City future) from FSI/Group Housing Extension / Commercial / Plots / Villas/ any other development (unless specifically excluded by IFIN) at Mother City Extension, Lucknow proposed to be sold/ already sold by APIL to various buyers which are being developed pursuant to the terms of DA wry along with residual cashflows from the said Mother City Extension, Lucknow project, for which part of construction funding is availed from certain other lenders (to be specified by the Borrower in writing with details, who may be excluded upfront by IFIN). A summary of Hypothecated & Escrowed Identified Receivables - Mother City Extension is provided below: Category Balance Total (Rs.mn) Receivables Sold Unsold FSI --Group 1,910 10,400 12,310 Housing --Commercial 120 2,730 2,850 Plots 2,420 4,220 6,640 Villas/Floors 2,430 6,350 8,780 Group 1,680 5,160 6,840 Housing Commercial 30 80 110 Other (Public, 90 6,010 6,100 recreation, etc.) Total 8,690 34,940 43,630

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 56 The Borrower shall provide all the details including the basis of assessment of future receivables, name of the scheme/ FSI buyers, approved plan including FSI/ Total Sqft, lenders details, as applicable, to the satisfaction of IFIN.

63. It is relevant to notice that above Loan Agreement refers to

Development Agreement I, II and III and with regard to Mother City

Extension. The Loan Agreement, thus, has clearly noticed the

Development Agreement, which was entered with Lucknow Development

Authority and the CD. With regard to receivables from Mother City, total

amount of Rs.35,220 million and for Mother City Extension Rs.43,630

million have been mentioned. The security, which was provided in

Clause-21 of the second Agreement clearly mentions for security of plots

and Mother City Extension, Lucknow; Golf Plots etc. The second Loan

Agreement, thus mentions security situated at City of Lucknow only.

64. In pursuance of the Sanction Letter dated 26.10.2016, the Loan

Agreement dated 25.11.2016 was entered with terms and conditions as

noted in the Sanction Letter. The details of securities were mentioned in

the Agreement as noted above.

65. Section 7 application filed by the Financial Institution in Part-V has

given details of security, certificate of registration of charge and other

details. It is useful to notice Part-V Sl. No.1, which is as follows:

1. Particulars of Under the terms of the Sanction Letters security held, if any, read with the Loan Agreements, the the date of its Corporate Debtor had offered the

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 57 creation, its following as security for securing the estimated value as repayment of the Facility Amount:

per the creditor.

A. First exclusive charge in the form of mortgage by deposit of title deeds [attach a copy of a over various properties owned/held certificate of by the Corporate Debtor as per registration of details given in Annexure- A- charge issued by the 27(Colly) registrar of

companies (if the B. First exclusive charge in the form of corporate debtor is a hypothecation over receivables company)] generated from various properties as per details given in Annexure- A-28 (Colly).

C. Corporate Guarantees of the landowning companies associated with the Corporate Debtor as detailed out in Annexure- A-29 (Colly) D. Personal Guarantees of Mr. Sushi! Ansal and Mr. Pranav Ansal, Chairmen of the Corporate Debtor as detailed out in Annexure- A-30 (Colly).

E. Demand Promissory Note for:

a. the amount of Rs.50,00,00,000/-

(Rupees Fifty Crores only) with interest at the rate of 17.5% per annum executed by the Corporate Debtor under the hand of Mr. Ashok Dang and Mr. Kapil Arora.

b. the amount of Rs.100,00,00,000/- (Rupees One Hundred Crores only) with interest at the rate of 17 .5% per annum executed by the Corporate Debtor under the hand of Mr. Ashok Dang and Mr. Kapil Arora.

Copies of the above-mentioned Demand Promissory Notes are annexed herewith as Annexure- A-31 (Colly).

F. Copies of the certificates of registration of the said charges are annexed herewith as Annexure- A-32 (Colly)"

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 58

66. Above pleadings in Part-V Section 7 application mentions in

Annexure A-27, first exclusive charge in the form of mortgage by deposit

of title deeds and first exclusive charge in the form of hypothecation over

receivable generated from various properties as per details given in

Annexure-28, and copies of certificates of registration of the charges as

per details given in Annexure-32. Section-7 application itself provides

details of security and charges created by the parties.

67. It is relevant to notice that a Settlement Agreement was entered

between the CD and IL&FS dated 03.03.2022, under which the CD had

agreed to make total payment of Rs.109,66,00,000/- to the IL&FS. The

Settlement Agreement in Schedule-B mentions "List of Existing Securities

and Security Documents". The securities mentioned at Sl. No.1, 2, 3 and

4 relates to assets at Lucknow and security mentioned at Sl. No.5

mention 27 units in building known as Ansal Royal Plaza, Jodhpur; 54

units in Orchid Plaza and 14 units in Tulip Plaza at Jaipur; Sl. No.6

mentions 59 built up units at Ajmer, Rajasthan; Sl. No.7 mentions

property at Jodhpur, Jaipur, Lucknow and Ajmer; and Sl. No.8 deals with

hypothecation.

68. The relevant terms and conditions of the Sanction Letter and the

Loan Agreements, thus, clearly provided for immovable securities for

repayment of both the loans, in addition to the projects of the CD at City

of Lucknow, U.P., the security was also created with respect to three cities

in the State of Rajasthan i.e. Ajmer, Jodhpur and Jaipur. From

Annexure-A, which has been brought on the record by the CD, as noted

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 59 above, it is clear that apart from different projects at City Lucknow, State

U.P., the CD had projects in the State of Haryana, Mohali (Punjab),

Rajasthan - Ajmer, Jodhpur and Jaipur. There are 93 registered projects

in the City of Lucknow alone. The question, which needs to be answered

is as to whether securities, which have been taken by Financial

Institutions, i.e. IL&FS in the present case has any relevance with respect

to CIRP of a real estate Company. The securities obviously have been

taken by the Financial Institutions to ensure repayment of its loan and

when the CD commits default as per the Loan Agreement, the Financial

Institutions are entitled to take remedy as per the Agreement and recover

its dues by realization as per the insolvency process contemplated under

the IBC. The IBC and CIRP Regulations, do not contain any provision so

as to specify if Financial Institutions has receivable or securities of one or

more projects of the CD in the CIRP, whether the CIRP should confine to

one project of the CD or all projects or to the projects, in which lenders

have receivables and securities.

