Ram Kishore Arora vs Bank Of Maharashtra & Anr.

Ashok Bhushan, J.

These three applications have been heard together and are being decided by this common judgment.

Before we notice the prayers in the above applications, we need to notice background facts and sequence of the events leading to filing of the above applications:

On an application filed by the State Bank of Maharashtra under Section 7, vide order dated 12.06.2024, Corporate Insolvency Resolution Process (CIRP) against the corporate debtor commenced.

This appeal by suspended director of the corporate debtor has been filed challenging the order dated 12.06.2024. This appeal was heard on 03.07.2024, and after submission of counsel for the parties, we passed interim order and issue notices. Paragraph 10 of the interim order is as follows:

Prior to initiation of the CIRP process, the corporate debtor has launched a project at Plot No. 3, Sector 94, Noida, namely Nova Residence (East and West).

Builder Buyers Agreement (BBA) were entered into between the allottees and corporate debtor in the year 2011–12. The project was also registered with UP Real Estate Regulatory Authority as Supernova Phase I, spread into 15, 985 sq. mt.

Occupancy certificate was issued by Noida Authority on 18.07.2018 and several homebuyers/allottees were handed over possession.

Certain registrations were issued with respect to some of the homebuyers during the year 2018–20.

The corporate debtor by an Agreement dated 15.09.2019 nominated M/s. YG Estates Facilities Management Private Limited (hereinafter referred to as ‘YG Estates’) as maintenance agencies for all the projects of the company.

In pursuance of Agreement dated 15.09.2019 entered between the corporate debtor and YG Estates, YG Estates have been carrying out maintenance of the project, including the Supernova East and West.

Homebuyers of Real Estate Project supernova formed an association, namely, Supernova Apartments Owners Association and got it registered with Registrar Society, Uttar Pradesh vide registration dated 27.05.2023.

I.A.8083/2024 was filed by Supernova Apartments Association (hereinafter referred to as ‘Association’) praying for a direction for handing over maintenance and IFMS charges to the association upon preparation of an inventory and inspection of all deficiency thereafter.

I.A.8083/2024 filed by association came for consideration before this Court on 21.11.2024, on which date this Tribunal directed the Interim Resolution Professional (IRP) to obtain instructions and file a reply to the application.

On 10.12.2024, YG Estates sought liberty to file an intervention application.

I.A.8083/2024 came for consideration on 19.12.2024. Learned counsel for the IRP submitted that it has no objection with the prayers made by association. This Tribunal by an order dated 19.12.2024 has allowed the application.

In pursuance of the order passed by this Tribunal on 19.12.2024, the meeting was convened of the homebuyers on 31.12.2024, in the office of IRP, in which Chief Executive Officer (CEO) of the YG Estates members of the Association and IRP were present. YG Estates stated that in compliance and mutual discussion and the settlement with association, it has agreed to handover the maintenance to the association on 31.01.2025.

After the minutes of meeting were issued on 04.01.2025, the association wrote to the CEO of YG Estates about the outstanding liabilities of electricity bills, water bills, etc. on 27.01.2025 and requested it to clear the same.

On 30.01.2025, YG Estates filed an I.A.799/2025, seeking a clarification of the order dated 19.12.2024, and seeking a direction to IRP and homebuyers to take into account the investment made an outstanding amount due and payable to the YG Estates under the Facilities Management Agreement.

On 31.01.2025/01.02.2025, when maintenance facility was to be handed over, dispute arose between the association and the YG Estates. YG Estates refused to handover maintenance to the Association. Association has to call Police Authorities, including the City Magistrate. In wake of law and order situation created on the spot with respect to handing over maintenance to the association.

On 01.02.2025, a letter was written by CEO to the City Magistrate, Noida that YG Estates facility is willing to handover the facilities as per the order dated 19.12.2024 on 01.03.2025. CEO raised the issue of outstanding dues before handover.

I.A.799/2025 came for consideration on 03.02.2025 when this Court directed the YG Estates to implead the homebuyers.

