Satinder Singh Bhasin vs Col Gautam Mullick And Ors

1

NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH NEW DELHI COMPANY APPEAL (AT) (INS) NO.1593 OF 2023 & IA NO.5755, 5756,5757 OF 2023 & 2826, 7807, 7817, 7883, 8349,8542 OF 2024 In matter of: Ashok Kumar Erstwhile Director of Corporate Debtor Appellant Vs Col Gautam Mullick & Ors Respondent For Appellant:Mr. Gaurav Mitra, Ms Neeha Nagpal, Mr Malak Bhatt, Mr Nikunj Mahajan, Mr Praney Shrma, Advocates. For Respondent:Mr Akshat Kumar, Mr Sarthak Jain, Mr Adesh Kumar Chaudhary, Mr Karan Vir Gogia, Mr Varaai Kr Gupta, Advocates. Ms Ruchira Gupta, Mr Amit Kumar for UPSIDA. Mr Abhishek Anand, Mr Karan Kohli, Ms Ridhima Mehrotra, Advocates for IRP MR. Vipul Ganda, Mr Pradeep Jain, Mr Shubhanshu Gupta, Mr Raunak Satpathy, Mr Kartik Pant, Mr Srijan Sonkar, Ms Nittu Barik, Mr. Annik Mishra, Mr Tisham Pati Sen, Advocates for Respondent With COMPANY APPEAL (AT)(Ins) NO.1594 OF 2023 & IA NO.5759, 5760, 5761 of 2023 & 1359, 1366, 2333, 2827, 5137, 5139, 5161, 7854, 7857,8342,8350,8536,8539 of 2024 & 2

1039, 1297,1932,2253,2263,2603, 5135 of 2025 In matter of: Satinder Singh Bhasin Erstwhile Director of Bhasin Infotech and Infrastructure Pvt Ltd Appellant Vs Col Gautam Mullick & Ors Respondent For Appellant:Mr. Gaurav Mitra, Ms Neeha Nagpal, Mr Malak Bhatt, Mr Nikunj Mahajan, Mr Praney Shrma, Advocates. For Respondent:Mr Akshat Kumar, Mr Sarthak Jain, Mr Adesh Kumar Chaudhary, Mr Karan Vir Gogia, Mr Varaai Kr Gupta, Advocates. Ms Ruchira Gupta, Mr Amit Kumar for UPSIDA. Mr Abhishek Anand, Mr Karan Kohli, Ms Ridhima Mehrotra, Advocates for IRP MR. Vipul Ganda, Mr Pradeep Jain, Mr Shubhanshu Gupta, Mr Raunak Satpathy, Mr Kartik Pant, Mr Srijan Sonkar, Ms Nittu Barik, Mr. Annik Mishra, Mr Tisham Pati Sen, Advocates for Respondents Ms Aditi Mohan, Mr Divyagyan, Advocates Ms Prachi Johri, Advocate for Intervenor

JUDGEMENT

JUSTICE YOGESH KHANNA, MEMBER (JUDICIAL) This appeal is filed against an impugned order dated 04.12.2023 passed

by the Learned Adjudicating Authority, NCLT, New Delhi in CP(IB) No. 646/2021

whereby the Ld. Adjudicating Authority had admitted an application, under

Section 7 of IBC, filed by the allottees in relation to (a) Bhasin Infotech and

Infrastructure Pvt Ltd and (b) Grand Venezia Commercial Towers Pvt Ltd.

2. It is the foremost submission of the learned counsel for the appellant, the

two companies stated above, are both separate legal entities viz M/s Grand

Venezia Commercial Towers Pvt Ltd and M/s Bhasin Infotech and Infrastructure 3

Pvt. Ltd. and (a) allottees of both these companies have filed a single Company

Petition under Section 7 of the Code and the allottees, if taken separately, of both

the companies, they would not make out the threshold, as is required under

Section 7 of the Code to file a company petition, but to overcome such disability,

they have joined these two Corporate Debtor(s) together and have filed a single

company petition under Section 7 of the Code, which per se is not maintainable

and (b) there exists no default on the part of both these corporate debtors, as

prior to the CIRP being commenced, they had already executed 21 bipartite lease

deeds with the allottees and even settled with some of the allottees by giving

refund to them.

