Sanjay Malik & Ors. vs Celestial Estate Private Limited

Per: CH. MOHD SHARIEF TARIQ, MEMBER (JUDICIAL)

Under consideration are three (3) Applications i.e., CA-1237/2019, CA-920/2019, CA-654/2020 filed in CP (IB) - 1768(ND)/2018. All the three applications are interconnected and are concerned with the same Project of the Corporate Debtor viz., Celestial Estate Private Limited. Therefore, they are tagged together to pass a common Order. We would first deal with the application regarding the Transfer of the partly constructed building of Earth Iconic Project from Earth Infrastructure Limited (the holding company of the Corporate Debtor i.e., Celestial Estate Private Limited) before examining the "Resolution Plan" of the Resolution Applicant i.e., M/s. H.S. Oberoi Buildtech Private Limited and the Objections filed by Alpha Corp Development Pvt. Ltd.

The application No. CA-1237/2019 is filed by the Resolution Professional viz., Mr. Vivek Patri, for Corporate Debtor i.e., Celestial Estate Private Limited (hereinafter referred as "Resolution Professional as Corporate Debtor"), under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred as the "IBC, 2016") R/w Rule 11 of the National Company Law Tribunal Rules, 2016 (hereinafter referred as "NCLT Rules, 2016").

The prayer made in this Application is to direct the Respondent viz., Earth Infrastructures Limited (hereinafter referred as "EIL/Respondent") to transfer the partly constructed structure of Earth Iconic Project to the Corporate Debtor viz., Celestial Estate Private Limited (hereinafter referred as "Corporate Debtor") which is being constructed from the funds of the claimants/home buyers, to pass the necessary directions to Resolution Professional to consider the partly constructed building which is to be transferred from EIL to the Corporate Debtor as an asset against the claims of the 'Real Estate Allottees' in the Corporate Debtor.

An Application under Section 7 of the IBC, 2016 r/w Rule 6 of the NCLT Rules, 2016 for initiating Corporate Insolvency Resolution Process (hereinafter referred as "CIRP") against Corporate Debtor viz., Celestial Estate Private Limited was filed by Sanjay Malik & Ors. The application was admitted vide Order dated 11.03.2019 and Mr. Vivek Patri was appointed as the Interim Resolution Professional (hereinafter referred as "IRP").

The IRP caused the Public announcement on 30.03.2019 in two newspapers namely 'Jansatta' (Hindi) and 'Financial Express' (English). The 2^nd Public announcement was published in the same two newspapers on 06.04.2019. The Committee of Creditors (hereinafter referred as "CoC") was constituted by the IRP and a report was filed with this Authority on 22.04.2019.

The 1^st CoC meeting was held on 29.04.2019 wherein five Members of the CoC along with IRP and his team members were present. It was resolved that the IRP would be entitled to receive a success fee on the successful completion of the CIRP which could be calculated as per the table provided in the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 and to be calculated on the basis of the total resolution cost of the approved resolution plan. It was also resolved to reimburse the actual expenses to carry out the Resolution Process out of the funds of the Corporate Debtor. Further, a table was drawn on the estimated CIRP Cost for a period of 6 months which excluded the success fee payable on successful completion of the resolution process and on approval of the resolution Plan and it was resolved to pay the CIRP period fee and cost aggregating to Rs. 38.93 Lacs and success fee payable to the Resolution Professional.

The 2^nd CoC Meeting was held on 03.06.2019 wherein the CoC approved and ratified by 94.11% votes the remuneration on monthly basis at Rs. 2,00,000/- plus success fee. Further, in the item 3 on strike off status of the Corporate Debtor vide Public Notice bearing No. ROC/Delhi/248(5)/STK-7/4865 dated 08.08.2018 was discussed. The agenda Item 6 in the meeting was about the CIRP costs, balance in the bank accounts of the Corporate Debtor, it was noted that the estimated total CIRP cost as on 26.05.2019 was Rs. 38,93,411/- excluding the success fee. Further, it was resolved by 100% voting share that for the smooth functioning of the CIR Process the notice period for calling CoC Meetings to be reduced from 5 days to 48 Hours. The Form G was published on 08.06.2019 and the 4^th CoC Meeting was convened on 06.09.2019 wherein including other items the CIRP cost for the CIRP period of 9 months was noted as amounting to Rs. 52,73,500. Further, the resolution was passed with 100% vote, allowing the Resolution Applicant viz., M/s. H.S. Oberoi Buildtech Private Limited to submit final binding resolution plan that addresses the claims of all stakeholders in the Corporate Debtor until 30.09.2019. In the agenda Item 8, it was resolved by 100% voting share that the application for seeking directions from this Authority for transferring the work in Progress building assets constructed with the money (s) of the Real Estate Allottees whose claims have been transferred to the Corporate Debtor vide Order dated 07.08.2019 and to cancel the joint development agreement dated 26.04.2012 between the Corporate Debtor and EIL. Resolution with 100% voting share was passed for restoring the status of the Corporate Debtor on the MCA portal to "Active" and to allow the Corporate Debtor to file its necessary Forms.

The 6th CoC Meeting was convened on 14.11.2019 wherein the total claims received as on 08.11.2019 were noted. It was also noted in the agenda Item 6 that the Joint Development Agreement was not recognised by the Director of Town and Country Planning vide its communication dated 28.10.2014 which was again reiterated vide letter dated 14.11.2019, as submitted by the Authorised Representative during the course of meeting.

In the Agenda Item 8 it was noted that prior to the commencement of the CoC Meeting, the Counsel and his team for the Prospective Resolution Applicant viz., Alpha Corp Development Pvt. Ltd. met the Resolution Professional and it was assured that the voting conducted by the Authorised Representative is to be considered only after having discussions with all the PRA's, however the Ld. Counsel and his team for the Prospective Resolution Applicant viz., Alpha Corp Development Pvt. Ltd., opted to leave the venue of the CoC Meeting.