69. We in the order dated 25.04.2025 passed in these Appeal(s) have

noticed that with respect to the CD, the CIRP has also earlier commenced

at two occasions with respect to projects namely - Fernhill Project,

Gurgaon State of Haryana and Serene Residency Group Housing Project

in the State of UP.

70. With respect of Fernhill Project of the CD, a Section 7 application

was filed by the allottees of Fernhill Project, on which CIRP commenced

against the CD on 16.11.2022, against which order Company Appeal (AT)

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 60 (Ins.) Nos.41, 65 and 77 of 2023 were filed in this Tribunal. This

Tribunal passed an order on 13.01.2023 confining the order of the

Adjudicating Authority admitting Section 7 application to 'Fernhill Project'

situated at District Gurgaon, which has been noticed in the order dated

04.03.2024 in the above Company Appeal(s). Paragraph 2 of the order

dated 04.03.2024 is as follows:

"2. These appeals have been filed against the order dated 16.11.2022 passed in Section 7 Application by which on an Application filed by 125 allottees (Financial Creditors), the Adjudicating Authority admitted Section 7 Application. The allottees, who filed the Application, were allottees of one Projects the 'Fernhill Project'. This Tribunal entertained the appeal and passed following interim order dated 13.01.2023:

"O R D E R

13.01.2023: Learned counsel for the Appellant submits that the Adjudicating Authority had on an application under Section 7 by the allottees of one project Fernhill situated in Section-91, Gurgaon, Manesar, Haryana has initiated CIRP process against the Corporate Debtor. It is submitted that the Corporate Debtor has several projects and the Appellants are allottees in two projects situated at Lucknow, State of Uttar Pradesh. It is submitted that the Applicant allottees being only concerned with Fernhill project CIRP ought to have been confined to Fernhill project only and projects in other States ought not to have been included. Submission needs scrutiny.

Issue notice. Requisites alongwith process fee be filed within three days. Respondents may file Reply within two weeks. Rejoinder be filed within two weeks thereafter.

List this Appeal on 28.02.2023.

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 61 We provide that the order of Adjudicating Authority admitting Section 7 application shall confine to 'Fernhill project' situated at District Gurgaon."

71. The Appeal(s) were filed challenging the order dated 16.11.2022 by

the allottees of different projects of the CD, which projects were situated

in different Cities. The allottees who had initiated the CIRP against the

CD, relating to Fernhill Project, also had agreed that CIRP initiated vide

order dated 16.11.2022 be confined to only Fernhill Project. The order of

the Adjudicating Authority was modified by this Tribunal by directing that

the same be confined to only one project, i.e. Fernhill. In Paragraph-3,

following was directed:

"3. All these appeals by the allottees, who have different projects of the Corporate Debtor and by initiation of CIRP they have been aggrieved. The Projects of the Appellants are situated at different cities and the 'Fernhill' project is situated at Manesar, Haryana. Learned Counsel for the Appellants as well as the learned Counsel for the allottees, who are Applicant, are agreeable that the CIRP should be confined only to 'Fernhill Project'. There being no dispute between the parties that CIRP should be confined to Fernhill Project, we modify the impugned order dated 16.11.2022 only to the extent that the CIRP admitted against the Corporate Debtor shall confine only to one project i.e. "The Fernhill" situated at "Revenue Estate of Village Mewka, TehsilManesar, Sector-91, District- Gurgaon, Haryana"

72. The Appeal was disposed of by this Tribunal accordingly.

73. Another CIRP commenced against the CD with respect to 'Serene

Residency Group Housing' Project, situated at Greater Noida, U.P. and

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 62 that CIRP was also confined to the said Project only, not affecting the

other Projects.

74. The above facts indicate that there are two instances with respect to

CIRP against the CD, where the CIRP was confined to the respective

projects only and the CIRP was not directed to be proceeded with respect

to all projects of the CD.

75. We have noticed in detail the securities, which have been provided

for in the Loan Agreements between the CD and IL&FS. For the purpose

of consideration as to whether the CIRP, which has been initiated by the

impugned order dated 25.02.2025 should be confined to the assets which

are included in the securities provided by the CD or it should engulf all

Projects of the CD, the same shall be considered hereinafter.

Question Nos.III to VI

All the above questions being inter-related, are being taken

together.

76. We have noticed above that on two occasions, where the CIRP

commenced against the CD, i.e. Ansal Properties and Infrastructure Ltd.,

the CIRP was confined to two projects respectively, since the CIRP was

initiated by the Financial Creditors in a class relating to concerned

projects. We have noticed above the securities and receivables, which are

contemplated in Loan Agreements between the parties relate to only

projects of the CD situated at City of Lucknow in the State of U.P. and

three Cities in the State of Rajasthan, i.e. Ajmer, Jodhpur and Jaipur.

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 63 The details of assets on all securities and mortgages created in the above

Cities have been noticed above. The present is a case where the CD was

implementing the Hi-Tech Township Project under the Policy promulgated

by the State of U.P. in different cities of the State of U.P. Lucknow is one

of the City, which is referred in the Loan Agreement as Mother City, where

the CD was carrying out development work as per Development

Agreements-I to V, when Loan Facility was extended by IL&FS, the IL&FS

was well aware that CD has been proposed under PMDO-I Rs.3930

million and under PMDO-II Rs.3210 million. The Financial Creditors,

thus, was fully conscious of earlier facilities extended by Consortium of

Bankers to the CD and have provided in detail the securities, which

include the mortgaged assets, receivables, hypothecated and identifiable

receivables. It is further relevant to notice that the Sanction Letter dated

16.02.2016 in Annexure-A notices the hypothecated, identified and

receivables from residential and commercial units and total balance

amount receivable from the CD was mentioned at Rs.564.33 crores. In

second Loan Facility the receivables and assets in the Mother City

Lucknow and Mother City Extension Lucknow were also noticed. Thus,

Financial Institution had taken care of repayment of dues.

