Shristi Infrastructure Development ... vs Housing And Urban Development ...

(Arising out of Order dated 20.12.2024 passed by the Adjudicating Authority (National Company Law Tribunal), Kolkata Bench, Kolkata in I.A. (IBC) No.693/KB/2024 in C.P. (IB) No. 202/KB/2021)

IN THE MATTER OF:

Shristi Infrastructure Development Corporation Limited, Redg. Office At Plot X-1, 2 & 3, EP Block, Sector - V, Salt Lake City, Kolkata - 700091 Email: secretarial@shristicorp.com. .... Appellant

Vs

1. Housing and Urban Development Corporation Limited, Regd. Office at: HUDCO Bhawan, India Habitat Centre, Lodhi Road, New Delhi

Regional Office At HUDCO Bhawan, Vidhyut Murg., Jyoti Nagar, Jaipur - 302005, Rajasthan. Email: cswhudco@hudco.org

2. Vikram Kumar Resolution Professional of Sarga Udaipur Hotels & Resorts Private Limited (formerly known as Shristi Udaipur Hotels & Resorts Private Limited) Regd. Office At: Plot X-1, 2 & 3, EP Block, Sector - V, Salt Lake City, Kolkata - 700091 .... Respondents

Present: For Appellant: Mr. Abhishek Anand, Ms. Sugandh Kocchar, Ms. Srishti Juneja and Ms. Akshra Arshi, Advocates.

For Respondents: Mr. Ashok Kumar Jain, Advocate.

Cont'd.../ -2-

JUDGMENT

ASHOK BHUSHAN, J.

This appeal by a Promoter of the Corporate Debtor has been filed

challenging the order dated 20.12.2024 passed by the Adjudicating

Authority (National Company Law Tribunal) Kolkata Bench, Kolkata

rejecting I.A. No.693/KB/2024 filed by the Appellant to recall the order

dated 30.08.2023 passed by the Adjudicating Authority.

2. Brief facts of the case necessary to be noticed for deciding this appeal

are:

(i) The Corporate Debtor - Sarga Udaipur Hotels & Resorts Private

Limited entered into a loan agreement with Housing and Urban

Development Corporation Limited (HUDCO) for an amount of

Rs.6907.92 Lakhs. Under the loan agreement, the Respondent

No.1 was empowered to appoint a Nominee Director in the Board

of the Corporate Debtor. One Dr. Alok Kumar Joshi was

appointed by Respondent No.1 as Nominee Director of the

Corporate Debtor.

(ii) The Corporate Debtor - Sarga Udaipur Hotels & Resorts Private

Limited filed an application under Section 10 of the I&B Code.

CIRP against the Corporate Debtor commenced by order dated

29.04.2022 passed by the Adjudicating Authority on Section 10

application filed by the Corporate Debtor itself.

Company Appeal (AT) (Insolvency) No. 376 of 2025 -3-

(iii) Respondent No.1 - HUDCO filed a claim in the CIRP of the

Corporate Debtor for an amount of Rs.23,82,02,414/-. The

Resolution Professional admitted an amount of

Rs.20,60,55,675/-.

(iv) The Respondent No.1 claimed that Respondent No.1 is also

entitled to be member of the CoC of the Corporate Debtor. There

are only four creditors of the Corporate Debtor viz (i) Shristi

Infrastructure Development Corporation Limited; (ii) Shristi

Urban Infrastructure Development Limited (SUIDL); (iii) JSP

Tracomm Private Limited; and (iv) Housing and Urban

Development Corporation Limited (Respondent No.1). The

Resolution Professional refused to include HUDCO in the CoC on

the ground that HUDCO is a related party of the Corporate Debtor

under Section 5(24) of I&B Code.

(v) HUDCO filed an application being I.A. No. 514/KB/2022 before

the Adjudicating Authority seeking direction to include HUDCO

as member of the CoC. The said application was opposed by the

Resolution Professional and after hearing the parties, the said

application was allowed by the Adjudicating Authority vide its

order dated 30.08.2023 holding that HUDCO is not a related party

of the Corporate Debtor, hence, deserves place in the CoC and

Resolution Professional was directed to reconstitute the CoC.