As seen from records vide order dated 06.06.2018 the EIL /Respondent has gone under CIRP. The Corporate Debtor is a subsidiary of EIL /Respondent and owns land measuring 3.409 Acres (Approximately 1379.79 Sq. Mtrs) situated at Sector 71, Village Badshahpur, Gurugram- Manesar Urban Complex Haryana (hereinafter referred as "Land"). The Corporate Debtor has obtained a license from the office of the Director General, Town & Country Planning (hereinafter referred as "DGTCP"), Chandigarh, Haryana to develop a commercial colony on the land vide licence number 101 of 2011 dated 29.11.2011. The Corporate Debtor had entered into a contractual arrangement with EIL/Respondent dated 26.04.2012 for the development of the project “Earth Iconic” (hereinafter referred as “Development Agreement”). As per the terms of the Development Agreement, the Corporate Debtor has right over 100 Service Apartments of 450 sq. ft. super area approx. in the developed project, whereas EIL/Respondent has right over the remaining developed project. Further, as per the Clause 2 (f) (ii) of the development agreement EIL/ Respondent was to make a payment of Rs. 2,00,00,000/- (Rupees Two Crore only) to the Corporate Debtor as consideration for the development rights of the Earth Iconic project.

Submissions of the Resolution Professional for the Corporate Debtor VIZ., Celestial Estate Private Limited.

It is averred by the Resolution Professional for the Corporate Debtor that the Corporate Debtor is the owner of the Land and had received documents, different types of claim forms from the Real Estate Allottee (s) /Financial Creditor of the Corporate Debtor (hereinafter referred as “Direct Allottees”) along with the Memorandum of Understanding dated 30.03.2013, 18.05.2015, and 10.09.2016. The Memorandum of Understanding dated 30.03.2013 was executed by EIL/Respondent in favour of the Real Estate Allottee (s) (hereinafter referred as “Indirect Allottees”) for the “Earth Iconic” project which is being developed on the land owned by the Corporate Debtor. The Resolution Professional for the Corporate Debtor has further submitted that the Clause No.1 of the said Memorandum of Understanding dated 30.03.2013 provides that the Corporate Debtor is the lawful owner of the Land. Further, the Resolution Professional for the Corporate Debtor has referred to the Memorandum of Understanding that was executed by EIL/ Respondent with M/s. Arsh Sahitya Prachar Trust, wherein it is reiterated that the Corporate Debtor is the owner of the Land.

The Resolution Professional for the Corporate Debtor has submitted that the CIR Process being a time bound process, the publication was made in newspapers in Hindi edition of ‘Jansatta’ and English ‘Financial Express’ on 06.04.2019 and as per the advertisement the last date of filing claims was 10.04.2019. Further it is submitted that the IRP had received total 9 claims from the 'Real Estate Allottees' of the Corporate Debtor i.e., Direct Allottee(s) in response to the 2nd publication dated 06.04.2019 and admitted the same. The IRP received a total 174 claims from the Indirect Allottees(s) and these claims have not been admitted by the IRP.

The Resolution Professional for the Corporate Debtor having noticed that the Indirect Claimants have been allotted units in the project 'Earth Iconic'. The CoC consented for filing application bearing number CA No. 711/2019 before this Authority and vide Order dated 10.07.2019 the Resolution Professional for Corporate Debtor was directed to consider the claims of the 'Indirect Allottees' as claimants of the Corporate Debtor. The Resolution Professional for the Corporate Debtor in compliance of the said Order had sent email to all 309 Indirect Allottees as per the list of claimants of 'Earth Iconic' project available on the website, to file their claims with the Corporate Debtor and select the Authorised Representative (hereinafter referred as "AR") to represent them before CoC of the Corporate Debtor, the affidavit in this regard is placed on record. Further, it is submitted that an application bearing number CA. No. 1004/2019 was filed before this Authority stating that 253 claims of Indirect allottees as against 309 for the Earth Iconic Project were received. In para 18 of the said application, it was stated that 157 out of 160 of such claimants have selected the AR viz., Mr. Ashok Gupta, Insolvency Professional to represent a class of creditors before the CoC of the Corproate Debtor. This Authority vide Order dated 07.08.2019 confirmed Mr. Ashok Gupta as Authorised Representative.

It is submitted that the AR through association of real estate Allottees of Earth Iconic received a letter dated 29.08.2019, wherein it was stated that the AR should discuss with the Resolution Professional for the Corporate Debtor an agenda item in the CoC meeting about the transfer of assets being developed on the Land from the funds of Real Estate Allottees of the Earth Iconic Project and/or to terminate the Development Agreement as the investment in building constructed on the Land is much less than the amount collected by EIL from the Indirect/ Direct Allottees for allotment of units in Earth Iconic Project. Further, it is submitted that the Director of Town and Country Planning (DTCP) vide letter dated 28.10.2018 has denied to recognise the Development Agreement and also denied to transfer the said license granted to the Corporate Debtor to and in favour of the EIL/Respondent. The Real Estate Allottees/ Claimants of the Earth Iconic Project hence have contended that building on the Land of the Corporate Debtor is being partly constructed from the funds of the Real Estate Allottees of Earth Iconic Project and the investment in such part construction is much less, than the funds collected from the Direct and Indirect Allottees.

It is further submitted that the DTCP has denied recognizing EIL as the Developer and therefore, EIL would not be in a position to develop the project on the land of the Corporate Debtor. The information available to the Resolution Professional for the Corporate Debtor from the website of the EIL/Respondent, managed by Resolution Professional of EIL/Respondent, it is noticed that Form G was published and there is no Resolution Applicant/ Resolution Plan for the Earth Iconic project.

