Boorugu Infra Projects Private Limited & Anr. vs Mr. Birendra Kumar Agarwal & Ors.

Per : Justice Sharad Kumar Sharma, Member (Judicial):

Heard Ld. Counsel for the parties with their consent.

The Company Appeal is being decided finally, at this stage.

The Company Appeal is accompanied with a Condone Delay Application, where the Appellant has sought a condonation of 12 days of delay that, has chanced in preferring the Company Appeal, by filing IA No. 1121 / 2025.

According to the pleadings raised by Appellant there happens to be 13 days of delay that has chanced in preferring the Appeal, which has been otherwise reported by the Registry to be 12 days.

Having considered the reasons which has been given, particularly on the ground that the impugned order itself was uploaded on 27.03.2025 and 30 days from the said date i.e. 27.03.2025, would be expiring on 26.04.2025 and as the Company Appeal was preferred on 07.05.2025, the number of days of delay that, has chanced will be falling well within the upper time limit of 45 days as prescribed under the proviso to sub-section (2) of Section 61 of I & B Code, 2016. Thus, owing to the reasons, which has been given in Para Nos. 3.2 & 3.3, since being satisfactory, the 12 days of delay that has chanced in preferring the Appeal would stand condoned.

The controversy at hand, takes its birth from an order that, was passed by the Ld. NCLT-II, Hyderabad, on IA (IBC) / 439 / 2025 which was preferred in CP (IB) No. 296 / 7 / HDB / 2022. The consequential effect of passing of the impugned order was, that the Interlocutory Application, which was thus preferred by the Appellant, allegedly invoking the provisions contained under Section 60(5) of I & B Code, 2016, to be read with Rule 11 of the NCLT Rules, 2016, was rejected, on the ground that the Appellant / Applicant, since not being Resolution Applicant, has no locus standi to raise the objection, that applications filed by an unsuccessful Resolution Applicant i.e. M/s. Vasavi Realty and the Applicant, challenging the Resolution Plan have already been dismissed, and that no grounds have been made out to show that there is a violation of provisions of Section 30(2) of I & B Code, 2016, in the process of approval of the Resolution Plan.

Brief facts, which engage consideration are;

(i). That the Corporate Debtor i.e. M/s. Manjeera Retail Holdings Private Limited, was admitted to the CIRP proceedings by an order that, was passed on 18.07.2023, Form A inviting submission of claims was issued on 21.07.2023 and Form G calling for Expression of Interest (EoI) was published on 22.09.2023.

In the Interlocutory Application IA (IBC) / 439 / 2025, preferred before Ld. NCLT, the Applicant had contended that he was unable to complete the due diligence process, within the stipulated prescribed time frame, owing to sheer size and complex structure of the Corporate Debtor (CD), and that his request for extension of time for submitting the Resolution Plan was rejected. Further, he had submitted that, before the CIRP process, the Corporate Debtor had entered into an agreement for sale with Neha Kausar Hafeezunnisa Begum, Srinivas Kalluri, Rajni Kalluri and M.V.M. Mohan and received the entire payment, but, could not execute the Sale Deed, because of disputes between the Corporate Debtor and Telangana State Housing Board (TSHB) that subsequent to the filing of the Application for seeking approval of the Resolution Plan i.e. IA (IBC) (Plan) No. 8 / 2024, these purchasers who could not get the title of the units purchased, transferred in their name due to the prevailing dispute between the Corporate Debtor and Telangana State Housing Board, approached Ld. Adjudicating Authority by filing IA No. 384 / 2024, IA No. 971 / 2024 & IA No 1815 / 2024, for redressal of their grievances. All these Interlocutory Applications were disposed of by the Ld. Adjudicating Authority, with a direction to the Resolution Professional to include the liabilities of the Corporate Debtor towards the said Applicants, in the Information Memorandum and if it is already included, to inform the Applicants about the same within 7 days from the date of passing of the order. However, despite of the aforesaid directions, the Respondent No. 1, failed to incorporate the aforesaid liabilities and disputes to update the Information Memorandum which effectively prevented him from formulating a viable Resolution Plan, as these informations were critical in nature.

He had further contended that, in view of the aforesaid short coming in the Information Memorandum of the CIRP process was vitiated and hence, had prayed for declaring the action of RP / 1^st Respondent in not revising the Information Memorandum dated 19.01.2024 in terms of directions issued in orders dated 11.06.2024, 17.09.2024 and 13.02.2025 rendered in IA No. 384 / 2024, IA No. 971, 972, 492 & 314 / 2024 and in IA No. 1815 / 2024 respectively, as contrary to I & B Code, 2016, and to set aside the CIRP process from the stage of issue of Information Memorandum (IM) and to direct the RP to issue revised IM and to call for fresh Resolution Plans.

When the said Interlocutory Application IA (IBC) / 439 / 2025 came up for consideration before the Ld. Adjudicating Authority, the Resolution Professional took a specific stand that the Applicant i.e. the Appellant herein, have not approached the Tribunal with clean hands and that by instituting the present Interlocutory Application, he is indirectly attempting to obtain the relief that, he was unable to secure directly, that following the disposal of the IAs referred to therein, the Successful Resolution Applicant (SRA) was duly informed to incorporate the same in its Resolution Plan and he has undertaken to comply with the directions of Ld. Tribunal, the liabilities in question were already disclosed in the financial statements, which formed to be the integral part of the Information Memorandum, and that the Information Memorandum was prepared with due diligence and care and that in any case, PRAs were expected to conduct their own due diligence on the assets and liabilities of the Corporate Debtor.