77. We are conscious that CIRP proceedings are not proceedings of

repayment of dues or recovery of dues by the Financial Institutions and

the object is to revive and rehabilitate the CD. When CIRP has

commenced against a real estate project, the resolution, rehabilitation

and revival of the project become necessary to safeguard interest of

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 64 stakeholders, specially the allottees, who have been allotted residential/

commercial plots by the CD. In the present case, the CD, who has been

developing different projects at the City of Lucknow and other cities, has

allotted units to different Homebuyers and allottees of residential and

commercial assets. For resolution of a real estate project, the interest of

the Homebuyers has to be taken care and the Courts have always taken

steps to protect the interests of Homebuyers. We in this context refer to a

recent judgment of the Hon'ble Supreme Court in Mansi Brar Fernandes

vs. Shubha Sharma and Anr. - Civil Appeal No.3826 of 2020 and

other Appeals decided on 12.09.2025. The Hon'ble Supreme Court in the

above case was also considering an Appeal arising out of CIRP of a real

estate project. In Paragraph 15.2, the Hon'ble Supreme Court has

reiterated certain principles, which notices that IBC is a Forum of last

resort, intended to secure revival and completion of viable projects, not to

serve as a debt recovery mechanism. In Paragraph-15.2, the Hon'ble

Supreme Court laid down following:

"15.2. In this necessary in this backdrop to reiterate certain settled principles:

• RERA remains the primary forum for redressal of homebuyers' grievances;

• The IBC is a forum of last resort, intended to secure revival and completion of viable projects, not to serve as a debt recovery mechanism; and

• Consumer forums should confine themselves to adjudicating individual service deficiencies, thereby avoiding conflicting or overlapping orders across multiple fora."

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 65

78. In paragraph 15.5, the Hon'ble Supreme Court further observed

that a balance judicial approach will have far-reaching benefits. In

Paragraph-15.5, following was observed:

"15.5. A balanced judicial approach in this regard will have far- reaching benefits: protecting homebuyers, restoring confidence in the real estate market, and encouraging reputed business houses and conglomerates to participate in residential development. In taking this approach, this Court seeks to contribute towards cleansing and strengthening a core economic sector that sustains millions of livelihoods in both the organised and unorganised economy and touches the lives of people at their most fundamental level."

79. The Hon'ble Supreme Court in the above case has also observed

that right to shelter is an integral part of the right to life under Article 21

of the Constitution. In Paragraph-20, 20.1 to 20.5 following have been

laid down:

"RIGHT TO SHELTER AS A FUNDAMENTAL RIGHT:

CONSTITUTIONAL OBLIGATION OF THE STATE TO PROTECT HOMEBUYERS

20. This Court has, in a catena of decisions, consistently held and reaffirmed that the Right to Shelter is an integral part of the right to life under Article 21 of the Constitution. This recognition casts a corresponding duty on the State to ensure access to adequate housing, particularly for weaker sections. Indeed, various welfare schemes such as the Pradhan Mantri Awas Yojana (PMAY) have been initiated by the Government to provide affordable housing. 20.1. A home is not merely a roof over one's head; it is a reflection of one's hopes and dreams - a safe space for a family, a refuge from the worries of the world. With India rapidly industrialising and the rural-to-urban mobility proceeding at lightening pace, the demand for housing has risen sharply.

20.2. Yet, the plight of tax-paying middle-class citizens paints a disheartening picture. Having invested their lifelong savings in pursuit of a home, many are compelled to shoulder a double burden - servicing EMIs on one hand, and paying rent on the other

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 66

- only to find their "dream home" reduced to an unfinished building. In some cases, construction has not even commenced despite full or substantial payment. An average homebuyer may be a teacher, lawyer, doctor, IT professional, or a government employee, who has poured his or her hard-earned money into the pockets of a developer. For such individuals, a stable roof over their family's head is all they desire. The anxiety of not having a home despite paying a fortune is bound to take a serious toll on health, productivity, and dignity.

20.3. It is therefore imperative that the life savings of a common person culminate in timely possession of their promised home. Article 21 would mandate nothing less. In Samatha v. State of A.P.21, this Court reiterated that the right to social and economic justice as well as the right to shelter are fundamental rights encompassed within the ambit of the right to life. Similarly, in Chameli Singh v. State of U.P.22 , this Court observed:

"Shelter for a human being, therefore, is not a mere protection of his life and limb. It is home where he has opportunities to grow physically, mentally, intellectually and spiritually. Right to shelter, therefore, includes adequate living space, safe and decent structure, clean and decent surroundings, sufficient light, pure air and water, electricity, sanitation and other civic amenities like roads etc. so as to have easy access to his daily avocation. The right to shelter, therefore, does not mean a mere right to a roof over one's head but right to all the infrastructure necessary to enable them to live and develop as a human being. Right to shelter when used as an essential requisite to the right to live should be deemed to have been guaranteed as a fundamental right. As is enjoined in the Directive Principles, the State should be deemed to be under an obligation to secure it for its citizens, of course subject to its economic budgeting. In a democratic society as a member of the organised civic community one should have permanent shelter so as to physically, mentally and intellectually equip oneself to improve his excellence as a useful citizen as enjoined in the Fundamental Duties and to be a useful citizen and equal participant in democracy. The ultimate object of making a man equipped with a right to dignity of person and equality of status is to enable him to develop himself into a cultured being. Want of decent residence, therefore, frustrates the very object of the constitutional animation of right to equality, economic justice, fundamental right to residence, dignity of person and right to live itself."

20.4. Thus, it would be thoroughly erroneous to treat home-buying as a mere commercial transaction, or worse, to reduce housing to the status of speculative instruments such as stocks, debentures, futures, or options through creative contractual devices. Housing is neither a luxury nor a commodity for speculation - it is a fundamental human need. The right to secure, peaceful, and timely

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 67 possession of one's home is therefore a facet of the fundamental right to shelter enshrined under Article 2123.