3. Further it was argued the only issue creating problem is the tripartite lease

deed(s) which were to be executed between the corporate debtor(s), the allottees

and the UPSIDC, but since a dispute was raised by UPSIDC qua demanding dues

for additional FAR, it failed to come forward for executing such deeds. A Writ

Petition (Civil) No. 26964 of 2024 was filed before Allahabad High Court by the

suspended management to sort out the said issue. It is alleged UPSIDC was

demanding Rs. 51 crores towards additional fee, but the High Court directed the

appellant to deposit an amount of Rs.10 crore with UPSIDC till the disposal of

the writ petition and the said amount was rather deposited. It was also the

submission of the learned counsel for the appellants the occupancy certificate

has since been granted in the year 2015, both for commercial tower as well as

for shopping Mall, but only because of the disputes pending with UPSIDC, the

conveyance deeds/Tripartite lease deed could not be executed and thus there 4

was never any fault on the part of the corporate debtor(s) at any stage. In this

context, reference was made to order dated 07.12.2023 passed by this Tribunal

which reads as under:

6. After considering the submissions of the Counsel for the parties, we are of the view that the major issue between the parties is tripartite lease deed and due to reason that certain unit holders have not taken possession and have been contending that there is default on the part of the Appellant. In view of the materials which have been placed by the Appellant, the present was not a case for initiation of the CIRP since according to the Appellant all constructions are complete and units are ready to occupy. We are of the view that in the ends of justice be served by finding ways and means to protect the interest of the allottees by execution of the lease deed and by handing over the possession. We issue notice in both the Appeals.

7. Let Reply be filed by the allottees as well as UPSIDC within three weeks. Rejoinder, if any, be filed within two weeks thereafter.

8. List both the Appeals on 15.01.2024.

4. Reference was also made to an order dated 07.03.2025 passed by this

Tribunal which records as under:-

18. Now we come to another issue raised before us. A writ petition No.26964/2024 is filed by an erstwhile Director of the CD against the State of UP and three others for quashing of a demand raised by the UPSIDC and the same is now listed on 10th March, 2025 for final arguments. We find the said writ petition furthers the cause of allottees as is noted in paras No.5 and 6 of this tribunal's order dated 7.12.2023 (supra), hence we direct the RP to accord his presence in the said writ petition, as a co-petitioner, in the peculiar circumstances as are explained and would act in accordance with law.

5. Further an order dated 04.04.2025 was also passed by this Tribunal

which records as under: -

5 Status Report has been filed on behalf of RP. Be also listed on the next date of hearing. RP to comply with the order dated 07.03.2025 in relation to Allahabad High Court.

6. Reference was also made to an order dated 04.08.2025 passed in WP(C)

No. 26964/24 to say the said writ petition has been substantially argued but

because of the change of roster the matter is lingering on. He then referred to

Writ Petition (Cr) No. 242/2019 wherein an order dated 22.07.2025 was passed

by the Hon'ble Supreme Court which record:

3. We request Mr Vipin Sanghi, learned senior counsel, to prepare a chart, in a tabular form, indicating the status of each one of the allottees, after ascertaining their desire as to whether they want to take possession of the property or seek refund of the amount deposited and that too with or without interest.

4. We add that, the petitioner shall also specifically respond to the status report as also the report of the observer annexed with the application filed by the IRP as mentioned above. Also, we expect the petitioner to furnish all information to the IRP, as is so required, for ascertaining the exact status to be allotted to the allotees.

5.Mr Shyam Divan, learned senior counsel appearing for the petitioner, submits that demands raised by UPSIDA are pending adjudication before the High Court of Allahabad in WP No.26964/2024 and the same is listed on 24.07.2025. We request the High Court to consider and decide the same expeditiously.

7. The learned counsel for the appellant then referred to a letter dated

27.06.2013 issued by UPSIDC which records the part completion certificate of the

building on Plot No.SH-03, Site IV, Surajpur for Hotel cum Multiplex cum

Shopping Complex Project, issued by the Executive Engineer on dated

16.04.2015, and it state the said part completion certificate was issued for the

part of the project, except Hotel portion i.e. it was issued for Multiplex and 6

Shopping Centre. It is also recorded therein the building is constructed in good

quality and as per the sanctioned plan. Thus it was the argument of the learned

counsel for the appellant the completion certificate and the occupancy certificate

have since been issued for commercial complex as well as the shopping complex

but later a dispute was raised by the UPSIDC for further fee/charges which is

pending litigation and for this reason the UPSIDC is not inclined to execute

Tripartite Lease Deeds.

8. Further it was argued in case Section 7 petition is admitted that would

rather delay the entire process, since lot of time shall be consumed for locating

the Successful Resolution Applicant and even the Successful Resolution

Applicant would not be able to get such Tripartite lease deeds executed due to

excessive charges being raised by the UPSIDC. Thus it was argued, the

appellants had every intention to execute Tripartite Lease Deeds, but for the

disputes pending with UPSIDC, they were unable to do so.

9. The learned counsel for the appellant also referred to affidavit(s), both

dated 23.07.2024, filed in Company Appeals (AT)(Ins) No.1593 of 2023 and

1594/2023 to show the allottees who filed the company petition were much

below the threshold as is provided in proviso to Section 7 of the IBC Code and

the issues were rather got settled with most of such allottees/petitioners, even

prior to this filing of their petition under Section 7 of the Code.