It is submitted that the AR of the class of creditors had contended in discussion that the conduct of the Resolution Professional of EIL/Respondent to deny handover of the asset i.e., 'partly constructed building of earth iconic project' is not justifiable act, when the claimants worth more than Rs. 100 Crores in Earth Iconic Project have withdrawn their claims from EIL and lodged their claims with Corporate Debtor i.e., Celestial Estate Private Limited. It is further submitted that as shown on the website of the of EIL/Respondent that out of the 335 claimants of Earth Iconic Project,280 claimants have filed their claims with Corporate Debtor which constitutes around 83% of the total claimants in number and 81% in value terms. The claims received till 29.03.2019 from the Direct and Indirect Allottees of Earth Iconic Project are enlisted in the application which is as follows: -Claims filed by Direct Allottees 12 Claims filed by Indirect Allottees

[Out of 335 Allottees of Earth Iconic as per EIL website, Pending 57] 278

Claimants of Earth Iconic allottees paid to EIL but did not filed their claim with EIL 36

Total Claims received 326

Pending for verification and admission 72

Claimants as on 29.8.2019 254

It is stated that the 4th CoC meeting was convened on 06.09.2019 wherein one of the agenda items was to discuss and approve the transfer of assets being developed on the land of the Corporate Debtor from the funds of the Real Estate Allottees of Earth Iconic Project. The relevant resolution passed in the CoC meeting is reproduced as follows: -

The members of the CoC were requested to consider the matter. The following resolution was put up for e-voting: -

The above-mentioned agenda was put to vote on 5th September at 12:00 PM and continued until 6th September at 12:00 PM by both Direct, Indirect Allottees of Earth Iconic Project and was approved by 99.77% of claimants in favour of such resolution.

It is averred that there is no justification on the part of the Resolution Professional of EIL/Respondent to retain the partly constructed building being developed by EIL/Respondent out of the funds of the Indirect Allottees, who are now claimants of the Corporate Debtors after majority of Indirect Allottees have withdrawn their claims from EIL/Respondent and lodged their claims with the Resolution Professional for the Corporate Debtor.

The answering Respondent is the Resolution Professional for EIL/Respondent and has submitted that the application filed by the Resolution Professional for the Corporate Debtor is nothing but an abuse of process of law and is liable to be dismissed. It is submitted that the EIL/Respondent is undergoing CIRP and moratorium was declared as provided under Section 14 of IBC, 2016 and the said Section provides that no suit or legal proceeding can be initiated against the EIL/Respondent therefore, the application is not maintainable.

Further, it is submitted that the Corporate Debtor is a subsidiary of EIL/Respondent and had entered into a Development Agreement dated 26.04.2012 wherein, the Corporate Debtor transferred its development rights, along with marketing and selling rights with respect to projects developed over the land of the Corporate Debtor. The Relevant extract of Clause 2 of the Development Agreement is as under: -

Therefore, as per the bare perusal of the Development Agreement it can be stated that the parties entered into a quasi-partnership/ collaboration agreement for development of the land. As per the terms and conditions of the Development Agreement, EIL/Respondent was to make a payment of Rs. 2,00,00,000/- (Rupees Two Crore only) to the Corporate Debtor as consideration for the development rights of the "Earth Iconic" project.

It is further submitted by the Resolution Professional for EIL/Respondent that as per clause 2 (g) of the Development Agreement, the Corporate Debtor had transferred all its rights including the selling rights with respect to developed land to Earth Infrastructure and only had share on its own property. Therefore, as per the clause EIL/Respondent can independently without any consent of the Corporate Debtor book and transfer the flats developed over the land of the Corporate Debtor. Further, the clause 2 (h) of the Development Agreement, provides that EIL/ Respondent is free to book/market the developed project without consent of the Corporate Debtor therefore, it is emphasised that on bare reading of the Clause of the development agreement, it is clear that EIL/Respondent has an absolute right over the developed project.

It is also highlighted by EIL/Respondent that as per Annexure A of the Development Agreement the Corporate Debtor only has right over 100 Service Apartments of 450 sq. ft. super area approx., in the developed project, whereas EIL/Respondent has right over the remaining developed project. The Development Agreement is clear with regard to EIL/Respondent's absolute right over the developed project and that the said project is an asset of EIL/Respondent and the Corporate Debtor cannot claim any right over the same. It is further submitted that as per the terms provided in clause 12 of the Development Agreement, the Corporate Debtor can only ask for a specific performance contract and there is no provision to cancel the Development Agreement.

The Resolution Professional of EIL/Respondent has submitted that with regard to the issue of the allottees, the Resolution Professional for Corporate Debtor had filed a Company Application No. 711 of 2019, seeking directions to consider allottees of EIL/Respondent who have booked the flat in the project of the Corporate Debtor namely "Earth Iconic" as the allottees of the Corporate Debtor was disposed of vide order dated 10.07.2019, wherein the Resolution Professional for Corporate Debtor unconditionally undertook to satisfy the claims of the allottees of EIL/Respondent, who have booked their flats in the Earth Iconic Project of the Corporate Debtor. The averments made by the Resolution Professional for Corporate Debtor that the partly constructed building must be transferred to the Corporate Debtor as it is being constructed from the funds of the claimants who have now transferred their claims from EIL/Respondent to the Corporate Debtor and therefore, the Corporate Debtor shall have all the rights to develop the said project is misconceived and is contradictory to the undertaking given by the Resolution Professional for Corporate Debtor as recorded in the Order dated 10.07.2019 and it also recorded in the said Order that the Resolution Professional for Corporate Debtor had unconditionally agreed to satisfy the claims of the allottees who have transferred their claim from EIL/Respondent, irrespective of the fact that no sale consideration has been received by Corporate Debtor from the said allottees. Further, the Resolution Professional for EIL/ Respondent has referred to the aspect that only EIL/ Respondent has the right over the developed/developing building as per the Development Agreement as there is not specific time period provided for it to come to end hence, the building is nothing but an asset of EIL/ Respondent.