Another I.A. was filed by YG Estates being I.A.1341/2025 on 18.02.2025, praying for recall of the order dated 19.12.2024. This Tribunal vide order dated 03.03.2025, recalled the order 19.12.2024, revived the I.A.8083/2024, granted YG Estate to file a reply to the I.A.8083/2024. All the applications were directed to be listed on 05.03.2025. In the meantime, on 31.01.2025, another I.A.892/2025 has been filed by Rakesh Gupta claiming to be homebuyer of another project of the corporate debtor SPIRA who claimed to be authorised by 10 homebuyers of the SPIRA seeking intervention in I.A.8083/2024 and to be impleaded in Company appeal. All the applications were heard by this Tribunal on 05.03.2025 on which date orders were reserved.

We have heard Mr. Govind Jee learned counsel appearing for Association. Learned Sr. counsel, Mr. Krishnendu Datta has appeared for the YG Estates. We have heard Ms. Sangeeta Bharti in I.A.892/2025. Mr. Abhijeet Sinha Sr. Advocate has appeared for the appellant. We have also heard Ms. Anju Agarwal IRP appearing in person.

Learned counsel appearing for the association submits that applicant in I.A.8083/2024 is a registered association of the homebuyers of Supernova Apartments Owners which has been registered on 27.05.2023. It is submitted that after association of the applicant association having been registered, applicant wrote to YG Estates, corporate debtor and the Noida Authority for handing over the maintenance to the registered association, who is entitled to carry on the maintenance as per the Uttar Pradesh Apartment (Promotion of Construction, Ownership and Maintenance) Act, 2010. It is submitted that on the complaint which have been made by the appellant to the Noida Authority, Noida Authority also wrote to the YG Estates to do the needful, but the maintenance was not handed over. There being several deficiencies in the maintenance by YG Estates, association has brought into the notice of the IRP and requested the IRP to take steps for handing over the maintenance to the association. It is submitted that Noida Authority wrote a letter dated 19.12.2024 to the corporate debtor. The joint meeting was held on 31.12.2024, where YG Estates through its CEO was present and had agreed to handover maintenance to the association with effect from 31.01.2025. However, on the date of handover, the YG Estates refused to handover and created law and order situation on the spot. It is submitted that advance maintenance has been taken by YG Estates from several homebuyers. It is submitted that YG Estates cannot continue to carry on the maintenance after formation of the association. Both corporate debtor and YG Estates, which is nominee of the corporate debtor are bound to handover maintenance to the association after Registration Act of YG Estate is contrary to the statutory provisions. Learned counsel appearing for the association further submits that YG Estates having agreed to handover maintenance in the joint meeting dated 31.12.2024 has mala fidely filed the application on 31.12.2024 being I.A.799/2025, which is nothing but an attempt to create obstacle in the handing over of the maintenance. The claim of various amount due from the homebuyers as stated in the I.A.799/2025 are not correct. Advance payments have been taken by the YG Estates from several homebuyers, which need to be accounted for. Homebuyers have already informed that they are ready for reconciliation of the accounts between the YG Estates and the homebuyers.

Learned Sr. counsel, Mr. Krishnendu Datta appearing for the YG Estates, opposing the submissions submits that in I.A.8083/2024 filed by association the YG Estates is not liable to hand over maintenance to the association. It is submitted that application filed by association is not maintainable in this Tribunal. This appellate forum is not appropriate forum to adjudicate the claim of the association which falls in the domain of civil dispute outside the purview of Insolvency and Bankruptcy Code, 2016. Appellate Tribunal does not have jurisdiction to enforce the rights of association. Contractual disputes fall outside the jurisdiction of appellate Tribunal. Learned counsel for the YG Estates relied on the judgment of the Hon’ble Supreme Court in the matter of ‘Tata Consultancy Services Ltd.’ Vs. ‘S.K. Wheels Pvt. Ltd. Resolution Professional, Vishal Ghisulal Jain’ reported in (2022) 2 SCC 583. It was further contended that association is not as per the UP Apartment Act 2010. It is submitted that the Supernova projects comprise several towers, namely Nova East, Nova West, SPIRA, ASTRALIS. The project has been approved by the single project with composite plan approved by the Noida Authority. Nova East and Nova West collectively have 582 units, SPIRA in totality has 828 units and ASTRALIS has 755 units. It is submitted that association can only be validly constituted once at least 33% of the apartment within the project are handed over to the homebuyers. In the present case, only 27% of the total project has received occupancy certificate from Noida. It is submitted that no Completion Certificate has yet been obtained, which is must for praying for filing an application for registered association. Learned Sr. counsel Mr. Krishnendu Datta has, however, submits that although YG Estates has agreed to handover the maintenance to the association in the meeting dated 31.12.2024, but such handover was subject to condition that outstanding dues of YG Estates are cleared before hand over the possession, referring to a letter dated 01.02.2025 written by CEO of YG Estates to the City Magistrate, it is contended that the said letter also highlights the outstanding dues of YG Estates payable by homebuyers. Learned Sr. counsel Mr Dutta submits that still the YG Estates have no objection to in handing over maintenance provided its all dues on the homebuyers, which are ₹2,60,14,603/- as on 03.01.2025 are paid. It is submitted that I.A.799/2025 has been filed by the YG Estates to protect its interest.