10. It was also the submission of learned counsel for the appellant admittedly

the allottees of two groups companies were got clubbed together to bring them 7

above the threshold of 100 allottees and this principle was wholly incorrect as

some of the allottees, who settled prior to the petition, deliberately were made

parties to the petition. He referred to an affidavit dated 23.07.2023 to press his

argument. He argued the impugned order referred to the settlements post filing

of the petition saying those cannot be looked into but utterly failed to consider

some of such settlements were prior to the filing the petition and the Court ought

to have looked into the affidavit dated 23.07.2023, which unfortunately was

never considered by the Court.

11. Thus it was argued 103 allottees were not genuine allottees and threshold

was never met and there is no provision in the IBC Code for integration of the

companies for the purpose of CIRP. It was only in those cases where one

company is an owner and another a developer, then perhaps the companies may

be clubbed. Lastly, the learned counsel referred to Navin Raheja Vs Shilpa Jain

and Others, (2020) 2019 Comp Case 589 to say if the delay in obtaining the

occupancy/completion certificate was on account of the fault of the government,

then the Corporate Debtor can not be made liable at all and petition under

Section 7 ought not to have been accepted. Heard.

12. Before proceeding further, let us note the salient features of impugned

order, as under:

4.The present petition was filed on 03.06.2021 before this Adjudicating Authority on the ground that the Corporate Debtor 1 & 2 has defaulted to make a payment of a sum of Rs.

30,70,68,335/- (Rupees Thirty Crore Seventy Lacs Sixty-Eight Thousand Three Hundred and Thirty-Five).

8 5. c) That 'The Grand Venice' is one, composite and integrated project launched by the Corporate Debtor 2 in the year 2005, which consists of 3 sections namely (i) a luxury 5-star hotel including integrated office spaces, (ii) a section of the mall having food courts, gaming zone, Gondola rides, etc. and (iii) the Cineplex for movies

j) That the property in Noida/Greater Noida is a "Lease Hold"

type and not free hold and as per the statutory law, the sub- lease deeds of all properties in this region have to be with the concerned authority as the main party (UPSIDA in the instant case). Further, as per the Tripartite sub-lease deed executed between the Corporate Debtor 2 and UPSIDA, it is a condition precedent that the allottee of the developer shall be the lessee, UPSIDA shall be the lessor and the developer (i.e., the Corporate Debtor 2) shall be the confirming party. Therefore, the Corporate Debtors had committed violations with respect to sublease deed execution and possession as committed in MoU.

11. In the present case, the Applicants are the group of allottees who have booked their units in a project namely "The Grand Venice" of the Corporate Debtors, M/s Grand Venezia Commercial Towers Private Limited (Corporate Debtor 1) and M/s Bhasin Infotech and Infrastructure Private Limited (Corporate Debtor 2) and the Corporate Debtors are engaged in the business of real estate activities which includes developing, buying, selling, renting managing and appraising real estate amongst others. Further, it is envisaged under Section 5(8)(f)(ii) of the Code that the definition of 'allottees' for the purpose of IBC, shall have same meaning as defined under Section 2(d) of the Real Estate (Regulation and Development) Act, 2016.

12. In the present case, the petition has been filed by 103 allottees. However, subsequently, settlement arose between certain allottees and the Corporate Debtor(s) and therefore, such allottees withdrew their names from the present petition. Further, it is the contention of the Corporate Debtor(s) that out of the total allottees, 56 allottees paid the principal amount in full, however, failed to pay the stamp duty. Further, the Corporate Debtor(s) contended that the principal amount is pending with respect to 30 allottees. However, it is pertinent to mention that the Corporate Debtor(s) had failed to enclose any supporting document in respect of the contentions made by the Corporate Debtor(s). We are of the view that mere averments, in the absence of substantiating document, cannot be acted upon. Therefore, the contention of the Corporate Debtor(s) in this regard is not sustainable.

9 13. Further, reference is taken from the judgment of the Hon'ble Supreme Court in the case of Manish Kumar Vs Union of India (2021) 5 SCC 1, wherein, it was held that the quorum of 100 is to be seen as "on the date of presentation of the petition" and not at the time of hearing or admission. The relevant extract of the judgment is reproduced hereunder:

"The point of time to comply with the threshold requirements

141. The question, then arises, as to the alleged lack of clarity about the point of time, at which the requirements of the impugned provisos, are to be met. Is it sufficient, if the required number of allottees join together and file an application under Section 7 and fulfil the requirements, at the time of presentation? Or, is it necessary that the application must conform the numerical strength, under the new proviso, even after filing of the application, and till the date, the application is admitted under Section 7(5)? There can be no doubt that the requirement of a threshold under the impugned proviso, in Section 7(1), must be fulfilled as on the date of the filing of the application. In this regard, we find support from an early judgment of this Court, which was rendered under Section 153-C of the Companies Act, 1913. Section 153- C is the predecessor to Sections 397 and 398 read with Section 399 of the Companies Act, 1956. Its most recent avatar is contained in Sections 241 and 242 of the Companies Act, 2013 read with Section 244. In fact, Section 399 (3) of the Companies Act, 1956, read as follows: "399(3) Where any members of a company are entitled to make an application in virtue of sub-section (1), any one or more of them having obtained the consent in writing of the rest, may make the application on behalf and for the benefit of all of them."