(vi) Appellant aggrieved by the order dated 30.08.2023 filed Company

Appeal (AT) (Ins.) No.1687 of 2023 in this Tribunal, which appeal

Company Appeal (AT) (Insolvency) No. 376 of 2025 -4-

was dismissed as withdrawn upon submission of the Appellant

that Appellant intends to prefer an application before the

Adjudicating Authority.

(vii) Appellant thereafter filed an application being I.A.

No.693/KB/2024 before the Adjudicating Authority praying for

recall of order dated 30.08.2023. Respondent No.1 filed a reply

to the application. The Adjudicating Authority by impugned order

dated 20.12.2024 rejected the application. Aggrieved by which

order this appeal has been filed.

3. We have heard Shri Abhishek Anand, learned counsel for the

Appellant and Shri Ashok Kumar Jain, learned counsel appearing for the

Respondent No.1.

4. Learned counsel for the Appellant submits that HUDCO in Joint

Venture with Shristi Infrastructure Development Corporation Limited

(SIDCL) has incorporated Srishti Urban Infrastructure Development Ltd.

(SUIDL). In SUIDL, SIDCL has 60% shareholding and HUDCO has 40%

shareholding. The SUIDL has promoted the Corporate Debtor, hence,

HUDCO has control over the Corporate Debtor through SUIDL. HUDCO

has a Nominee Director in the Board of the Corporate Debtor to exercise

influences. It is submitted that while hearing the application filed by the

HUDCO being I.A. No.514/KB/2022, HUDCO did not disclose the Annual

Report of the HUDCO which has described the Corporate Debtor as its

subsidiary company. The Annual Report of the HUDCO being suppressed

Company Appeal (AT) (Insolvency) No. 376 of 2025 -5-

from the Adjudicating Authority, order dated 30.08.2023 was obtained by

playing fraud on the Court, hence, said order deserve to be recalled. The

Adjudicating Authority committed error in rejecting I.A. filed by the

Appellant for recall of the order.

5. Learned counsel for the Respondent - HUDCO refuting the

submissions of learned counsel for the Appellant submits that the issue as

to whether HUDCO is a related party of the Corporate Debtor or not has

been examined threadbare by the Adjudicating Authority in I.A.

No.514/KB/2022 and the Adjudicating Authority had after considering all

submissions made on behalf of the Resolution Professional for treating the

HUDCO as related party has rejected the submission and had held that

HUDCO is not a related party of the Corporate Debtor. The application

filed by the Appellant, who is Promoter of the Corporate Debtor is nothing

but an application to review the judgment dated 30.08.2023 which order

was passed after considering all submission and all materials on the

record. Appellant admittedly is related party of the Corporate Debtor. No

grounds have been made out to recall order dated 30.08.2023 and the

Adjudicating Authority has rightly rejected the application. Learned

counsel appearing for the Respondent has further contended that the

Annual Report of HUDCO on which reliance has been placed by the

Appellant has also been extracted by the Adjudicating Authority in the

impugned order which in no manner indicate that HUDCO has accepted

the Corporate Debtor as related party. The Corporate Debtor was

Company Appeal (AT) (Insolvency) No. 376 of 2025 -6-

mentioned as related party of Associate Company i.e., Srishti Urban

Infrastructure Development Ltd. (SUIDL).

6. We have considered the submission of learned counsel for the parties

and perused the record.

7. We need to first notice few details pertaining to the Appellant,

HUDCO, Corporate Debotr and JV Company i.e., Srishti Urban

Infrastructure Development Ltd. (SUIDL). Appellant and HUDCO entered

into Joint Venture Agreement on 02.05.2006 incorporating Srishti Urban

Infrastructure Development Ltd. The shareholding as per the Joint Venture

Agreement between the Appellant and the Respondent No. 1 for SUIDL was

in the proportion of 60:40. Corporate Debtor was promoted by Appellant

and SUIDL. The Corporate Debtor entered into a loan agreement with

HUDCO for an amount of Rs.6907.92 Lakhs. Under the loan agreement

HUDCO was empowered to appoint a Nominee Director. HUDCO exercised

its right and appointed a Nominee Director in the Board of the Corporate

Debtor.