Learned counsel appearing in I.A.892/2025 submits that applicant is also a homebuyer of another project. Maintenance of SPIRA is still continued by the YG Estates. It is submitted that association does not consist of all homebuyers. Homebuyers of SPIRA are not part of the association.

IRP appearing in person submits that YG Estates cannot resist the handover of the maintenance to the association. Association does not want services of the YG Estates. YG Estates cannot force itself on the association for purposes of maintenance. IRP further submits that in the present case by interim order of this Tribunal, the CoC has not yet been constituted, which committee be constituted so that IRP may obtain various approval from the CoC with regard to several issues.

We have considered the submissions of counsel for the parties and perused the record.

All the applications being on the same subject matter have been heard together and are being decided by this common judgment.

The corporate debtor, Supertech Realtors Private Limited has entered into a Maintenance Agreement between YG Estates Facilities Management Private Limited on 15.09.2019. The copy of the Agreement has been filed by the YG Estates along with I.A.799/2025. Clause C of the Agreement mentions about the YG Estates as maintenance agency for all the projects of the company. Clause C is as follows:

The above Agreement as noted above executed by the corporate debtor and was referred to as irrecoverable in which paragraph 1.1 following was stated:

The YG Estates is continuing as maintenance agency in pursuance of the above Agreement with the corporate debtor Supernova project consisting of towers, East and West is also part of the Maintenance Agreement. Association got registered under the provision of Society Registration Act, 1860, with Registrar Uttar Pradesh, as “Supernova Apartment Owners Association by registration dated 27.05.2023”. Thus, association is association within meaning of Uttar Pradesh Apartment (Promotion of Construction Ownership and Maintenance) Act, 2010. Section 14 of the Act provides for the registration of the association. Section 14(1) provides for association of apartments owners for the administration of affairs in relation to apartment Owners and the property appertaining thereto. Sections 14(1), 14(2), 14(3), 14(4) & 14(5), which are relevant for the present case are as follows:

Learned counsel for the association has also relied on the provisions of Section 4, which provides for duties and liabilities for promoter. Sections 4(6) & 4(7) are as follows:

Association has after forming of the association has written to the YG Estates as well as to the Noida Authority praying for directions to the YG Estates to handover the maintenance to the association. The Noida Authority in this reference has written a letter to the corporate debtor noticing the complaint of the association and directing the corporate debtor to do the needful.

We have noticed above that Mr. Dutta appearing for the YG Estates have raised the submission that application filed by the association is not maintainable in this appeal and further this Appellate Tribunal has no jurisdiction to entertain the issues raised by the association. It is contended that the contractual disputes between the parties are beyond the jurisdiction of IBC and parties may be left free to take their appropriate remedies.

We need to consider the above objection before we proceed to enter into other submissions. The present is a case where CIRP has been commenced against the corporate debtor by order of the NCLT dated 12.06.2024. It is an admitted position that project in question i.e., Supernova project is the project of the corporate debtor. CIRP having been commenced, the project is clearly in the purview of the CIRP and assets of the corporate debtor. In the interim order which we have passed on 03.07.2024, we have directed “however, the ongoing project maybe continued under the supervision of the IRP and IRP shall be extended all cooperation by the corporate debtor, its officers and employees in carrying out the construction”.