20.5. The State carries a constitutional obligation to create and strictly enforce a framework wherein no developer is permitted to defraud or exploit homebuyers. Ensuring timely project completion must be a cornerstone of India's urban policy. Equally, the State must proactively address the menace of a parallel cash economy and speculative practices in the real estate market, which artificially inflate housing costs and enable "trigger-happy"

investors seeking easy exits to jeopardize the interests of genuine end-users"

80. The Hon'ble Supreme Court in its conclusion issued various

directions. The directions issued at Paragraph-21.2(5) and (6), which are

relevant in the present case, are as follows:

"21.2(5) Since real estate is the second largest sector in IBC proceedings, IBBI24 , in consultation with RERA authorities, shall constitute a council to frame specific guidelines for insolvency proceedings in real estate, including timelines for project-wise CIRP, and safeguards for allottees.

(6) Resolution of real estate insolvency should, as a rule, proceed on a project specific basis rather than the entire corporate debtor, unless circumstances justify otherwise. This would protect solvent projects and genuine homebuyers from collateral prejudice. IBBI shall also devise a mechanism to enable handover of possession to willing allottees where substantial units in a project are complete."

81. What Hon'ble Supreme Court has held in the above case is that

resolution of real estate insolvency should, as a rule, proceed on a project

specific basis rather than the entire CD, unless circumstances justify

otherwise. This would protect solvent projects and genuine homebuyers

from collateral prejudice.

82. We also need to notice certain provisions of Insolvency and

Bankruptcy Board of India (Insolvency Resolution Process for Corporate

Persons) Regulations, 2016 ("CIRP Regulations"), which deals with the

process for resolution of a CD, with respect to resolution of a real estate

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 68 company, which has several real estate projects, few amendments have

been made in the CIRP Regulations, which need to be noticed. The CIRP

Regulations as originally framed did not envisage any real estate project

resolution. In Regulation 36A for the first time by amendment in

Regulation 36A(1), a clarification has been added with effect from

15.02.2024. Regulation 36A, sub-regulation (1) with clarification provides

as follows:

"36A(1) The resolution professional shall publish brief particulars of the invitation for expression of interest in Form G of the 123[Schedule-I] at the earliest, 124[not later than sixtieth day]from the insolvency commencement date, from interested and eligible prospective resolution applicants to submit resolution plans. [Clarification: The resolution professional after the approval of the committee may invite a resolution plan for each real estate project or group of projects of the corporate debtor.]

83. The above provision is an enabling provision that empowers the RP

after approval of CoC, to invite Resolution Plans for each real estate

project or projects of the CD. The above Regulation thus, clearly

contemplates the steps to be undertaken by the RP when there is more

than one real estate project of the CD. Certain further amendments have

been made in the Regulation with effect from 03.02.2025, which also

needs to be noticed. Regulation 4E has been added with effect from

03.02.2025, which is as follows:

"4E. Handing over the possession. After obtaining the approval of the committee with not less than sixty-six percent of total votes, the resolution professional shall hand over the possession of the plot, apartment, or building or any instruments agreed to be transferred under the real estate project and facilitate registration, where the allottee has requested for the same and has performed his part under the agreement."

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 69

84. In Regulation 18, sub-regulation (4) has been inserted vide

Notification dated 03.02.2025, which empowers the CoC to invite the

competent authority, i.e. Real Estate (Regulation and Development) Act,

2016. Sub-regulation (4) of Regulation 18 is as follows:

"18(4) Where the corporate debtor has any real estate project, the committee may direct the resolution professional to invite the 'competent authority' as defined in clause (p) of section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016) related to such project to attend such meeting(s) of the committee, as the committee may decide, without voting rights, for providing inputs on matters associated with the development of such project."

85. The above Regulations, even after amendments as noted above,

throw very little light over the complexities and difficulties, which arise in

the resolution of the real estate project, undertaken by a real estate

Company. There have been several precedence of this Tribunal, where

this Tribunal had occasion to consider the resolution of a real estate

project. The judgment of this Tribunal in Company Appeal (AT) (Ins.)

No. 926 of 2019 - Flat Buyers Association Winter Hills - 77,

Gurgaon vs. Umang Realtech Pvt. Ltd. through IRP & Ors. is one of

such cases, where this Tribunal has noticed the problems in following

certain process in the cases of infrastructure companies (for allottees). In

Paragraphs 9 and 10 of the judgment, following observations have been

made:

"9. In terms of the 'I&B Code' and the decisions of the Hon'ble Supreme Court, the 'Resolution Plan' must maximise the assets of the Corporate Debtor and balance the stakeholders (secured and unsecured creditors- Financial Creditors/ Operational Creditors).

10. The Infrastructure which is constructed for the allottees by Corporate Debtor (Infrastructure Company) is an asset of the Corporate Debtor. The assets of the Corporate Debtor as per the Code cannot be distributed, which are secured for 'Secured

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 70 Creditors'. On the contrary, allottees (Homebuyers) who are 'Unsecured Creditors', the assets of the Corporate Debtor which is the Infrastructure, is to be transferred in their favour ('Unsecured Creditors') and not to the 'Secured Creditors' such as Financial Institutions/ Banks/ NBFCs."

86. The Hon'ble Supreme Court in the above case has also noticed the

concept of "reverse corporate insolvency resolution process". This

Tribunal in the above judgment, which was delivered on 04.02.2020 had

observed that in the CIRP against a real estate, if allottees (Financial

Creditors) or Financial Institutions are of one project initiated CIRP

against the CD, it be confined to the particular project and it cannot affect

other projects of the real estate company in other places. In Paragraph 21

of the judgment, following was laid down:

"21. In Corporate Insolvency Resolution Process against a real estate, if allottees (Financial Creditors) or Financial Institutions/Banks (Other Financial Creditors) or Operational Creditors of one project initiated Corporate Insolvency Resolution Process against the Corporate Debtor (real estate company), it is confined to the particular project, it cannot affect any other project(s) of the same real estate company (Corporate Debtor) in other places where separate plan(s) are approved by different authorities, land and its owner may be different and mainly the allottees (financial creditors), financial institutions (financial creditors, operational creditors are different for such separate project. Therefore, all the asset of the company (Corporate Debtor) are not to be maximized. The asset of the company (Corporate Debtor - real estate) of that particular project is to be maximized for balancing the creditors such as allottees, financial institutions and operational creditors of that particular project. Corporate Insolvency Resolution Process should be project basis, as per approved plan by the Competent Authority. Any other allottees (financial creditors) or financial institutions/ banks (other financial creditors) or operational creditors of other project cannot file a claim before the Interim Resolution Professional of other project and such claim cannot be entertained.