8. A Section 10 application was filed by Sarga Udaipur Hotels & Resorts

Private Limited - the Corporate Debtor itself on 30.07.2021 for initiating

CIRP against the Corporate Debtor on which order was passed on

29.04.2022 by the Adjudicating Authority admitting CIRP against the

Corporate Debtor. The claim filed by the Respondent No.1 was admitted in

the CIRP. The Resolution Professional did not include the Respondent No.1

Company Appeal (AT) (Insolvency) No. 376 of 2025 -7-

in the CoC treating HUDCO to be related party on account of it being

promoter of Joint Venture Company - Srishti Urban Infrastructure

Development Ltd. which in turn was promoter of the Corporate Debtor. An

application was filed by the Respondent No.1 being I.A. No.514/KB/2022

seeking a direction to include the HUDCO as member of the CoC which

application was heard and allowed by order of the Adjudicating Authority

dated 30.08.2023. Appellant first filed an appeal against the said order

before this Tribunal which appeal was dismissed as withdrawn. Thereafter,

I.A. No.693/KB/2024 was filed. Prayers made in I.A. No.693/KB/2024 are

as follows:

"a) Invoke its inherent powers as vested under Rule 11 of National Company Law Tribunal Rules, 2016, and Re-call the Order dated 30th August 2023 passed in I.A.(IBC) No. 514/KB/2022 arising out of C.P.(IB) No. 202/KB/2021 and direct exclusion of the Respondent No. 1 from the CoC of the Corporate Debtor;

b) Pass/issue necessary order and/or orders directing the Respondent No.2/Interim Resolution Professional to restart Corporate Insolvency Resolution Process of the Corporate Debtor from the stage of constitution of Committee of Creditors after declaring all resolutions and/or decisions taken by the Committee of Creditors of the Corporate Debtor, which involved Respondent No. I as the lead member of the Committee of Creditor despite it being a related party. as null and void

Company Appeal (AT) (Insolvency) No. 376 of 2025 -8-

and consequently all such resolutions and/or decisions taken in such Committee of Creditors' meeting involving Respondent No. I should be immediately set aside by this Hon'ble Tribunal;

c) Pass/issue necessary order and/or orders staying any further Committee of Creditors' meeting and/ or staying all further functioning of the Committee of Creditor in respect of the Corporate Debtor and/or staying the passing of any resolution in any Committee of Creditors' meeting of the Corporate Debtor and/or taking any further decision by the Committee of Creditors of the Corporate Debtor till the adjudication of this instant application;

d) Ad-interim orders in terms of prayer (c) hereinabove and particularly ad-interim orders restraining Respondent No. l from exercising its voting rights in any Committee of Creditors' meeting of the Corporate Debtor till the adjudication of this instant application;

e) Issue appropriate direction to the Interim Resolution Professional/ Respondent No. 2 to include the Applicant as a member of the Committee of Creditors of the Corporate Debtor;

f) Pass such other and further order(s) and/or direction(s) 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;"

9. The Adjudicating Authority in the impugned order has noted the

grounds for recall of judgment passed by Tribunal and has referred to the

Company Appeal (AT) (Insolvency) No. 376 of 2025 -9-

judgment of this Tribunal in Union Bank of India vs. Dinkar T.

Venkatasubramanian & Ors. It is useful to extract Para 20 of the

judgment of the Adjudicating Authority, which is as follows:

"20. The issue of recall and review of a judicial order has received the consideration of the Hon'ble NCLAT in the matter of Union Bank of India Vs. Dinkar T. Venkatasubramanian and Ors. wherein it has been held that:

"20. The above judgments of the Hon'ble Supreme Court clearly lays down that there is a distinction between review and recall. The power to review is not conferred upon this Tribunal but power to recall its judgment is inherent in this Tribunal since inherent power of the Tribunal are preserved, powers which are inherent in the Tribunal as has been declared by Rule 11 of the NCLAT Rules, 2016. Power of recall is not power of the Tribunal to rehear the case to find out any apparent error in the judgment which is the scope of a review of a judgment. Power of recall of a judgment can be exercised by this Tribunal when any procedural error is committed in delivering the earlier judgment; for example; necessary party has not been served or necessary party was not before the Tribunal when judgment was delivered adverse to a party. There may be other grounds for recall of a judgment. Well known ground on which a judgment can always be recalled by a Court is ground of fraud played on the Court in obtaining judgment from the Court. We, for the purpose of answering the questions referred to us, need not further elaborate the circumstances where power of recall can be exercised.""