Further, reference has been made to Section 25 of the Code, which provides that the Resolution Professional of EIL/Respondent can have the custody and control of all the assets of the Corporate Debtor, therefore, the Application cannot be allowed as the same is not only contradictory to the order dated 10.07.2019 but is also contradictory to the provisions of the Code.

It is submitted that the total built up area of the project is Approx. 39511.0 sq. mts. and transferring of the said partly constructed building without the consent of the allottees would be unlawful as their rights would be gravely prejudiced with such transfer as around 358 claims received from the flat allottees out of which 166 claims have been admitted and are the claimants in EIL/Respondent. The said 166 claimants had not given their consent to transfer their claim to the Corporate Debtor. There are around 4300 allottees apart from the above stated, whose claims have been accepted in Earth Infrastructure Limited.

It is further submitted that in the interest of all the stakeholders the Resolution Professional for EIL/Respondent has filed an Application before the Hon'ble Principal Bench of this Authority vide diary no. 0710102147602019, for transfer of the company petition no. (IB) 401/ND/2017 and Company petition no. 1768 (ND)/2018 (the present Company Petition) before this Bench, as well as for consolidation of the CIR Process of EIL/Respondent and Corporate Debtor herein as matters dealt by two different benches of this Authority will lead to a lot of confusion amongst the Prospective Resolution Applicants and the same has also created an uncertainty with respect to the fate of the allottees.

Further, reference has been made to the legal opinion of Justice R.P. Nagrath (Retd.) and former Member of this Authority (which also forms part of the submissions of RP of EIL), the partially constructed building is valued at Rs. 37.40 Crore and it belongs to the real estate allottees of Earth Iconic Project and the Corporate Debtor claims the transfer of partly constructed structure on account of the fact that the Corporate Debtor has accepted the claims of about Rs. 130 Crore from the allottees of EIL/Respondent in Earth Iconic Project.

Reference has been made to a resolution plan received by the Resolution Professional for the EIL/Respondent which takes care of the interest of the allottees who have booked their flat in a project of EIL/Respondent being built on the land of the Corporate Debtor. Therefore, it is submitted that the present application being without merit and therefore, is liable to be dismissed.

Heard the Ld. Counsels for the rival parties and perused the pleadings including the documents placed on the case file. It reveals from the pleadings that the Joint Development agreement dated 26.04.2012 entered into between the Corporate Debtor and EIL/Respondent has not been recognised by the DTCP and JDA has resulted into frustration; which is not capable of being implemented in relation to the Earth Iconic Project. Thus, the JDA dated 26.04.2012 is declared as null and void and is set aside. In this connection, this Authority relied upon the recent judgment of the Apex Court passed in Gujarat Urja Vikas Nigam Limited Vs Amit Gupta & Ors., Civil Appeal No. 9241 of 2019 dated 08/03/2021 wherein, it was held that under Section 60(5)(c), of IBC, 2016 the NCLT has jurisdiction to adjudicate disputes, which arise solely from or which relate to the insolvency of the CD. Since, the land is owned by the corporate Debtor i.e., Celestial Estate Private Limited and the partly constructed structure has been built by EIL with the money of the Real Estate Allottees. Therefore, the partly constructed building is liable to be restored, transferred to the Corporate Debtor, as the direct and indirect allottees' claims have been admitted by the Corporate Debtor vide Order dated 07.08.2019 passed by this Authority. This fact has been admitted by the EIL/Respondent as is stated in para 23, herein above.

It is further noted that Alpha Corp Development Private Limited has submitted a Resolution Plan for Earth Iconic Project of the Corporate Debtor but the same was not approved by the CoC of the Corporate Debtor for the reason that it was not compliant with the provisions of the IBC, 2016 as the Prospective Resolution Applicant i.e., Alpha Corp Development Private Limited was not agreeable to pay the estimated CIRP cost. Whereas, the Prospective Resolution Applicant viz., H. S. Oberoi Buildtech Private Limited has filed a Resolution Plan which was considered by the Resolution Professional of the CD and found to be in compliance with the provisions of IBC, 2016 and the relevant regulations. The combined allottees (direct and Indirect) have approved the said Resolution Plan with 100% voting share, which will be examined a little later.

In the facts and circumstances of the case, the plea taken by the EIL/Respondent in reply is devoid of merits and stands rejected. It is worthwhile to mention that vide resolution dated 05.09.2019 passed with 99.77% voting share by majority of the direct and indirect allottees present in the meeting had agreed to transfer WIP building assets to the CD. Consequently, this Authority approves the transfer of the WIP building assets constructed with the money(s) of the Real Estate Allottees to the Corporate Debtor viz., Celestial Estate Private Limited, along with all the interest and rights pertaining to the ICONIC project from the date of passing of this Order, without any further act/ deed/Scheme by virtue of this Order, as if a Scheme of merger/Demerger of Corporate Debtor i.e., Celestial Estate Private Limited with/from EIL is approved by this Authority/Tribunal under Sections 230-232 of Companies Act 2013. Accordingly, the CA No. 1237/2019 is allowed.

Before we proceed to examine the CA-920/2019, that contains the "Resolution Plan" of the Resolution Applicant viz., M/s. H.S. Oberoi Buildtech Private Limited (hereinafter referred as "Resolution Applicant/HSOB") in relation to the Earth iconic Project of the Corporate Debtor i.e., Celestial Estate Private Limited, it is necessary to first deal with the Objections filed in CA-654/2020 by the unsuccessful Resolution Applicant viz., Alpha Corp Development Private Limited (hereinafter referred as "Objector/Alpha").