142. In the decision of this Court in Rajahmundry Electric Supply Corporation Ltd. v. A. Nageshwara Rao and others51, the provision in question, viz., Section 153-C of Companies Act, 1913 dealt with the power of the Court to Act, when the Company acts in a prejudicial manner or oppresses any part of its members. It, inter alia, provided that no application could be made by any member, in the case of a company having a share capital unless the member has obtained consent, in writing, of not less than one hundred in number of the members of the company or not less than one-tenth in number of the 10

members, whichever is less. There was also an alternate requirement, to which, resort could be made in regard to company, not having share capital. There was another mode of fulfilling the threshold requirement. In the facts of the said case, the number of the members of the company were 603. Sixty-five members consented to the application. The problem, however, arose as it was contended that 13 of the members who had consented, had, subsequent to the presentation of the application, withdrawn their consent. This Court went on to hold as follows:

"5 xxx xxx xxx We have no hesitation in rejecting this contention. The validity of a petition must be judged on the facts as they were at the time of its presentation, and a petition which was valid when presented cannot, in the absence of a provision to that effect in the statute, cease to be maintainable by reason of events subsequent to its presentation. In our opinion, the withdrawal of consent by 13 of the members, even if true, cannot affect either the right of the applicant to proceed with the application or the jurisdiction of the court to dispose of it on its own merits."

14. Therefore, in view of the Judgment of the Hon'ble Supreme Court in the Manish Kumar (Supra), the number of allottees has to be seen on the date of the filing of the petition and subsequent withdrawal of certain allottees in view of the settlement arose between settled allottees and the Corporate Debtor(s) would not affect the maintainability of the present petition. Thus, this Adjudicating Authority is of the view that the total number of allottees being 103, at the date of the filing of the instant application, fulfills the threshold limit of minimum hundred allottees as envisaged under Section 7 of the IB Code, 2016

15. Further, in the present case, the Corporate Debtor 1 entered in the field of Real Estate Construction and Development in the year, 2005. The Corporate Debtor 2 launched one composite and integrated project by the name of "The Grand Venice". The said project comprises of 3 sections i.e., a section of hotel having integrated office spaces and luxury shops, a section of the mall and a cineplex for movies. The allottees in the present case made investments with respect to the first section. Annexure RA/2 and Annexure RA/3 enclosed in the Rejoinder filed by the petitioners depicts that office spaces and luxury 11

shops integrated with 5-star hotel is considered as a one unit. Further, the concerned authority i.e., the UPSIDA made the very initial allotment in respect of the first section only. Additionally, on perusal of Annexure-2 filed with the main petition and the payment receipt issued by Corporate Debtor(s) enclosed as Annexure 4 in the main petition, it is evident that the petitioners had made payments in respect of the first section of the project and the same has also not been disputed by the Corporate Debtor(s). Therefore, this Adjudicating Authority is of the view that disbursals have been made by the Financial Creditors in the favour of the Corporate Debtor(s). Hence, first essential ingredient of application under Section 7 of the IB Code, 2016 i.e., there is a 'debt' stands substantiated.

16. Further, in the present case, the Corporate Debtor(s) had contended that not only the project is completed but the Respondents have made every effort to urge the allottees to complete their payments and get the registration and possession of the units but the Applicants failed to take the possession of the units. However, on the perusal of the documents placed on record vide I.A. No. 2178 of 2023 in Annexure A5 (Page 62 to 81), it can be seen that the units which need to be handed over by the Corporate Debtor(s) to the Financial Creditors are still under construction and not complete till date. It is also observed that such pictures depicting the incomplete construction of units are not disputed by the Corporate Debtors. Additionally, it is stated by the UPSIDA vide RTI reply dated 24.03.2018 in para 7 that without completion certificate, the builder cannot offer possession of "any part and parcel of this project". However, in RTI reply dated 24.03.2018 enclosed as Annexure-RA/9 in the rejoinder filed by the petitioners, it has been made clear that the builder has not applied for final Completion Certificate and that till 24.03.2018, only a partial completion certificate had been issued. Therefore, this Adjudicating Authority is of the view that the Corporate Debtor(s) had failed to handover the possession of the units to the Financial Creditors. Therefore, the second major essential ingredient of an application under Section 7 of the IB Code, 2016 i.e., there is a 'default' with respect to the debt, stands substantiated