So, we hold that Corporate Insolvency Resolution Process against a real estate company (Corporate Debtor) is limited to a project as per approved plan by the Competent Authority and not other projects which are separate at other places for which separate plans approved. For example - in this case the Winter Hill

- 77 Gurgaon Project of the 'Corporate Debtor' has been place of

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 71 Corporate Insolvency Resolution Process. If the same real estate company (Corporate Debtor herein) has any other project in another town such as Delhi or Kerala or Mumbai, they cannot be clubbed together nor the asset of the Corporate Debtor (Company) for such other projects can be maximised."

87. This Tribunal in the above case has held that "if the same real

estate company (Corporate Debtor herein) has any other project in another

town such as Delhi or Kerala or Mumbai, they cannot be clubbed together

nor the asset of the Corporate Debtor (Company) for such other projects can

be maximized". The above judgment of this Tribunal, thus, has clearly

observed that when the CIRP by allottees or Financial Institutions relates

to one project, it should be confined to that project. The above

proposition, thus, is fully supported by precedence of this Tribunal,

hence, we have no hesitation to hold that when CIRP initiated by allottees

or Financial Institutions, under Section 7 relates to one project, the CIRP

has to be confined to the said project and cannot take into its fold, the

other real estate projects, situated in other cities or other States.

88. We have noticed above that two Loan Facilities extended by the

IL&FS to the CD. The purpose of the Loan Facilities as noted above

provided that it would be utilized for any of the specific purpose as

mentioned therein from (a) to (d). Clause (a) provided for project

development expenses in APIL's various under construction real estate

projects and Clause (c) provides for expanding loan & advances to

subsidiaries/ associates including loan and advances to CD towards

implementation of trunk infrastructure at Lucknow township and general

corporate purpose. The Facility, thus specifically did not limit the

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 72 utilization for any one project. When source of repayment as provided in

the Sanctioned Letter and the Loan Agreement confine to specific assets

mortgaged and charge, we are of the view that in the CIRP, only those

assets/ projects, which had charge, had to be resolved. It is the CD's

case that majority of funds received from IL&FS were utilized for project

Hi-Tech Township project at Lucknow. Be that as it may, when the

securities and receivables are specified in the Loan Agreement, we are of

the view that the CIRP has to be confined to only those projects, which

form part of securities/ receivables and extending the CIRP to projects,

which are not contemplated or referred to in the Loan Agreements, is

uncalled for. The CD and IL&Fs are well aware about all the Hi-Tech

Township projects and PMDO Facilities, which were undertaken. We have

noticed Clause 21 of the terms and conditions of Sanctioned Letter dated

16.02.2016, which was the clause dealing with security. Security was

clearly provided for Lucknow Plots; hypothecated receivables of Lucknow

Plots, hypothecated identified receivables and first exclusive mortgage

built up properties at Lucknow, Ajmer, Jodhpur and Jaipur. For ready

reference, we may refer to Clause 21 of Sanctioned Letter dated

16.02.2016, which is as follows:

"21. Security : The Facility shall be secured by the following:

(a) (1) First exclusive mortgage of fully developed Plots (ready to construct plots by the prospective buyers) situated at Mother city, Lucknow (the "Lucknow Plots") Valuation/ Title Investigation to IFIN satisfaction by IFIN appointed Valuer/s & Legal Counsel. Details/ Title Deeds to be provided immediately for expeditious

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 73 processing (2) First exclusive hypothecation of receivables from the Lucknow Plots ("Hypothecated Receivables of Lucknow Plots"). Irrevocable POA from Borrower for the Hypothecated Receivables of the Lucknow Plots

(b) First exclusive hypothecation of Hypothecated Identified Receivables Irrevocable POA from Borrower for the Hypothecated Identified Receivables

(c) (1) First exclusive mortgage built up properties (ready to move in status) (located at Lucknow/ Jaipur/ Jodhpur/ Ajmer) ("Built Up Properties") (2) First exclusive hypothecation of receivables from Built Up Properties ("Hypothecated Built Up Properties Receivables"). Irrevocable POA from Borrower for the Hypothecated Built Up Properties Receivables

(d) Corporate Guarantee of all land owning companies other than the Borrower, if any, providing immovable property as security

(e) Personal Guarantee of Mr. Sushil Ansal and Mr. Pranav Ansal

(f) Demand Promissory note in favour of the Lender. The Promissory note shall bear the common seal of the Borrower duly supported by a resolution of the Board of Directors of the Borrower

(g) ECS mandate for Principal & Interest (including PDC for one month interest and Principal)"

89. We have also noticed subsequent Sanction Letter dated 26.10.2016

by which Term Loan Facility of Rs.100 crores was advanced. The security

under the said Sanction Letter was provided under Clause 21, which is to

the following effect:

"21. Security : The Facility and all amounts due or payable in relation thereto shall be secured by the

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 74 following:

1. (a) First exclusive mortgage of the identified FSI Plots (commercial as well as residential) situated at Mother City, Lucknow as well as Mother City Extension, Lucknow (the "Lucknow FSI Plots"). A security cover of 2.5x (being the net security cover after deducting 25% cash flows to be set aside towards PMDO repayment in case of cash flows from Lucknow FSI Plots forming part of Mother City, Lucknow), to be maintained from mortgage of "Lucknow FSI Plots"

(b) First exclusive hypothecation of receivables from the Lucknow FSI Plots ("Hypothecated Receivables of Lucknow FSI Plots"). Irrevocable POA shall be provided by the Borrower for the Hypothecated Receivables of the Lucknow FSI Plots

2. (a) First exclusive mortgage over identified Golf Plots at Mother City, Lucknow ("Lucknow Golf Plots"). A security cover of 0.5x (being the net security cover after deducting 25% cash flows to be set aside towards PMDO repayment) to be maintained from mortgaged of Lucknow Golf Plots.

(b) First exclusive hypothecation of receivables from sale of mortgaged Lucknow Golf Plots ("Hypothecated Lucknow Golf Plots Receivables").