The IRP in the scheme of the IBC is also under Section 18(d) & 18(f) has statutory obligations to the following effect:

The YG Estates is an agency appointed by corporate debtor for carrying out the maintenance. Entitlement of YG Estates to carry out the maintenance flow from Agreement executed by corporate debtor in its favour, which Agreement was prior to commencement of the insolvency. After insolvency commencement date, the management of the corporate debtor stands suspended and it is the IRP who is entitled to carry on and manage the operation of the corporate director. When the Supernova project (East and West) are part of the assets of the corporate debtor, for which maintenance agencies is the YG Estates, it does not appeal to the reason that management of said project including the its maintenance is beyond the purview of the IRP. The corporate debtor having been put in the insolvency and IRP being on the helm of the affairs, all aspects of the assets of the corporate debtor are within the domain of the IRP. If IRP has jurisdiction to manage the operations that includes the looking after security, maintenance of the assets, we are not persuaded to accept the submission of Mr. Dutta that Maintenance Agreement executed in favour of YG Estates is beyond the insolvency process and this Tribunal has no jurisdiction to consider an issue which has been raised with regard to maintenance of projects. Section 60(5)(c) couched in a wide term covering any question arising out of or in relation to the insolvency resolution of the corporate debtor. Against the corporate debtor, insolvency resolution process has commenced and the IRP being in charge of all affairs of the corporate debtor, including its assets, including Supernova projects, we are of the view that IRP has jurisdiction to look into the maintenance. It is on the record that IRP after receiving complaints from the association has already issued show cause notice to the YG Estates and IRP has also clearly supported the association insofar as handing over the maintenance by the association is concerned.

Learned counsel for the appellant has relied on the judgment of the Hon’ble Supreme Court in ‘Tata Consultancy Services Limited’ (Supra). Tata Consultancy was a case where no services or goods were provided by the Tata Consultancy Services to the corporate debtor and Tata Consultancy Services has terminated the Facility Agreement vide its notice on termination dated 10.06.2019 i.e., subsequent to insolvency commencement on 29.03.2019. The corporate debtor filed an application before NCLT where interim order was passed staying the termination. NCLT also dismissed the appeal of Tata Consultancy against which the matter was taken in the Hon’ble Supreme Court. It was pleaded on behalf of the Tata Consultancy that appellant is not supplying any goods or services to the corporate debtor nor it is recovering any property. Hon’ble Supreme Court has noticed the said in paragraph 26 of the judgment which is as follows:

In paragraphs 27 and 28, Hon’ble Supreme Court lays down as follows:

It was held by the Hon’ble Supreme Court that residuary jurisdiction of NCLT cannot be invoked if the termination of the contract is based on grounds unrelated to the insolvency of the corporate debtor. The present is a case where it was corporate debtor prior to initiation of CIRP, who has appointed the maintenance agency, which, according to the appellant and the IRP are related party of the corporate debtor. Under the BBA, corporate debtor has taken responsibility to provide maintenance either by itself or by agency nominated, hence the YG Estates was providing services to the corporate debtor and was receiving maintenance charges. The judgment of the Hon’ble Supreme Court in ‘Tata Consultancy Services Ltd.’ (Supra) has no application in the facts of the present case whereas issue in the present case pertaining to the project of the corporate debtor, which is part of the insolvency process. YG Estates is claiming to provide services to units of the corporate debtor. It is true that maintenance charges were being paid to the corporate debtor/YG Estates which was labelled as per the BBA in the form of Interest Free Maintenance Deposit and maintenance charges, which was payable by unit holder to the corporate debtor towards maintenance. Maintenance of the units under the project of the corporate debtor cannot be said to be a matter outside the insolvency of the corporate debtor. We, thus are not persuaded to accept the submission of Mr. Dutta that issues raised by the homebuyers in I.A.8083/2024 is beyond the purview of the IBC. We, thus do not find any substance in submission of Mr. Dutta that application filed by homebuyers is beyond jurisdiction. It is further relevant to notice that on the one hand, YG Estates is arguing that this Tribunal has no jurisdiction but on the other hand, it has prayed for various reliefs in I.A.799/2025. At this stage, we need to notice the prayers made in I.A.8083/2024, which are as follows:

Prayers in I.A.799/2025 are to the following effect:

We have already noted the submissions, the provisions of Uttar Pradesh Apartment (Promotion of Construction, Ownership and Maintenance) Act, 2010, which contains the statutory obligation on the promoter and apartment owners to form an association. Section 14(2) clearly provides that it shall be the joint responsibility of the promoter to form an association and it is the promoter to get the association registered. Admittedly, the association has been registered according to Society of Registration Act 1860, on 27.05.2022 copy of the Registration Certificate has been brought on the record as Annexure A–6 to the I.A.8083/2024. The submission which has been sought to canvas by Mr. Dutta is that 33% of the apartments have to be there for forming an association. It is submitted that the number of unit holders in project Supernova East and West are only 582 and the Occupancy Certificate has been issued only for 27% of the total project. Hence, the condition as provided in sub-Section (2) of Section 14 was not fulfilled for registration of the association.