19. Additionally, the Corporate Debtors had contended that the present petition is not maintainable on the ground that it seeks to initiate CIRP against two Corporate Debtors in one petition. Nevertheless, the Code is silent on conducting the CIRPs of related parties in a consolidated manner. However, the fact 12

that the inter-linkages of the related Corporate Debtors would be beneficial for value maximisation and continuing all the concerned companies as going concerns after completing their respective CIRPs, cannot be ignored. Further, time and again, this Adjudicating Authority has been of the view that consolidating the CIRPs of the Corporate Debtors would ensure a higher possibility of revival, improved procedural coordination and better value realisation and the same was affirmed by the Hon'ble NCLAT vide its judgment in Edelweiss Asset Reconstruction Company Limited Vs Superlative Infrastructure Private Limited, Company Appeal (AT) (Insolvency) No. 377 of 2019. The relevant extract of the judgment is reproduced hereunder: "41. In view of our findings and as the Adjudicating Authority has failed to appreciate the relevant fact that in the facts and circumstances, a group insolvency is to be initiated and in absence of simultaneous 'Corporate Insolvency Resolution Process' against five 'Corporate Debtors' namely-- 'Sachet Infrastructure Pvt. Ltd.'; 'Magad Realtors Pvt. Ltd.'; 'Mehak Realtech Pvt. Ltd.'; 'Sameeksha Estate Pvt. Ltd.' and 'Jamvant Estates Pvt. Ltd.', the township project of Town and Country Planning, Haryana, will not be complete, we set aside the impugned order dated 7th March, 2019 and remit the case to the Adjudicating Authority with following directions." Therefore, in the light of the aforesaid observations, the contention raised by the Corporate Debtors in this regard does not hold any ground.

13. Though an issue qua maintainability was raised by the appellants herein

but the impugned order itself clarified in its para(s) 12 and 19 of the impugned

order that the petition u/s 7, IBC was maintainable.

14. The aforesaid paras do show there were 103 allottees at the time of the

filing of the petition, hence the threshold was met and though the submission of

the appellants viz some of its allottees have since settled, but admittedly the

appellants failed to file any documents on record to support such contention and

hence such contention was rightly rejected. Qua the argument that a joint CIRP

could not have been possible in the facts of the present matter; we may refer to 13

paras 11 and 12 of the rejoinder filed on behalf of the appellants herein to the

reply dated 27.07.2022, wherein the appellants themselves have admitted of

both companies, being controlled by one single group of management. Paras 11

and 12 of the rejoinder are as under: -

11. That further in the case of Jintender Arora, RP, M/s Premia Projects Ltd Vs Tek Chand cited as Company Appeal (AT)(Ins) No.1069 of 2020 it was held as follows:-

"if a Corporate Debtor has intricate financial relationship with another company which is controlled in an overwhelming manner by the same set of directors, as the corporate debtor and their businesses are inter- related, intertwined and interwoven, it stands to reason that such companies should be looked at jointly, for matters related to insolvency resolution, as the financial revival of one company will be closely linked to the financial health of the other company. That the Hon'ble NCLAT had held that a joint CIRP would be possible only if there is an application for admission under the IBC against the land owning entity. In the present case the land owning entity is one of the Corporate Debtors. Further, it is submitted that both the Corporate Debtors are part of the Bhasin Group and are promoted by the Bhasin Family. All the directors are common and the address including ROC registered email address is also the same for both the Corporate Debtors. Another example is that the assets are common to such an extent that Bhasin Infra had allowed another subsidiary company (Grand Venezla Commecial Towers Pvt Ltd) to carry on the development. All communications and notices for making payments have been made by Bhasin Infotech and Infrastructures Ltd only irrespective of the fact whether any MOU of an Investor/buyer is either with any of the above two named companies.

12. It is quintessentially submitted that for the purpose of joint CIRP, the following things are essential:

a) Common Control: In the present case, common control is exercised by family members who are respective directors in both the CD No.1 and CD No.2.

14 b) Common Directors: In the present case various directors in CD1 and CD2 are (present and past) are tabulated as below: it is clearly depicted herein that 06 directors have been in common especially during the time of commission of alleged offences/default.

15. Further admittedly a standard allotment letter was issued to all the

allottees and it showed names of both these Corporate Debtors, as under: -

BHASIN GROUP

Sub: Booking of Commercial Office Space in Grand Venezia Commercial Tower situated at Plot No.SH-3, Site- IV, Industrial Area, Surajpur, Greater Noida, UP, India. Dear Sir, This has reference to your application dated 04.07.2011 submitted to Messrs Grand Venezia Commercial Towers Pvt Ltd (hereinafter referred to as the Company) for booking of Commercial Office Space in Grand Venezia Commercial Tower situated at Greater Noida being developed at Plot No.SH-3, Site-IV, Industrial Area, Surajpur, Greater Noida, UP India (hereinafter referred to as the Commercial Plot)"

16. The payment receipt given to allottees with an endorsement of

acknowledgement by both these Corporate Debtors is as under:-

RECEIPT No.GVCTGPL/CT/Office/008 Dated: January 4, 2010 Customer Code Received with thanks from Mr Gautam Mullick R/o 1/327, Ground Floor, Janakpuri, New Delhi-110058 sum of Rs.1,00,000/- (Rupees One lac fifty thousand only) towards provisional registration for booked an area of approximately 664.00 square feet (super area) bearing unit No.1001 on Tenth Floor, subject to final confirmation of area in Grand Venezia Projecte at Greater Noida Uttar Pradesh vide Cheque/Demand Draft Pay Order/Cas as per the details given below:-

15 S.No. Cheque/de Cheque/dema Drawn on bank Amount (in

mand nd draft/pay Rs.)

draft/pay order date

order No.