Irrevocable POA shall be provided by Borrower for the Hypothecated Lucknow Gold Plots Registration Valuation/ Title Investigation shall be carried out to IFIN satisfaction by IFIN appointed Valuer/s & Legal Counsel.

The Borrower shall provide all required details/ documents immediately for Title investigation and valuation.

3. First Exclusive Hypothecation and escrow of 75% of Hypothecated & Escrowed Identified Receivables --

Mother City and 100% Hypothecated & Escrowed Identified Receivables --

Mother City Extension, as specified in Clause 7. Provided that in relation to the 75% of Hypothecated & Escrowed

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 75 Identified Receivables -- Mother City received/ receivable from the commercial and group housing units forming part of Mother City, Lucknow, the aforesaid charge shall be shared on a pari passu basis with charge created in favour of IFIN for securing the existing facility of Rs. 500 mn (Rupees Five Hundred Million) ("IFIN Existing Facility") provided by IFIN to APIL pursuant to a Facility Agreement dated Mar 18, 2016

4. Corporate Guarantee of all land-owning companies other than the Borrower, if any, providing immovable property as security

5. Personal Guarantee of Mr. Sushil Ansal and Mr. Pranav Ansal

6. Demand Promissory note in favour of the Lender. The Promissory note shall bear the common seal of the Borrower duly supported by a resolution of the Board of Directors of the Borrower

7. ECS/NACH mandate for Principal & Interest (including PDC for one month interest and Principal)"

90. The above security indicate that securities were only with respect to

Mother City and Mother City Extension, Lucknow and mortgage of Plots

and hypothecated & escrowed identified receivables from Mother City and

Mother City Extension. The above security did not cover any other

projects, except the projects situated at Lucknow.

91. We may at this juncture also notice another order of this Tribunal

dated 10.06.2022 in Company Appeal (AT) (Ins.) No.406 of 2022 - Ram

Kishor Arora Suspended Director of M/s Supertech Ltd. vs. Union

Bank of India & Anr. In the above case, CIRP commenced against M/s

Supertech Ltd., a real estate company by an order dated 25.03.2022.

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 76 Supertech has large number of real estate projects. In the Appeal filed by

Promoters, this Tribunal vide order dated 10.06.2022 issued various

directions regarding project wise insolvency resolution of the CD. A

direction was issued to constitute a Committee with respect to only one

project Eco Village II and with respect to other projects, direction was

issued for project wise resolution. Challenging the order dated

10.06.2022 passed by this Tribunal, Civil Appeal No.1925 of 2023 was

filed by Financial Institution namely - Indiabulls Asset Reconstruction

Company Ltd. The Hon'ble Supreme Court in the above case examined

the challenge and at that stage did not interfere with the directions to

proceed with the project-wise resolution. Paragraphs 21 to 24 of the

order of this Tribunal dated 10.06.2022 are as follows:

"21. We are conscious of the fact that 'CIRP' has been initiated against the Corporate Debtor. 'CIRP' has commenced against all the projects of the Corporate Debtor. 'CIRP' encompasses all the assets of the Corporate Debtor including all Bank Accounts. The IRP has already been appointed and has taken steps by informing all concerned including Banks to add the name of IRP for operation of the Account. The Learned Counsel for the Appellant made submissions and also filed an I.A. No. 1468 of 2022 by which Resolution cum Settlement Proposal has been submitted by the Management with an object to carry out the construction of all the projects.

22. As noted above, the consequence of 'CIRP' is that all assets of the Corporate Debtor come in the control and management of the IRP. All bank accounts are to be operated with the counter signature of the IRP. No amount from any account can be withdrawn without the counter signature and permission of the IRP. IRP under the IBC has responsibility to run the Corporate Debtor as a going concern. Further when Promoters are ready to extend all cooperation with all its staffs and employees to the IRP, we see no reason for not to direct the IRP to proceed with construction of all the projects under the overall supervision and control of the IRP. We by an Interim Order dated 12th April, 2022 directed not to constitute the 'CoC' which Interim Order is continuing as on date.

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 77

23. In the facts of the present case and keeping in view the submissions raised by the Learned Counsel for the parties, we are of the view that in 'CIRP' Process, Project-Wise Resolution to be started as a test to find out the success of such Resolution. Keeping an eye regarding construction and completion of the projects, we at present, are of the view that Interim Order dated 12th April, 2022 staying the constitution of CoC be modified to the extent that CoC be constituted for the Eco Village II Project only with all Financial Creditors including Financial Creditors/Banks/Home Buyers. The Committee of Creditors of Eco Village II Project shall start process for Resolution of Eco Village II Project. The IRP shall separate the claims received with regard to the Eco Village II Project and prepare an 'Information Memorandum' accordingly and proceed for meeting of the CoC as per the Code. It is further directed that even for Eco Village II Project, the IRP shall carry the Project and continue the project as ongoing project by taking all assistance from the ex-management, employees, workmen etc. We however make it clear that other projects apart from the Eco Village II Project shall proceed as ongoing project basis under the overall supervision of the IRP. IRP in his report stated that with regard to the projects, there are separate accounts as per 'RERA' Guidelines. Detail account of all the inflow and outflow with regard to each project shall be separately maintained as per the 'RERA' Guidelines. 70% of the amount received with regard to the project shall be utilized for construction purpose only with regard to the disbursement of rest 30 % amount, we shall issue appropriate direction after receiving further Status Report and after hearing all concern subsequently.

24. The Promoters of the Corporate Debtor has submitted that they shall arrange for Interim Finance to support the ongoing construction of the different projects by arranging finances as submitted in their Settlement cum Resolution Plan. Annexure 3 to the I.A. No. 1468 of 2022, with an object to complete the projects and clear the outstanding of all Financial Institutions including the Financial Creditors on the basis of 100% ledger balance and also payment to the Operational Creditor. The pendency of this proceeding shall in no manner hinder the Appellant to approach the Financial Creditors for entering into Settlement with the Financial Creditors. With regard to the disbursement to the Financial Creditors, out of 30% of the amount, we shall issue necessary direction after receiving the status report and receiving the progress of the projects."

92. This Tribunal in the above case by subsequent order dated

12.12.2024 directed for handing over several projects of the CD to NBCC

for completing the construction, against which Appeal was again filed in

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 78 the Hon'ble Supreme Court, where the Hon'ble Supreme Court has

entertained the Appeal and the Appeal(s) are still pending.