The Prayers made in the CA -654/2020 are as follows: -

It is submitted by the Ld. Counsel for the Objector/Alpha that the Corporate Debtor is the 100% subsidiary of Earth Infrastructure Limited (hereinafter referred as "EIL") and CIRP was initiated against the EIL vide Order dated 06.06.2018 in CP (IB) 401/ND/2017. There are a total of five projects viz., i) Earth Copia, ii) Earth Iconic, iii) Earth Sapphire Court and iv) Earth TechOne (v) Earth Townee Project of EIL. The Objector/Alpha has submitted a Resolution Plan for four projects out of the five projects except for Earth Townee Project on 04.11.2019. The other Resolution Applicant viz., Roma Unicon Designex Consortium has submitted a Resolution plan which has been approved by the Committee of Creditors for one Project viz., Earth Townee Project (hereinafter referred as "CoC") on 11.11.2019.

It is further submitted that the Resolution Professional for Corporate Debtor vide email dated 11.11.2019 expressed his apprehension that pursuant to the application CA No. 719/ 2019, the Objector/Alpha was allowed to file a revised Resolution Plan and thereby withdrew its Plan submitted in respect of the project Earth Iconic in EIL. The Objector/Alpha in response to the email specified that the revised Resolution Plan dated 15.10.2019 categorically states that the Resolution Plan shall be implemented in accordance with the separate Resolution Plan proposed to be submitted as per the CIRP of the Corporate Debtor. The Resolution Professional for the Corporate Debtor sought further clarification in regard to his query vide email dated 11.11.2019 and stated that the amount of CIRP cost proposed to be paid by the Objector/Alpha are based on expected amounts and not as approved by the CoC of the Corporate Debtor. The Objector/Alpha clarified and reiterated and made plausible in its reply that the Resolution Plan qua Earth Iconic Project shall be implemented in accordance with the terms of the Plan submitted in respect of the Corporate Debtor and with respect to the CIRP cost, it was clarified that neither the Request for Resolution Plan nor any other document provided by the Resolution Professional for Corporate Debtor mentions that the approved CIRP cost amounts to Rs. 52,00,000/- and the Objector/Alpha stands by the provision of CIRP cost provided in its Resolution Plan i.e., a sum of approximately Rs. 5,00,000/- subject to maximum of Rs. 15,00,000/-.

It is submitted that the Objector/Alpha is also a Prospective Resolution Applicant in EIL and vide final list of Prospective Resolution Applicant dated 25.06.2019 the Objector/Alpha was declared eligible Resolution Applicant. The Objector/Alpha moved an application CA No. 1236/2019 filed in the Company Petition for allowing it to submit an Expression of Interest and subsequently a Resolution Plan for the Corporate Debtor and vide Order dated 23.09.2019 notice on the Application was issued, subsequently the Objector/Alpha submitted its Expression of Interest on 28.09.2019 in respect of the Corporate Debtor.

It is averred that as per the list of claimants dated 23.04.2019 the CoC comprised of 9 (nine) Financial Creditors having a total admitted claim of Rs. 111,850,874/-. The 1st CoC Meeting was convened on 29.04.2019 and a resolution with respect to the CIRP cost aggregating to Rs. 38.93 Lakhs and success fee was ratified by the CoC having only 5 (five) Financial Creditors which were present and voting. Therefore, it is contended that the resolution passed in the 1st CoC Meeting cannot be considered proper.

The Objector/Alpha has further highlighted the table provided under Regulation 4 (2) of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 wherein the aspect of success fee if any payable to the Liquidator is provided in case of Liquidation of the Corporate Debtor. However, as per the table the success fee payable amounts to Rs. 32,117,000/-. The Ld. Counsel has vehemently objected to the success fee payable on successful completion of the CIR Process. It is submitted that it is patently unlawful and illegal as the Regulation 31, 34 of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 provide for the expenses in respect of the CIRP cost which shall include the fee paid to the interim Resolution Professional, fee to be paid to the resolution professional, fee paid to the insolvency professional entity, if any, and nowhere provides that the insolvency professional shall be entitled to a success fee on successful completion of CIRP.

The Objector/Alpha has mentioned that the list of claims dated 08.11.2019 does not provide any classification of creditors and as per the list there are total 292 claims which have been admitted in respect of the Corporate Debtor amounting to Rs. 1,415,121,340/- and with regard to the CIRP cost and success fee has been imposed upon the CoC comprising of 292 Creditors, which was previously ratified by only 9 creditors /CoC members out of which merely 5 creditors were present and voting, hence the CIRP cost and success fee was previously approved only by 7.9 % of the total creditors in the 1^st CoC Meeting.

It is averred that the Resolution Professional being an interested Party to the Resolution Process of the Corporate Debtor as he merely informed the CoC about the quantum of CIRP cost and that the same has been approved and ratified by the CoC and therefore, deliberately was not made as an agenda for voting. Further, reference has been made to the term 'reasonable costs', and has quoted the observations of the Society for Insolvency Practitioners of India, its statement of best practices on "Payment of Corporate Insolvency Resolution Process Cost" that the Insolvency Professional must ensure that the costs incurred are reasonable and in order to determine the reasonability there are various parameters.

With Context to the correspondences in relation to the 6th CoC Meeting, the Resolution Professional for Corporate Debtor had invited the Objector/Alpha to attend the 6th CoC Meeting held on 14.11.2019 vide E-mail dated 13.11.2019 and it was stated that discussion on the Resolution Plan submitted by the Objector/Alpha would take place and then put for voting. The Objector/Alpha replied to the email of the Resolution Professional of the Corporate Debtor and raised following objections and concerns to which the Resolution Professional for the Corporate Debtor responded vide e-mail dated 14.11.2019. The Objector/Alpha's objections and concerns were as follows; -

No revision of the CoC post transfer of claims from Earth Iconic in EIL to the CIRP proceedings of the Corporate Debtor.

The CoC meeting to be scheduled post the date of hearing in the application bearing C.A No., 2455 (PB)/2019 filed regarding the consolidation of the CIRP proceedings of EIL and the Corporate Debtor before this Authority as the Objector/Alpha apprehended that the Meeting was called with mala fide Intention.