1 080580 January 8, HDFC Bank 1,50,000.00

2010 Ltd

Plot No.28

Block B,

Community

Centre,

Janakpuri,

New Delhi

Total Rs One lac 1,50,000.00

fifty

thousand

only

For Bhasin Infotech and Infrastructure Pvt Ltd Sd/-

Authorised Signatory

17. In addition to above, we have also noted the contents of allotment letter

issued by UPSIDC of dated 5th August, 2006 qua allotment of Plot No.SH-3,

Industrial Area Surajpur, Site IV, to Corporate Debtor and it entail the following

conditions:

16 10. The allottee shall have the right to sell of the built up portion to any person for its choice for first such transfer no levy shall be charged by UPSIDC.

b. The tripartite lease deed of the built up premises shall be executed by UPSIDC Ltd with the ultimate allottees of Developer on the request of the developer in writing.

In tripartite lease deed, the allottee of developer shall be the lessee, the UPSID will be transferring the proportionate undelivered interest in the land while the developer will be transferring the interest in the built up space.

c. The Lease Deed of a built up space will be executed only after the corporation has given completion certificate. For that built up space.

18. Clause (b) above of such allotment letter was infact a pre-condition for

allotment of land to CD No.1 viz a tripartite deeds need to be executed with every

allottee; but since 2006 admittedly it has not been executed, even for a single

allottee.

19. Now qua joining of two Corporate Debtors, one may refer to Section 7 of

the IBC, more specifically its second proviso, which read as under:

Provided further that for financial creditors who are allottees under a real estate project, an application for initiating corporate insolvency resolution process against the corporate debtor shall be filed jointly by not less than one hundred of such allottees under the same real estate project or not less than ten per cent. of the total number of such allottees under the same real estate project, whichever is less:

20. Moreso there is no bar in the Code to initiate CIRP of two companies at the

same time when they are collaborating for the same real estate project. In Mist

Avenue Pvt Ltd Vs Nitin Batra & Ors, Company Appeal (AT)(Insolvency)

No.127/2023 the Ld. NCLAT on 17.11.20213 held as under:-

15. When we take a holistic view of the matter, it is clear that all three Appellants had joined hands to develop the project.

Present is a case of Real Estate Project and the project cannot 17

be successfully developed by any one of the Appellants who were Respondents in Section 7 application. Under the Collaboration Agreement, 'Anand Infoedge Pvt. Ltd.' and developers have undertaken several responsibilities towards the allottees. The construction of Real Estate Project will not be achieved in event joint insolvency is not initiated against all the three Corporate Debtors who are Appellants before us, the allottees will put to severe loss and hardship. CIRP in the Real Estate Project has different contours and ramification. It is also on the record that at a time when 2nd Collaboration Agreement was entered between 'Anand Infoedge Pvt. Ltd.'and 'Mist Direct', 'Anand Infoedge Pvt. Ltd.' has 99.99% shareholding in 'Mist Direct'. All three companies who are impleaded as Respondents in Section 7 Application and Appellants before us are closely connected with the construction and implementation of the project. The developer who have issued allotment letter and executed Builder Buyer Agreement was acting on behalf of 'Anand Infoedge Pvt. Ltd.' who has given authority to 'Mist Direct'.

17. We need to look into some decided cases which have been cited by both the parties in support of their submissions. We may first notice Judgment in C.A.(AT) Ins. No. 155 of 2018, Mamatha Vs. AMB Infrabuild Pvt. Ltd. & Ors. The above case was a case where an application was filed under Section 7 by a Real Estate Allottee, against two corporate debtors were impleaded in the Application, Application was rejected by the Adjudicating Authority. In the Application AMB Infrabuild Pvt. Ltd. who was owner of the land and Earth Galleria Pvt. Ltd. who was developer, both were impleaded as Corporate Debtor No. 1 and 2. Collaboration Agreement was entered between both the Respondents i.e. owner of the land and developer to develop the project. This Tribunal noticed the facts of the case and made following observations and conclusions in paragraph 11,12,13 and 14:

"11. The 'Collaboration Agreement' dated 3rd May, 2013 reached between the 'Owner of the Land'- 'AMB Infrabuild Pvt. Ltd.' and the 'Developer'- 'Earth Galleria Pvt. Ltd.' shows that the 'Developer' will sell the flats to the extent of its own shares and the 'Land Owner' will sell the developed portion of its own shares. The 'Land Owner' have agreed to make it as a 'Joint Venture Project' and treated the 'Joint Venture Project' for all purpose as evident from Clause 55 of the 'Collaboration Agreement' dated 3rd May, 2013 read with Memorandum of Understanding reached between three 18

allottees, the Appellant and the 1st and 2nd Respondents dated 6th February, 2016.