93. We are of the view that when securities, which were given by the CD

for repayment of the term loan given by the IL&FS are confined to only

few projects, the CIRP initiated by the impugned order, cannot engulf all

the projects of the CD, which are in no manner affected by financial

facilities extended by the IL&FS to the CD.

94. The other projects apart from projects, which were noticed and

dealt with in the Loan Agreements between the parties, cannot be affected

at the instance of the IL&FS in the CIRP against the CD. As noted above,

the Loan Agreements itself have noticed that projects of the CD, which are

in different parts of the country. The securities as noticed above are

confined to assets of the CD at Mother City Lucknow and three Cities in

the State of Rajasthan. The Financial Institution and the CD having

noticed in the Agreements that projects of the CD spread over entire

country and assets of only few projects having been referred to and relied

on by the Financial Institutions for its repayment and securities, we are of

the view that CIRP initiated by the impugned order should be confined to

the projects, which are referred to as securities and repayment. Including

other projects will cause hardship to the stakeholders of different projects,

which are not connected or concerned with the CIRP projects of the CD,

which are subject matter of the Loan Agreements.

95. In view of our foregoing discussions and conclusions, we answer

Question Nos.III to VI in following manner:

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 79 95.1. The purpose of the Loan Facility of Rs.50 crores and Rs.100 crores

extended by the IL&FS was for utilizing the funds for any of the specified

purpose [(a) to (d)] as noted in the Sanction Letter. The securities given

by the CD in two loans, are securities of the projects of the CD at Mother

City and Mother City Extension at Lucknow and the three assets situated

at Ajmer, Jodhpur and Jaipur in the State of Rajasthan, as noted in the

Sanction Letter dated 16.02.2016 and the securities, thus were confined

to only few of the projects of the CD and not all the projects of the CD as

noted above.

95.2. Answer to Question No.III - The CIRP initiated and the

moratorium imposed vide order dated 25.02.2025 is to extend to only the

projects of the CD, which are referred to and relied in the Loan

Agreements in both the Loan Facilities, as noted above and the

moratorium cannot extend to other projects of the CD situated in different

cities of the State of UP (except Mother City Lucknow Projects) and other

States, i.e. States of Haryana and Punjab (except assets mentioned in City

of Ajmer, Jaipur and Jodhpur in the State of Rajasthan).

95.3. Answer to Question No.IV - The Adjudicating Authority ought to

have adverted to the fact that CD is running several real estate projects in

different Cities of the U.P. and other States of the country. Before the

Adjudicating Authority, the above facts were brought and clearly

mentioned in the reply filed by the CD in Section 7 application. In

Paragraph 18 of the reply, the CD has pleaded following:

"18.That the Respondent is executing multiple projects across diverse locations. The initiation of CIRP would paralyze these projects and result in destruction of value for creditors and other

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 80 stakeholders. It is respectfully submitted that the Respondent's operations are integral to ensuring that creditor value is preserved, and that CIRP, in this instance, would be counterproductive to the interests of all stakeholders."

95.4. We may further notice that Homebuyer - Gagan Tandon and others

filed an Intervention Application before the Adjudicating Authority, which

Intervention Application was rejected by the order passed on the same

date, i.e. 25.02.2025. In the order rejecting the Intervention Application,

the Adjudicating Authority has noticed the plea raised by the Homebuyers

regarding several projects of the CD. Thus, before the Adjudicating

Authority, the different projects of the CD had been noticed by the

Adjudicating Authority itself. It is useful to notice Paragraphs 3 to 7 of

the order dated 25.02.2025, rejecting the Intervention Petition:

"3. We have heard the Learned Counsel appearing for the Applicants and perused the documents on record. In adjudicating upon the matter at hand, we are of the view that the Applicants, claiming to be homebuyers in the real estate project developed by the Corporate Debtor, seek intervention in the present proceedings under Section 7 of the Insolvency and Bankruptcy Code, 2016 ("IBC"). It is well settled that in proceedings initiated under Section 7, the primary concern is to ascertain the existence of a financial debt and default by the Corporate Debtor. The Applicants, being homebuyers, may have a financial interest in the project; however, their claims are already safeguarded under the provisions of IBC, particularly under Section 21(6A), which grants representation to allottees in the Committee of Creditors (CoC) through an authorized representative. Thus, their intervention at this stage is neither necessary nor legally tenable.

4. The Applicants have contended that the real estate project is a government-backed township and that the Corporate Debtor is merely a license holder. However, mere regulatory oversight or developmental agreements with the State Government and the Lucknow Development Authority do not alter the ownership and financial liabilities of the Corporate Debtor. The Corporate Debtor remains the principal entity responsible for the execution and completion of the project, and its financial obligations, including debts owed to the Financial Creditor, remain independent of any regulatory framework governing the project. The Applicants have failed to demonstrate any statutory or contractual immunity that

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 81 would exempt the project from insolvency proceedings under the IBC.

5. The Applicants have sought to highlight the disparity between the total investment in the project (₹26,000 crores) and the default amount claimed by the Financial Creditor (₹83 crores). However, under the scheme of IBC, the quantum of debt is not a determinative factor in admitting a Section 7 petition. The only requirement is to establish the existence of a financial debt and default, as prescribed under Section 7(5). Once these conditions are satisfied, the Adjudicating Authority is bound to admit the petition. The Applicants' arguments regarding the scale of the project or the potential inconvenience to homebuyers cannot override the statutory mandate of IBC.

6. The concerns raised by the Applicants regarding potential disruptions in project completion and property registrations due to CIRP, while understandable, cannot justify an exemption of the project from insolvency proceedings. The IBC framework itself ensures that the interests of homebuyers are protected through the CoC mechanism, wherein they are recognized as financial creditors. Additionally, CIRP is intended to facilitate resolution and revival of the Corporate Debtor rather than its liquidation. In the absence of any specific legal provisions supporting the exclusion of a particular project from CIRP, the relief sought by the Applicants is untenable.