The Resolution Professional was requested to re-constitute the CoC and send the details to the Objector/Alpha.

Further, the objection has been taken regarding declaration of the results of the voting process, which was already conducted and concluded prior to the meeting held on 14.11.2019, and the Meeting was simply called for declaration of the results and not for discussion and voting. The Resolution Plan of the Objector/Alpha was disqualified despite the clarification emails sent by the Objector/Alpha with regard to the queries of the Resolution Professional and was deliberately devoid of the opportunity to discuss its Resolution Plan with the Resolution Professional for the Corporate Debtor.

It is stated that the Resolution Professional responded vide e-mail dated 14.11.2019 and stated that the proposition to reconstitute CoC post the transfer of claim was a misconceived proposition and the application that was filed for transfer of proceedings does not affect the position of the Objector/Alpha.

The other objection taken by the Objector/Alpha is with regard to the similarities in the Resolution Plan submitted by the Resolution Applicant/HSOB. It is submitted that the entire Scheme of revival proposed by the Objector/Alpha has been transcribed by the Resolution Applicant/HSOB. Therefore, direct the Resolution Professional to provide the Objector/Alpha a fair and just opportunity to make suitable amendments to its Resolution Plan and thereafter present before the CoC of the Corporate Debtor.

Reply filed by the Resolution Professional of Corporate Debtor/Celestial Estate Private Limited:

The Resolution Professional for the Corporate Debtor has filed a detailed reply to the Objections filed by Objector/Alpha and in parawise reply to Para 6, it is submitted that the Objector/Alpha filed its resolution Plan on 04.11.2019 and thereafter the Resolution Professional sent an email to the application on 11.11.2019 at 12:31 PM and the communication on the same continued till 13.11.2019. It is stated that the last date for resolution plans was 04.11.2019, date of circulation of agenda & notice for 6th CoC Meeting was 12.11.2019 and the date and time of the 6th CoC Meeting was 14.11.2019 at 6:00 PM, therefore there were 40 hours to pass a particular resolution. It is stated that the Objector/Alpha filed an application after more than 2 months from the approval of the Resolution Plan of the Resolution Applicant/HSOB in order to delay the process.

Further, it is admitted by the Objector/Alpha at page 7 that the Resolution Professional of the Corporate Debtor sent an email on 11.11.2019 acknowledging therein that the 'email sought confirmation whether the Objector/Alpha shall pay the complete CIRP cost approved by CoC. The Objector/Alpha also admitted that it had confirmed the CIRP cost vide email dated 13.11.2019 and despite the estimate of the CIRP cost, the same was available with the Objector/Alpha on 11.11.2019. Further, the email dated 11.11.2019 of the Resolution Professional categorically states that the Objector/Alpha would withdraw their plan in EIL for the Earth Iconic Project as agreed, as their plan in the Corporate Debtor was conditional to JDA. The Objector/Alpha instead of providing confirmation to pay the CIRP cost approved by the CoC vide email dated 13.11.2019 advised to restrain from holding the resolution process as the transfer application is pending before the Principal Bench.

In reply to para 7 it is stated that the table does not include the date 28.10.2014 i.e., when the regulatory authority, DTCP denied acknowledging the Joint Development Agreement executed between the Corporate Debtor and EIL and this fact is duly mentioned in the Information Memorandum in the Para 2.9 i.e., page No. 55 and the Objector/Alpha has not even mentioned that the JDA was not recognised by the DTCP.

In reply to para 28 it is mentioned that RFRP is a process document as per the template provided by IBBI and not an information memorandum. Payment of CIRP Costs in priority to other payments is mandatory under Section 30 (2) (a) and the Resolution Professional for the Corporate Debtor provided an opportunity to the Objector/Alpha vide email dated 13.11.2019 to address this non-compliance. In reply to Para 29 it is stated that the language of the para itself demonstrates that the plan submitted is conditional which is contrary to the provisions of the RFRP and IBC, 2016. As per the definition a non-compliant Resolution Plan as provided in Section 30 (3) of IBC shall not be presented to the CoC. Therefore, the Resolution Professional was duty bound to ask the Objector/Alpha to make compliance with the provisions of IBC, 2016 and the RFRP. On account of refusal to pay the CIRP cost as per the provisions of the Code R/w IBBI Regulations the Resolution Plan of the Objector/Alpha was non-compliant and since the mind of the Objector/Alpha was prejudiced therefore, did not avail the opportunity to appear before the CoC to explain/improve his plan if needed.

In reply to para 30, 33-34 it is mentioned that the CIRP costs and success fee were ratified by the CoC in its 4th CoC Meeting held on 06.09.2019 comprising of 254 Creditors out of the 292 creditors thereby translating to 86.89% of the claim amount as on the date of the 6th CoC Meeting including EIL allottees and the same was informed in the minutes of all the CoC meetings.

In reply to para 36-40 it is stated that the circular IBBI/IP/013/2018 dated 12.06.2018 refers to fee and other expenses incurred for CIRP. Further, the CIRP cost and remuneration of the Resolution Professional has been approved by the CoC comprising of a couple of hundred of financial creditors, keeping in mind the period of work involved and completion of project to handover the units to the Financial Creditors and the Resolution Plan of the Resolution Applicant/HSOB was put to vote as it was fully compliant with the provisions of IBC, 2016.

The Objector/Alpha has filed rejoinder in detail wherein the preliminary objections are that the various assertions made in the application are supported by documents, which clearly reflect the mala fides of the Resolution Professional for the Corporate Debtor in conducting the CIR Process of the Corporate Debtor. The Objector/Alpha has reiterated the stand taken in the application, therefore, the same is not repeated for the sake of brevity.