The Successful Resolution Applicant, on his part had submitted that M/s. Vasavi Realty, had also filed IA (IBC) / 773 / 2024, challenging the Resolution Plan which was dismissed on 11.06.2024, and that in the said Application, the Applicant herein had filed an Intervention Petition No. 20 / 2024, seeking themselves to be impleaded so as to be able, challenge the approval of the Resolution Plan of the SRA which was also dismissed by the Ld. Adjudicating Authority on 13.06.2024.

He had further stated that the Appellant herein, had preferred two Company Appeals being Company Appeal (AT) (CH) (INS) No. 342 / 2024 & Company Appeal (AT) (CH) (INS) No. 343 / 2024, as against the dismissal of the above two Applications, which were heard by this Appellate Tribunal and decided together by the Judgment dated 20.12.2024, in which the Appeals were dismissed.

The Ld. Adjudicating Authority, after hearing both sides had recorded in its findings that the Appellant was shortlisted as a PRA, that he failed to submit his Resolution Plan within stipulated deadline of 18.03.2024, that almost a year later, when the Resolution Plan is reserved for orders, he has prayed for issue of fresh Form G on the grounds of the Information Memorandum being incomplete and defective, that the so-called defects in Information Memorandum are not material enough to warrant issue of Form G afresh, that no grounds have been made out to show violation of Section 30(2) of I & B Code, and that the Appellant / Applicant has no locus to challenge the Resolution Plan, not being a Resolution Applicant and having got his Application before NCLT and his Appeal before NCLAT, challenging the Resolution Plan rejected and accordingly proceeded to dismiss the said Application i.e. IA (IBC) / 439 / 2025.

We have heard the Appellant and the Respondents. It is to be noted that we have already dismissed the Company Appeals being Company Appeal (AT) (CH) (INS) No. 342 / 2024 & Company Appeal (AT) (CH) (INS) No. 343 / 2024, what we would be concerned more at this stage is, the order that was passed in Company Appeal (AT) (CH) (INS) No. 342 / 2024. In Company Appeal (AT) (CH) (INS) No. 342 / 2024, the Appellant has challenged the impugned order of 13.06.2024, by virtue of which, the Intervention Petition preferred by the Applicant, being IA No. 20 / 2024 as preferred in CP (IB) No. 296 / 7 / HDB / 2022, had been rejected. When this Company Appeal came up for consideration before us, we had considered the controversy in its entirety, particularly from the view point as to what right did the Appellant have so as to make him the necessary party to intervene in the said Company Petition and had come to the conclusion holding thereof that, the Appellant under the given facts would have no right, for reason being that, the revised plan that, was submitted by the Appellant was already rejected and the rejection of the plan has not been challenged and that order of rejection of plan has attained finality.

The relevant observations that were made by us, while dismissing the two Company Appeals preferred by the Appellant by the Judgment dated 20.12.2024 are extracted hereunder:

As far as the Judgment rendered by us on 20.12.2024 in Company Appeal (AT) (CH) (INS) No. 342 / 2024 & Company Appeal (AT) (CH) (INS) No. 343 / 2024 is concerned, it is not the case of the Appellant that, the said Judgment was ever challenged by him before the Hon’ble Apex Court and hence, we have to proceed on the premise that, the order of Ld. NCLT rejecting the prayer of the Appellant to permit him to intervene in the Company Petition deciding on the Resolution Plan which was affirmed by us on 20.12.2024, has reached finality and therefore, as of now, the Appellant would not have any locus as such, to again challenge the same Resolution Plan in the garb of alleging deficiencies and short comings in the Information Memorandum by filing an IA (IBC) No. 439 / 2025 which has rightly been rejected by Ld. NCLT,

There would be a few reasons, as to why the Appellant does not have any locus on the controversy as such which are given below:-

This Tribunal finds no occasion or ground to differ from the stand taken by the Ld. NCLT that it cannot interfere or question the commercial wisdom of CoC and remit the Resolution Plan for reconsideration unless there are express violation of Section 30(2) of I & B Code, 2016. Further it is seen that the information gaps has not impacted the Resolution Plan. The new information, as attempted to be imparted by the Appellant of certain units having been already sold off will have the effect of reducing asset value of Corporate Debtor. In normal circumstances, this would reduce the Resolution Value. But, since the SRA has acknowledged the liability, there is no need to reconsider the Resolution Plan approval process. Thus, under the given set of facts and circumstances, the proceedings resorted to by the Appellant, seeking for a re-run of the Resolution Process under garb of a faulty Information Memorandum appears to have been done with the mala-fide intent to derail the process, especially when the rights of the Appellant, to intervene in the said process have already been determined in a negative by the earlier Judgments rendered by the Ld. Tribunal and this Appellate Tribunal.

In that eventuality, when the Appellants, has no right and are not likely to be adversely affected by any orders to be passed on the Resolution Plan submitted by the SRA / Respondent No. 3, the Appellant would have to be taken as to be altogether an intruder to the proceedings and he would not be, at all required to be heard or be treated to be affected by the impugned order, which has been passed on 26.03.2025, holding that, the Application IA (IBC) No. 439 / 2025 at the behest of the Appellant would not be maintainable, because, the Appellants Intervention Petition has been rejected by the Order of 13.06.2024, and affirmed by this Appellate Tribunal and because, the Appellant would not be the necessary party for the purposes of filing of the said Application, besides also because he was not even an unsuccessful Resolution Applicant.

Owing to the aforesaid, the Company Appeal (AT) (CH) (INS) No. 379 / 2025, lacks merit and the same is accordingly dismissed. All pending Interlocutory Applications are closed.