We are of the view that the association having been registered and the registration of association still being valid it is not open for the YG Estates to contend that registration of association is not in accordance with the law. The issue with regard to non-fulfilment of the necessary conditions for registration of association cannot be allowed to be raised in this proceeding nor can it be examined in these applications. When the association has been registered, it has to be presumed that registration was made after compliance of all necessary requirement. We, thus are unable to accept the submission of Mr. Dutta, that registration of association is not in accordance with law.

We have also noticed the provisions of Section 4 of the 2010 Act. Section 14(5) provides that on formation of the association of the apartment owners under section sub-Section (2) above, the management of the affairs of the apartments regarding their common areas and facilities shall be deemed to be transferred from the promoters to the association which shall thereupon maintained them. Thus, the law clearly envisaged, handing over possession, handing over common area and facilities to the association after registration of association. When the statute obliged the promoter to handover the facilities to the association and there is deeming fiction, we are of the view that YG Estates which is nothing but a related party to the corporate debtor and agency nominated by the corporate debtor to carry out the maintenance cannot refuse handover such maintenance to the association.

It is further relevant to notice that in the joint meeting held on 31.12.2024 between the association, YG Estates. YG Estates agreed to the handover maintenance to the association. Copy of the minutes of 31.12.2024 has been brought on record by association in its reply to I.A.799/2025, at page 145, which is to the following effect:

The association has also brought on record its Agreement with M/s. Garrison Securities Ltd. dated 25.01.2025 for security and another entity for maintenance with M/s. Squad Prime Services dated 31.01.2025. The submission which has been raised by Mr. Dutta is that there are amounts due on the members of association i.e., the homebuyers owed to the YG Estates. It is submitted that in I.A.799/2025 details of outstanding amounts have been brought on record. Learned counsel for the association submits that YG Estates has also collected the advance payment from several homebuyers upto December 2025. It is further submitted by association that the YG Estates have not cleared the electricity bills and other charges which were required to be cleared by the YG Estates, reference to a bill dated 03.01.2025 has been made where payable amount of electricity by Pashimanchal Vidyut Vitran Nigam Ltd. is mentioned as Rs.2,27,63,197/-. It is submitted that YG Estates have not cleared its various statutory liabilities which was to be paid by itself.

We are of the view that in these proceedings, the issues pertaining to outstanding of YG Estates or any amount accepted by YG Estates cannot be gone into or decided. We are of the view that such issues can be raised before the IRP who is overall in charge of all projects and management. It is for IRP to take call and take necessary steps for settlement of the accounts between the parties. We, thus are of the view that issues as sought to be raised in I.A.799/2025 by the YG Estates cannot be gone into or decided in these proceedings. We, however, grant liberty to YG Estates to place its details of dues payable by the homebuyers/association before the IRP and RP and it is equally open for the homebuyers/association to give the details liability which has to be discharged by the YG Estates.

In view of the following discussions, we are satisfied that YG Estates has no right to resist the handing over of maintenance to the association. Association having been formed and its registration being current, it has all rights and obligations as contained in UP Act, 2010. YG Estates is nothing but an agency appointed by corporate debtor, cannot resist the handover of the maintenance to the association.

In view of the discussions, we allow prayer 1 of I.A.8083/2024 and direct the YG Estates to handover maintenance to the association within the period of seven days from today. I.A. No.8083/2024 is disposed of accordingly.

I.A.799/2025 is disposed of with a liberty to the YG Estates to approach the IRP with regard to its claim against the association/unit holders. Equally the association is also entitled to place its claim regarding liabilities to be discharged by YG Estates. It is open for the IRP to settle the accounts or to take such steps as it deemed fit with regard to said issue. I.A.799/2025 is disposed of accordingly.

We have heard applicant in I.A.892/2025 and permitted the applicant to intervene in the matter. I.A.892/2025 is also disposed of.

All the three applications having been disposed of, we direct now appeal to be listed on 20^th March, 2025 for consideration.