Heard the Ld. Counsel for both the parties and perused the pleading including documents placed on the case file. In the facts and circumstances of the case, the plea taken by the Objector/Alpha is with regard to the CIRP Cost and the success fee. The approval with regard to CIRP Cost and the success fee, if any, is to the best of the understanding of the CoC. The Objector/Alpha cannot enter into the shoes of CoC to decide the reasonableness of the CIRP costs and success fee, if any, because the CoC is supposed to know well about the bulk of work and time to be taken for the implementation of the Resolution Plan. Moreover, the estimated CIRP cost and the success fee in no way is in violation of the provisions of the IBC, 2016 and the Regulations made thereunder. The Resolution Plan submitted by the Objector/Alpha was not in compliance with the Section 30 (2) of the IBC, 2016 and the relevant Regulations. Therefore, the decision taken by the Resolution Professional for the Corporate Debtor with regard to the rejection of the Resolution Plan of the Objector/Alpha is in accordance with law and otherwise also, the Resolution Plan of M/s. H.S. Oberoi Buildtech Private Limited, which has been approved by the CoC with 100% voting shares is on better footing than that of the proposed Resolution Plan of the Objector/Alpha. This aspect is more fully explained in later paras. It is further noted that despite giving opportunity for removing the defects in the proposed Resolution Plan no efforts were made by Objector/Alpha for curing the defects in order to make it compliant as per the provisions of Section 30 (2) (a) and no statement of details was provided as required under Regulations 38 1B of the CIRP.

In view of the observation made above, the CA -654/2020 being devoid of merits stands rejected.

The Application bearing No. CA-920/2019 contained a "Resolution Plan" filed under Section 30(6) of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred as "IBC, 2016") in relation to the corporate debtor viz., Celestial Estate Private Limited. The Resolution Plan was submitted by M/s. H.S. Oberoi Buildtech Private Limited (hereinafter referred as "Resolution Applicant/HSOB") was approved by the Committee of Creditors in the 6th CoC Meeting.

The Resolution Professional for Corporate Debtor in its application has prayed as follows: -

The Resolution Plan is submitted by the Resolution Applicant viz., H.S. Oberoi Buildtech Private Limited, a company incorporated and registered under the Companies Act,1956 working in the business of civil construction and interior contracting agency. The Resolution Professional for the Corporate Debtor has prepared a comparative table of the Resolution Plans offered by the Resolution Applicant/HSOB, and the Objector/Alpha, which is as under: -

As can be seen from the comparative table mentioned above, the Resolution Plan of the Resolution Applicant/ HSOB is on better footing and unconditional. This Authority while dealing with the objections of the Alpha Corp Private Limited filed through CA-654/2020 has already observed in the concluding part that the Resolution Plan of the Objector/Alpha was not in compliance with the provisions of Section 30 (2) of the IBC, 2016 and the Regulations made thereunder. The Resolution plan offered by the Resolution Applicant/HSOB viz., H.S. Oberoi Buildtech Pvt Ltd has been put to voting process and was approved by 100% voting share by the CoC and the resolution passed is as follows: -

The voting result and the decision of the CoC was communicated to the Resolution Applicant/HSOB vide email dated 16.11.2019 and it was asked to furnish the performance Bank Guarantee of Rs. 5,00,00,000/- as per clause 1.9 of the RFRP dated 24.09.2019. The compliance certificate obtained from the Resolution Professional for the Corporate Debtor in Form H of Schedule is placed on the file.

Summary of the claims admitted

[Note; given in the application]: From the list of Financial Creditors the amount of Rs.18,33,05,507 of the 5 unit of buyers has been kept pending for verification/submission of the documents. As per the IM one Mr. Rahul Yadav has claimed an amount of Rs.80,57,237.00 towards some lease agreement for providing access to the project site. The Resolution Professional for the Corporate Debtor has not admitted the said claim, since the said agreement of lease is with EIL and as per Resolution Professional for the Corporate Debtor the liability of the same is of EIL and the Resolution Applicant/HSOB is of the considered view that non admission of the claim will not have adverse impact on the feasibility and viability of the project. Thus, the mechanism of the same is proposed in the plan.

The 'Resolution Plan' provides to deliver the possession of the units to the respective buyers in the manner and on the terms and conditions stipulated, by managing the project through a team of committed and dedicated management in much professional manner and to deploy the money received from the buyers in terms of the plan in accordance with RERA in a time bound manner.

The Resolution Applicant/HSOB proposes to deploy a sum of Rs. 22, 00, 00,000/- in a phased manner as per requirement over a period of 4 + 24 months (i.e, from the date of approval of the resolution plan) (i.e., 4 months of pre-construction work like seeking necessary approvals, licenses, RERA registration etc. and 24 months of construction related activity) and the balance receivable from existing buyers shall be demanded as per the Payment Plan.

The Resolution Applicant/HSOB proposes to acquire the Corporate Debtor by way of transfer of 100% shares held by EIL and its nominee/directors in order to revive the status with the RoC at the rate of authorised and subscribed share capital, which as per master data of the Corporate Debtor available on the website of MCA is Rs. 1,00,000/- i.e., at par to EIL or other persons as the liability of EIL is being redressed, to satisfy the claims admitted by Resolution Professional and/or other claims, which require redressal on the terms as provided in the Resolution Plan.

The parameters for approval of the Resolution Plan are set out in Section 30 and 31 of the IBC, 2016. The Resolution Plan has to fulfil certain mandatory requirements under the Code and CIRP Regulations. The Resolution Plan of the Resolution Applicant/HSOB has complied with such mandatory compliances, which are briefly set forth herein below:-

Management and Control of the corporate debtor: It is mentioned in the plan that the Resolution Applicant proposes to reconstitute the management of the Corporate Debtor including the project with professional managers/agencies having relevant industrial expertise to be inducted in the organisational level within the body corporate to drive the turnaround of the company and achieve the financial projections. The Resolution Applicant has identified the professionals or KMPs.