7. In light of the above findings, this Adjudicating Authority is of the considered opinion that the present application lacks merit. The Applicants have failed to establish any legal or factual basis for their intervention in the ongoing proceedings under Section 7 of IBC. The relief sought, particularly the exclusion of the real estate project from CIRP, is not supported by any statutory provision or judicial precedent.

Accordingly, the intervention petition Inv P. 43/ND/2024 in CP No.: IB 558(ND)/2024 is dismissed."

95.5. At the time of initiation of CIRP, the Adjudicating Authority also

should have adverted to this aspect of the matter to issue necessary

directions to clear any uncertainty regarding the extent of the CIRP and

the manner in which the resolution of the CD could proceed.

95.6. Answer to Question No.V: In the facts of the present case, the

CIRP needs to be confined at Lucknow project Mother City Lucknow and

Mother City Extension Lucknow, including Sushant Golf City Project as

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 82 well as three Projects of the CD situated in the State of Rajasthan -

Ajmer, Jodhpur and Jaipur as referred to in the Sanction Letter dated

16.02.2016. The Adjudicating Authority needs to consider mode and

manner of resolution of the above projects of the CD. At the first

instance, the resolution of the projects situated at Lucknow need to be

undertaken.

95.7. Answer to Question No.VI: The CD has 93 projects at Lucknow,

which are registered with UP RERA. The project wise resolution of the CD

needs to be proceeded with as required by law. The Adjudicating

Authority may also issue necessary direction regarding mode and manner

of resolution of above Projects.

Question No.VII

96. We have noted above, the judgment of the Hon'ble Supreme Court

in Mansi Brar Fernandes where the Hon'ble Supreme Court directed that

resolution of a CD of real estate project should be projects. We have

further noticed above that CIRP should be confined to projects and assets

of the CD, which are referred to and provided as security in the Loan

Agreement I & II. The CIRP need not extend to the projects, which are

situated in the States of Haryana and Punjab. Further, the CIRP of the

CD also need not extend to other projects in different cities of U.P., since

in the security of both the Loan Agreements, only the assets of the CD in

project at Mother City Lucknow and Mother City Extension Lucknow have

been provided. Thus, it needs to be clarified that other projects of the CD,

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 83 situated in other cities of U.P. like Bulandshahr, Ghaziabad, Kanpur &

Agra etc., are not to be affected by order dated 25.02.2025. It is

necessary to clarify, so that other projects of the CD may proceed in

accordance with their own terms and conditions.

97. We have noticed above the projects in Lucknow have been

entrusted to the CD to be developed under the Hi-Tech Township Policy

promulgated by the State in the year 2003 under different Development

Agreements noted above. The CD has to develop the projects at Lucknow.

One of the terms and conditions of the Development Agreement, which

was executed between the CD and the Lucknow Development Authority

with respect to projects at Lucknow is that in event the CD fails to develop

the project, the Lucknow Development Authority, will complete the

project. The Adjudicating Authority need to consider the above aspect of

the matter while issuing directions for resolution of the projects at

Lucknow. We may refer to the MoU dated 26.11.2005 between the

Lucknow Development Authority and the CD, wherein Clause 22,

following has been provided:

"22. That to ensure timely completion of the project as per the provisions of the approved DPR, the first party shall retain the transferable rights on 25 percent of total saleable land which shall be released in proportion to the second party on successful completion of various services to the functional stage. If the second party leaves any development, work incomplete, the same shall be completed by the first party through sale of the land so retained."

98. The Development Agreement dated 18.11.2006 was executed

between the Lucknow Development Authority and the CD, where Clause 8

provides as follows:

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 84 "8. Performance To ensure timely completion of the Guarantee project as per the provisions of approved DPR, the First Party shall retain the transferable rights on 25 percent of total saleable land, which shall be released in proportion to the Second Party! on successful completion of various services to the functional stage. If the Second Party leaves any development work incomplete, the same shall be completed by. the First Party through sale of the land so retained."

99. The projects at Lucknow City being projects under Hi-Tech

Township, the Adjudicating Authority has also to advert to all relevant

facts to take a decision as to whether under the Agreement between the

CD and the Lucknow Development Authority, the projects need to be

completed by the Lucknow Development Authority.

100. In view of the foregoing facts, we dispose of both the Appeal(s) in

following manner:

(1) The order dated 25.02.2025 passed by National Company

Law Tribunal, New Delhi Bench Court-IV admitting Section 7

application is upheld, subject to following directions:

(a) The CIRP against the CD is confined to CD's projects at

Lucknow Mother City and Mother City Extension at

Lucknow, Golf Plots at Lucknow and the assets of the CD

in the State of Rajasthan and built-up properties at

Ajmer, Jodhpur and Jaipur in the State of Rajasthan (as

detailed in Schedule-B of Settlement Agreement dated

03.03.2022 at Sl. No.5, 6 & 7).

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 85

(b) The Adjudicating Authority to consider the mode and

manner to proceed with project wise resolution of the CD

as per initiation of CIRP against a real estate company to

the extent as indicated above.

(c) Further steps in the CIRP of the CD shall be taken as per

directions of the Adjudicating Authority indicated above.

The Adjudicating Authority shall also consider with

respect to resolution of the CD's project at Lucknow, as

to whether as per MoU and Development Agreements

entered between the CD and Lucknow Development

Authority, the Lucknow Development Authority is to be

directed to complete the projects of the CD.

(d) UP Awas Evam Vikas Parishad shall be entitled to

pursue its application before the Adjudicating Authority

for excluding the assets claimed by it, from the CIRP of

the CD, which may be considered and decided in

accordance with law.

(e) The date of commencement of the CIRP of the CD has to

be treated as 25.02.2025 and further steps in the CIRP

be taken as per the directions of the Adjudicating

Authority to be made hereinafter.

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 86

(f) The Lucknow Development Authority be made party to

the CIRP process and it be given opportunity to file its

affidavit.

(g) The Homebuyers and other Applicants, who have filed

IAs in these Appeal(s) are at liberty to file Intervention

Petitions before the Adjudicating Authority in C.P.(IB)

558(ND)/2024.

Parties shall bear their own costs.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical)

NEW DELHI

7th January, 2026

Ashwani/ Himanshu

Company Appeal (AT) (Ins.) Nos.500 & 502 of 2025 87