12. The 'Developer'- 'M/s. Earth Galleria Pvt. Ltd.' having been empowered by 'M/s. AMB Infrabuild Pvt. Ltd.'- ('Land Owner') to advertise the project and for marketing the developed property as a 'Joint Venture Project', in terms with the said 'Collaboration Agreement' on behalf of the joint venture, if the Memorandum of Understanding dated 20th June, 2014 has been reached between the 'Earth Infrastructure Ltd.' and the Appellant- Mrs. Mamtha, the 2nd Respondent cannot take a plea that it is not a signatory to the Memorandum of Understanding dated 20th June, 2014, the 2nd Respondent being represented by 'Earth Infrastructure Ltd.' pursuant to the 'Collaboration Agreement'.

13. The Adjudicating Authority has failed to take into consideration the aforesaid facts and wrongly held that the 'Corporate Insolvency Resolution Process' cannot be initiated against the two 'Corporate Debtors'. 14. If the two 'Corporate Debtors' collaborate and form an independent corporate unit entity for developing the land and allotting the premises to its allottee, the application under Section 7 will be maintainable against both of them jointly and not individually against one or other."

45. Learned Counsel for the Appellant has also contended that eight allottees have settled their matters hence they should be excluded from number of 100 which need to be fulfilled. Hon'ble Supreme Court has answered the said question as to what is the point of time when the threshold requirement has to be proved. In Manish Kumar itself it has been answered that requirement of threshold under proviso in Section 7(1) must be fulfilled as on the date of filing of the Application. The fact that eight allottees have settled the matter is thus inconsequential and eight allottees cannot be excluded in the counting of 100 allottees which are required to be fulfilled as threshold. The provision of Section 7(1) Second Proviso inserted by Act No. 1 of 2020 having been explained by the Hon'ble Supreme Court, the law is well settled that all applicants who have joined the Section 7 Application have not fulfilled the threshold individually nor claim of all the applicants individually has to be within time in event there is default of more than Rs. 1 Crore and default of Rs. 1 Crore on basis of which the application is filed is well within time. The mere fact that claim of some other barred by time is insignificant. Application under Section 7 of the Code triggered when default of Rs. 1 Crore qua some of the 19

applicant or some other financial creditors is fulfilled, Insolvency Resolution Process under Section 7 can commence.

21. In the light of above, we may now note the Joint Venture Agreement Dt.

14.12.2009 between the two Corporate Debtors makes an interested reading. It

notes:

Whereas

1. Uttar Pradesh State Industrial Development Corporation Ltd (UPSIDC) has allotted a land of 40505 Sq Meters in favor of BIIPL at Plot No.SH-03, Surajpur Site-IV, Greater Noida for Commercial & Shopping Complex vide allotment letter bearing No.4733-34 dated 05/08/2006 subsequent to which two separate lease deed dated 23.08.2006 and 30.03.2009 was executed in this regard.

2. BIIPL is constructing commercial and shopping complex at said allotted Plot No.SH-03, Surajpur Site-IV, Greater Noida and desired to grant exclusive marketing rights for purpose to sell units in those Commercials Complex.

3. GVCTPL approached the BIIP and expressed its willingness and consent for the same on the terms and conditions mutually agreed upon.

NOW THIS AGREEMENT WITNESSES AS FOLLOWS:

1. The BIIPL hereby grants exclusive marketing rights to GVCTPL for selling the commercials units being constructed at Plot No.SH-03, Surajpur Site-IV, Greater Noida.

2. The GVCTPL shall also have authority to receive and collect payments on behalf of BIIPL from customers/clients. The collection and payment of the consideration by GVCPTL shall be purely as an agent. The initial agreed area shall be approximately 7,00,000 (Seven Lakhs only) sq ft for GCTPL to take advances from customers on behalf of BIIPL.

22. Thus it appears this Joint Venture has facts identical to Mist Avenue Pvt

Ltd (Supra).

23. Now on default, admittedly units are not complete and though Tripartite

Deeds were to be executed within five years from allotment(s) have not since been

executed till date. Para 16 of the impugned order aptly gives the reasoning for 20

'Default'. Moreso the observer's report dated 15.05.2025 of Justice Rajnesh

Bhatnagar, too points out the project is still incomplete. In para 28 of his report,

he notes: -

28. That in view of the above the undersigned concludes that at present, the Commercial Tower/Office Building integrated with the mall is only partially built and lacks basic safety measures such as Fire safety, lift services, adequate lighting, air conditioning, prober bathroom facilities, security etc. It is stated that no fir NOC, fire hydrants and no fire fighting equipment and no separate fire exit was found to be in existence during the inspection. The units situated on all floors require substantial amount of work to be done before giving possession to the allottees in a fit and proper state and by no stretch of imagination, immediate possession can be given to the allottees.