10. The submission which has been pressed by learned counsel for the

Appellant is that the Application filed by the Appellant was fully covered on

the ground that there was suppression on the part of HUDCO which lead

Company Appeal (AT) (Insolvency) No. 376 of 2025 -10-

to issuance of order dated 30.08.2023 which was obtained by HUDCO by

playing fraud on the Court. The submission is pressed on the ground that

Annual Report of the HUDCO was not placed by HUDCO when earlier

application was decided on 30.08.2023. In the application which was filed

by the HUDCO seeking direction to include it in the CoC, reply was filed by

the Resolution Professional and the Adjudicating Authority after hearing

HUDCO and the Resolution Professional decided the application on merit

rejecting the contention of the Resolution Professional for treating HUDCO

as related party within the meaning of Section 5(24) (h), (m)(i). The

Adjudicating Authority dealt with all contentions and held that HUDCO is

not a related party. The Adjudicating Authority while deciding the

application noticed all limbs of arguments raised by the Resolution

Professional to treat the HUDCO as related party including control of

HUDCO on Corporate Debtor through SUIDL which was JV promoted by

HUDCO. Admittedly, the Appellant is related party of the Corporate Debtor

which is an undisputed fact. All aspects of the matter including HUDCO

having promoted JV with Appellant where HUDCO has 40% shareholding

and Appellant has 60% shareholding has been noticed and examined by

the Adjudicating Authority in order dated 30.08.2023.

11. Learned counsel for the Appellant being aware of the limited scope of

recall has pleaded that the order was obtained by HUDCO by suppressing

relevant facts including Annual Report which reflect the Corporate Debtor

as related party.

Company Appeal (AT) (Insolvency) No. 376 of 2025 -11-

12. In the present case suppression of relevant document cannot be

accepted since all the document which were relevant for determination of

issues raised in I.A. No.514/KB/2022 were filed and relied by both the

parties i.e., HUDCO and Resolution Professional. It is not the case of the

Appellant that HUDCO was asked to file Annual Report in which it failed to

file. 51st Annual Report of HUDCO on which reliance has been placed by

the Appellant was filed with the ROC and is matter of public record. When

the report is filed with the ROC, there is no question of suppression of the

report and submission of the Appellant tat there was any suppression on

part of HUDCO is baseless.

13. In any view of the matter, 51st Annual Report of HUDCO has been

noticed by the Adjudicating Authority in Para 26 of the order and the

Report, in 'Related Party Disclosure' in Note 40 Item 32 Clause (a) has

mentioned as follows:

"Related parties Disclosure

(a) Associates (1) Shristi Urban Infrastructure Development Ltd.

(2) Pragati Social Infrastructure & Development Ltd.

(3) Signa Infrastructure India Ltd. (4) Indbank Housing Ltd."

14. Thus, 'Related Party Disclosure' in Item 32 Clause (a) does not

contain name of Corporate Debtor whereas name of SUIDL is mentioned at

Company Appeal (AT) (Insolvency) No. 376 of 2025 -12-

Serial No.1. Another part referred to is after Clause (f) containing heading

'In case of Associate Company:' where name of 'Sarga Udaipur Hotel &

Resorts Pvt. Ltd.' is mentioned as subsidiary of Associate Company which

action cannot lead to any admission that Corporate Debtor is related party

of HUDCO.

15. The Adjudicating Authority after considering all submissions of the

Appellant including 51st Annual Report, on which the Appellant has placed

reliance found no ground to recall order dated 30.08.2023. We fully concur

with the views expressed by the Adjudicating Authority while rejecting I.A.

No.693/KB/2024. There is no merit in the appeal. Appeal is dismissed.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical)

[Arun Baroka] Member (Technical)

NEW DELHI

25th March, 2025

Archana

Company Appeal (AT) (Insolvency) No. 376 of 2025