Sources of Funding: It is stated in the Resolution Plan that the Resolution Applicant/HSOB is capable of introducing such sums of money as is required for completion of the project ICONIC in such manner so as to satisfy the claims of various stakeholders on such terms and conditions as mentioned in the Plan. It is stated that as on 03.03.2019 the net worth of the Resolution Applicant stands at Rs. 9.01 Crores approximately. Further, there are FDRS worth Rs. 1 Crore (approx.) and pre-sanctioned credit facility. It is stated that as per IM the security structure for the secured financial creditors is Rs. NIL. There is no mention of any security or bank guarantee nor any claim. The Resolution Applicant/HSOB proposes to satisfy all the claims filed by the unit buyers in Iconic project irrespective whether the claim has been filed with Resolution Professional of EIL or the Corporate Debtor. The Resolution Applicant/HSOB proposes to implement the plan within a period of 4+24 months (i.e., from the date of approval of resolution plan) (i.e., 4months of pre-construction work like seeking necessary approvals, i.e., seeking licenses, RERA registration etc. and 24 months of construction related activity) from effective date in a phased manner.

Summary of Priority of payments The following table indicates the priority of payments as per the Resolution Plan, which is in accordance with the order of priority as mentioned in IM/IBC, 2016:

The Resolution Applicant/HSOB proposes to open an escrow account in the name of ICONIC COLLECTION in order to deposit the amount collected from the buyers of ICONIC which shall be utilised in accordance with Real Estate (Regulation and Development) Act, 2016 and Rules made thereunder and amounts transferred from the Escrow Account to development account if any, shall be strictly utilised for the development/construction of the project in compliance with RERA.

The Resolution Plan offered by the Resolution Applicant viz., M/s. H.S. Oberoi Pvt Ltd., seeks waiver of the tax liability of Rs. 161.64 lakhs (approx.) w.r.t compensation of Rs. 911.36 Lakh towards land acquired by the HUDA in 2016-17 and 19.56 Lakhs towards taxes and duties, however, no claim has been filed by the department concerned. The waiver of penalty and interest on the pending dues of DTCP has been sought. Further, it is also proposed that all the litigations, claims, disputes filed by the buyers of the project pertaining to non-delivery and non-committal or otherwise filed against the Corporate Debtor or EIL before DTCP, RERA, Consumer Forum or any other court, Tribunal, authority shall stand settled as per the terms of this Resolution Plan. The Resolution Applicant/HSOB has sought reliefs and concessions from this Authority and from the other relevant Government Authorities, as enumerated in the Resolution Plan.

From the plan approval date, all inquiries, investigation and proceedings, whether civil or criminal, suits, claims, disputes, interests and damages in connection with the Corporate Debtor or the affairs of the Corporate Debtor, pending or threatened, present or future in relation to any period prior to the plan approval date, or arising on account of implementation of this resolution plan shall stand withdrawn, satisfied and discharged. From the date of approval of the 'Resolution Plan', the Resolution Applicant shall be legally authorised to seek appropriate orders from respective authorities/courts/tribunals for renewal of licences/withdrawal/dismissal or abatement of the proceedings, as the case may be.

All the statutory duties including taxes/cess /interest/ penalty and other liabilities due to the operational creditors shall stand satisfied/ waived off. The reason for these waivers and abatement is that the Operational Creditors and Financial Creditors except those in whose favour the provision is made in the 'Resolution Plan' would not get anything in the event of liquidation of the Corporate Debtor, as per the waterfall mechanism provided under Section 53 of the I&B Code, 2016. Moreover, this is with a view to implement the Resolution Plan successfully as approved by the CoC.

Besides the above, the existing Directors of the Corporate Debtor shall be deemed to have resigned from the directorship of the Corporate Debtor from the date the Resolution Plan is approved, so that the Resolution Applicant may induct new Directors to gain control over the management of the affairs of the Corporate Debtor in order to enforce the capital restructuring after getting voting rights in any general meeting of the Corporate Debtor.

The 'Resolution Plan' filed with the Application meets the requirements of Section 30(2) of IBC, 2016 and Regulations 37, 38, 38(1A) and 39 (4) of IBBI (CIRP) Regulations, 2016. The 'Resolution Plan' is not in contravention of any of the provisions of Section 29A. The Resolution Professional has also certified that the "Resolution Plan" approved by the CoC's does not contravene any of the provisions of the law for the time being in force. The Compliance Certificate in Form H as required under Regulation 39(4) of IBBI (Insolvency Process for Corporate persons) Regulations, 2016 is placed at pages 150 to 158 of the typed set.

In view of the above, the 'Resolution Plan' annexed with CA-920/2019 filed in CP (IB)- 1768 (ND)/2018 is hereby approved, which shall be binding on the Corporate Debtor and its employees, members, creditors, guarantors and other stakeholders involved in the Resolution Plan including the Resolution Applicant/HSOB.

While approving the 'Resolution Plan', as mentioned above, it is clarified that the Resolution Applicant/HSOB shall pursuant to the Resolution Plan approved under Sub-section (1) of Section 31 of the I&B Code, 2016, obtain all the necessary approval as may be required under any law for the time being in force within the time period of 1 (one ) year or as stipulated in the Resolution Plan from the date of approval of the Resolution Plan by this Authority or within such period as provided for in such law/Rules/Regulations.

The Order of moratorium dated 11.03.2019 passed by this Adjudicating Authority under Section 14 of IBC, 2016 shall cease to have effect from the date of passing of this Order.

The Resolution Professional shall forward all records relating to the conduct of the CIRP and the 'Resolution Plan' to the IBBI, so that the Board may record the same on its database.

The 'Resolution Plan' approved by this Authority shall become effective from the date of passing of this Order.

The Resolution Professional shall forthwith send a copy of this Order to the participants and the Resolution Applicant/HSOB.

Accordingly, the CA-920/2019 is allowed and the CA-654/2020 is rejected.

The Order is pronounced in the presence of the Ld. Counsels for the parties through video conferencing.