Mr. Inder Sain & Ors. vs PSA Impex Private Limited

PER: BACHU VENKAT BALARAM DAS, MEMBER (JUDICIAL)

This application has been filed by a group of 73 home buyers seeking initiation of CIRP against PSA Impex Private Limited, the Corporate Debtor, on the ground that the Corporate Debtor failed to complete and hand over possession of the project "Sampada Livia” within the stipulated time.

We have heard the arguments of the Ld. Counsel appearing for the Applicants and Respondent and also perused the records.

In light of the view taken by us in IA-3430/2025 which has been filed by SLB Welfare Association under Section 65 of IBC, 2016 whereby we have allowed the said application by holding that the present Applicant/Respondent in IA-3430/2025 have initiated the CIRP with a fraudulent and malicious intent other than the resolution of the Corporate Debtor.

Therefore, the present application filed under Section 7 has been dismissed.

Certified copy of this order may be issued, if applied for, upon compliance of all requisite formalities.

No order as to costs.

PER: BACHU VENKAT BALARAM DAS, MEMBER (JUDICIAL)

The present Application has been filed by the Applicant Association, SLB Welfare Association, under Section 65 of the Insolvency and Bankruptcy Code, 2016. The Applicant seeks the following reliefs:

The Applicant is an Association of home buyers duly registered under the Societies Registration Act, 1860, on 13/03/2019, of a project namely "Sampada Livia” project. The Applicant-Association represents 228 Home Buyers out of 355 sold Flats (total 726 Flats), is developing "Sampada Livia' Project situated at GH-6/B, CHI-V, Greater NOIDA, Uttar Pradesh (Project) under the direction and supervision of Ld. Uttar Pradesh Real Estate Regulatory Authority [UPRERA].

It is stated that the Ld. UPRERA vide order dated 06.06.2020 has directed the Applicant-Association to develop the project "Sampada Livia' since the registration of the Corporate Debtor was canceled by Ld. UPRERA on 30.09.2019. It may be mentioned that the Corporate Debtor, i.e., PSA Impex Private Limited took the land admeasuring 20,032 Square meters situated at GH-6/B, CHI-V, Greater NOIDA, Uttar Pradesh, on lease and launched the "Sampada Livia” project comprising 726 Flats in 10 Towers of 24/25 Floors each in the year 2012 and was scheduled to be completed within 36 months.

The Corporate Debtor abandoned the project in the year 2016-2017 after carrying out 10% construction work in some Towers. The home buyers, therefore, approached the Ld. UPRERA by filing a complaint against the Corporate Debtor for violations of the Builder Buyer Agreement. This led to the passing of an order by the Ld. UPRERA on 06.06.2020, whereby the Ld. UPRERA directed the Applicant-Association to carry on and complete the work of the project "Sampada Livia”.

The Applicant-Association has therefore contended that it has full authority to construct and complete the project in question by virtue of the directions of Ld. UPRERA passed on 06.06.2020 and therefore, the IB-101/(ND)/2025 filed under Section 7 of the IBC, 2016 by a group of home buyers is misconceived and no CIRP can be initiated against the Corporate Debtor inasmuch as the Corporate Debtor is not in possession of any assets or much less the project in question.

It is therefore submitted that the Section 7 application filed by Mr. Inder Sain & 72 Ors., is with fraudulent and malicious intent and liable to be dismissed.

The Respondent, i.e., the group of home buyers who are seeking to initiate CIRP by filing Section 7 application i.e. IB-101/(ND)/2025 though have not chosen to file a reply affidavit but the Ld. Counsel representing them advanced oral arguments and submitted that the Applicants in the Section 7 application have the threshold for filing Section 7 application. Further, the Corporate Debtor has failed to adhere to the timelines and complete the project within 36 months as per the Builder Buyer Agreements and even though the Applicants have paid the consideration amount.

The Ld. Counsel for the Respondent contended that the present application filed under Section 65 is a repetition of earlier IA i.e. IA-2192/2025 and most of the facts and grounds in the said application have been repeated in the present application as well.

Further, the Applicant has not raised any fresh cause of action or new grounds for filing the present application. The Ld. Counsel also submitted that the Applicant-Association has no locus to file the present application as it is claiming rights on the basis of an order passed by the Ld. RERA under Section 8 of the RERA Act, 2016 and the said order cannot have any over-riding effects over the IBC proceedings.

Ld. Counsel, therefore, submitted that the present application filed under Section 65 should be dismissed. We have heard the submissions of the Ld. Counsel appearing on behalf of the Applicant as well as the Respondent.

It is not disputed by the parties that the Corporate Debtor, i.e., PSA Impex Private Limited, failed to complete the construction and deliver possession to the home buyers within the stipulated time of 36 months as per the Builder Buyer Agreement entered into with the home buyers.

Accordingly, the Ld. UPRERA vide its judgment and order dated 30.09.2019, revoked the registration of the project "Sampada Livia” promoted by PSA Impex Private Limited. Consequently, the home buyers filed a complaint before the Ld. RERA and the Ld. RERA vide order dated 06.06.2020 passed an order directing the Applicant Association to take over the possession of the project from the Corporate Debtor and develop the said project. It is on record that the present Applicants/home buyers of the Section 7 Application were also parties before the Ld. RERA.

In the proceedings before the Ld. RERA, the Applicant-Association submitted a proposal to the Ld. RERA to complete the balance development work along with a detailed project report (DPR) for the revival of the project "Sampada Livia”. The Ld. RERA after considering the proposal submitted by the Applicant-Association vide its order dated 06.06.2020, authorized the Applicant-Association for undertaking the completion of the remaining development and construction work of the project, in exercise of its powers under Section 8 read with Section 37 of the RERA Act, 2016 and Rules and Regulations made thereunder.

Therefore, there is nothing on record to show that the said order dated 06.06.2020 was either quashed or set aside by any higher Court. The Applicant-Association is carrying out the construction and development work of the project in accordance with the directions of the Ld. RERA.

From the perusal of the order dated 06.06.2020 passed by Ld. RERA, it is crystal clear that the Applicant-Association has been given full authority to complete the project and the Corporate Debtor is not involved in the development and construction process in any manner whatsoever.

Moreover, the registration of the Corporate Debtor has also been canceled by the Ld. RERA way back in 2019, which has also been upheld by the Ld. Real Estate Appellate Tribunal, Lucknow vide order dated 20.10.2020, by the Hon’ble Allahabad High Court vide order dated 09.03.2021 and also by the Hon’ble Supreme Court of India vide order dated 02.02.2024.

Further, it is not disputed by the Respondents (the Applicant in IB-101/(ND)/2025) that they were parties before the Ld. RERA Authority in the complaint filed by certain home buyers and had full knowledge about the order passed by the Ld. RERA authorizing the present Applicant-Association to complete the project in question.

We are therefore of the view that the Section 7 application, i.e., IB-101/(ND)/2025, has been filed with fraudulent and malicious intent and not for the resolution of the Corporate Debtor.

We are therefore inclined to allow the prayers in IA-3430/2025. However, we do not propose to impose any penalty, keeping in view the fact that the Applicants in IB-101/(ND)/2025 are the home buyers.

Certified copy of this order may be issued, if applied for, upon compliance of all requisite formalities.

No order as to costs.