24. Thus neither the construction is complete till date nor the assured returns

have been paid to the allottes since 2014. Annexure R-22 of the reply of

respondent No.1 is a letter issued by appellants, stopping the assured returns

as under:

Dear Mr/Ms/Mrs Subject Office space in Grand Venice Project- Greater Noida It has been a great pleasure to have you as one of our valued clients who has booked office space/shop in our Grand Venice Project at Greater Noida.

We are pleased to inform you that our project is nearing completion and we hope to hand over the possession of the booked space shortly. We would also like to inform you that a large number of Anchors & big retail outlets (National & International Brands) have booked space in our shopping areas and the structure of our 5 star Hotel is almost ready & has been taken up for fitouts and early commissioning. While the above activities are taking place in full swing, we would also like to bring to your kind notice that due to recent slowdown of the real estate market, most of the real estate developers have not been able to generate adequate funds and the same has resulted in large scale cash crunch for them. Likewise it has also affected our working capital. The market 21

analysts and researchers have however opined that the slowdown of real estate sector is short lived and the outlook for 2014 is going to be bright and the property prices are going to appreciate and the real estate market will pick up due to favorable market sentiments during 2014. As we are moving towards completing the Mall and the Office tower at an early date for handing over to our esteemed clients like you, we need all the revenue generated for finishing jobs and therefore are facing difficulty in paying the monthly return to you for the present and have the following proposals:-

1. In lieu of monthly return amount for the balance period i e up to the date of handing over, we can offer you extra space after adjusting the balance payment if any due from you; OR

2. Adjust the monthly return amount due for the balance period (up to the date of handing over of Premises) against your dues towards purchase of built up space (office/shop) and recover or pay the remainder if any at the time of handing over.

We hope that as a gesture you will kindly agree to our above proposal and confirm to us. However, we are prepared to discuss with you if you have any other proposal.

Thanking you, Yours Sincerely

25. Similar are the arguments on behalf the UPSIDC viz till date the appellants

have not provided the list of allottees; deposited the dues with the UPSIDC and

it is a case of double allotment.

26. The Status Report dated 11.09.2024, filed by the IRP, pursuant to the

directions of this Hon'ble Appellate Tribunal dated 04.07.2024, and the

Observer's Report dated 15.05.2025 submitted by Mr. Justice Rajnish

Bhatnagar (Retd.), categorically establish the construction of the project is

grossly incomplete and in a deplorable condition. The IRP. upon physical

inspection, recorded the units from the 3rd to 8th floors are mere bare-shell

structures with raw concrete and debris scattered all around, with even basic 22

elements such as doors missing. More significantly, it was found no construction

whatsoever had taken place from the 9th to 15th floors, and a similar situation

existed with respect to the so-called virtual office spaces and luxury retail units.

It is further pertinent to note the Observer's Report dated 15.05.2025

independently corroborates these findings. The Report specifically noted the

units on 3rd to 15th floors were filled with debris and had no proper entryway,

and in several areas the ceilings were open with exposed electrical wiring. The

Report further emphasized on the 9th to 15th floors, no units have been

constructed at all. It was also confirmed vital infrastructural elements such as

the installation of lifts, construction of staircases, and other basic safety and

utility works remain incomplete, thereby rendering the premises unfit for any

lawful or residential use. Thus both reports filed by two independent authorities

acting under the directions of this Tribunal conclusively establish the project is

in an incomplete and dilapidated condition, wholly incapable of being handed

over to the allottees. These undisputed findings go to the root of the matter, and

conclusively demonstrate the failure of the Corporate Debtor to fulfil its

obligations.

Further, the Hon'ble Supreme Court, by its order dated 29.04.2025 in M.A. No.

239 of 2024, appointed three senior officials of UPSIDA to conduct an inspection

of the allottees" units and to submit an affidavit disclosing the status thereof.

Pursuant thereto, UPSIDA filed an affidavit dated 06.05.2025 enclosing an

inspection report dated 01.05.2025, wherein it categorically concluded the

project remains incomplete and the units are unfit for immediate possession.

23 Further, it was also recorded the requisite NoCs from the Pollution Control

Board, Electricity Department, and Fire Safety Department have not been

obtained by the Corporate Debtor.

27. Thus on the basis of the facts and circumstances narrated above and in

addition to the reports of the IRP as well as the Ld. Observor, we find till date the

construction is not complete, as enumerated above and thus are of the

considered opinion there is no merit in these appeals and the appeals are

accordingly dismissed.

28. Pending applications are also dismissed.

(Justice Yogesh Khanna) Member (Judicial)

(Mr. Ajai Das Mehrotra) Member (Technical) Dated: 29-10-2025

BM