Yes Bank Limited vs M/s. Ideal Real Estates Pvt. Ltd.

This matter was not on Board today; however, upon mentioning, the matter has been taken up on Board.

Due to inadvertent errors, the order dated 22.06.2026 passed in CP(IB) No. 166/KB/2024 titled as Yash Bank Vs. M/s Ideal Real Estate Private Limited, requires necessary changes in para no. 5.11 and to be made in the manner specified as under:

The necessary changes have been made typographically in the relevant paras and corrected order is issued today.

The rest of the order will remain unchanged.

Registry is hereby directed to issue free copies of the corrected order in terms of this corrigendum order.

Labh Singh Member(Judicial)

The applicant, Yes Bank Limited has filed the present application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (for short “IBC Code”) read with rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (for brevity ‘the Rules’) with a prayer to trigger Corporate Insolvency Resolution Process(for short ‘CIRP’) in respect of respondent Company, M/s Ideal Real Estate Private Limited.

It is appropriate to mention that the applicant Bank, is a public Company incorporated under the Companies Act, 1956 and Banking Company within the meaning of Section 5(C) of the Banking Regulation Act, 1949, having its Registered Office at Yes Bank House, Prabhat Nagar, Off Western Express Highway, Santacruz East, Mumbai - 400 055. Northern Regional Corporate Office: Plot No. C, Max towers, Ground Floor, 4th, 5th, 14th (A) Floor, 001A/1, Sector 16B, Noida, Uttar Pradesh- 201 301.

Mr. Ankit Tulshan, Executive Vice President, duly authorized on behalf of applicant, has preferred the present application on behalf of the applicant for initiation of insolvency resolution process against the respondent under the IBC Code. A copy of the Power of Attorney dated 01.12.2023 has been placed on record as Annexure-I.

The Respondent Company, M/s Ideal Real Estate Private Limited(hereinafter to be referred as “Corporate Debtor”) against whom initiation of CIRP process has been prayed for, was incorporated on 07.10.1998 having its registered office situated at 50, Jawaharlal Nehru Road, 11^th Floor, Kolkata-700071. Since the registered office of the Corporate Debtor is situated at Kolkata, and hence, this Adjudicating Authority, having territorial jurisdiction over the State of West Bengal, is the Adjudicating Authority in relation to the prayer for initiation of CIRP process in respect of Corporate Debtor under sub-section (1) of Section 60 of the IBC Code.

Briefly stated the applicant’s case is that the Corporate Debtor has been a constituent of the Financial Creditor and the relationship of Banker and constituent had been maintained; and as a result thereof, the Corporate Debtor approached the Financial Creditor for availing loan facilities. One Srawan Kumar Himatsingka was the livewire of the Corporate Debtor and other group of companies and had all alone represented the Corporate Debtor and other group of companies with the Financial Creditor. He had executed various documents to avail loan facilities. 5.1 The Corporate Debtor, in consonance with Memorandum and Articles of Association, approached the Financial Creditor with a request to avail facilities for which a Board Resolution dated 29.06.2018 was passed by the Corporate Debtor. The Financial Creditor, after considering the request made by the Corporate Debtor and scrutinising the relevant documents submitted, issued a facility letter dated 29.06.2018 bearing no. YBL/DEL/FL/0513/2018-19 and inter alia sanctioned term loan facilities of Rs. 320,00,00,000. 5.2 Thereafter, vide addendum facility letter June, 2018 bearing no. YBL/DEL/FL/0514/2018-19, the Financial Creditor prescribed certain additional terms and conditions including levy of additional facility fees. Further, the Financial Creditor issued another addendum facility letter dated June 29, 2018 bearing no. YBL/DEL/FL/0526/2018-19 in favour of the Corporate Debtor wherein the Financial Creditor at the request of the Corporate Debtor sanctioned additional facilities including term loan facility of Rs. 200,00,00,000/- including an FCNR facility of Rs. 200 crores as its sub limit and certain working capital limits in the nature of forward/swaps of Rs. 40 Crores, Overdraft limit aggregating to Rs. 30 Crores and Financial Creditor guarantee of Rs. 20 crores with a condition that the overall exposure of the Corporate Debtor would not exceed an amount of Rs. 320,00,00,000 in any event excluding forwards and swaps of Rs. 40 Crores. However, it is to be noted that the additional facilities as sanctioned vide the above Facility letter dated June 29, 2018 bearing No. YBL/DEL/FL/0526/2018-19 were not availed by the Borrower and were subsequently cancelled by the Financial Creditor vide Facility Letter dated July 13, 2020 bearing no. YBL/DEL/FL/0239/2020-21. 5.3 The Corporate Debtor, in consideration of the Financial Creditor having agreed to grant the aforesaid credit facility, provided various securities and guarantees and executed various loan/banking documents on 04.09.2018 for the purpose of such credit facilities granted. The Corporate Debtor, in order to secure the loan amount, hypothecated the securities by executing hypothecation deed dated 05.02.2019. 5.4 The Financial Creditor, vide Facility Letters bearing No. YBL/DEL/FL/1677/2018-19 dated January 1, 2019, letter bearing no. KOLKATA YBL/DEL/FL/2209/2018-19 dated March 28, 2019, letter bearing YBL/DEL/FL/2213/2018-19 March 2019, and letter no. YBL/DEL/FL/1245/2020-21 February 04, 2021, modified certain terms and conditions of the loan facilities including change in the purpose of the loan, levy of additional facility fees etc., charge of penal interest, and modification in pre-payment penalty etc. 5.5 The Corporate Debtor, in view of prevailing Covid 19 situation, had availed of the moratorium benefits in terms of RBI Circulars and expressed its inability to make payment of the accrued interest obligation on due date. Therefore, on the basis of the request made by the Corporate Debtor, the Financial Creditor agreed to provide facilities in the nature of funded interest Term loan which would comprise the accrued interest obligation of the Corporate Debtor as on September 02, 2020. The Corporate Debtor, in pursuance thereof, executed two separate agreements dated 20.01.2021. The additional facilities sanctioned to group companies of the Corporate Debtor were extended by way of execution of Supplemental Mortgage Deeds dated 18.08.2021.

The group of Companies of the Corporate debtor created hypothecation and equitable mortgage in respect of their respective immovable properties on 28.01.2022 and 29.01.2022. The Financial Creditor, vide Facility Letter dated March 30, 2023 bearing No. YBL/ KOL/FL/722/2022-23, changed the mechanism of pricing and also ratified the security created for securing the dues of the Corporate Debtor. The Corporate Debtor and its group of Companies executed Deeds of Rectification dated 17.05.2022.

The Corporate Debtor failed to operate the said accounts in terms of the loan agreements. The Corporate Debtor defaulted in repayment of principal and interest thereon. Consequently, the account became irregular and classified as Non-Performing Asset on 30.05.2023. The Financial Creditor issued notice dated 26.07.2023 under Section 138 of Negotiable Instrument Act to the Corporate Debtor and its directors.

The Corporate Debtor, despite repeated requests and reminders, failed to repay the outstanding dues in the said accounts as per term and condition of the loan agreements. Therefore, the Financial Creditor was compelled to recall the loan amount and issued demand notices, last of which were sent on 30^th June, 2023.

It is further submitted that the said Srawan Kumar Himatsingka died on 02.11.2023 leaving behind his legal heirs Ekta Sodhani, Nakul Himatsingka and Kanak Himatsingka. The said legal heirs are bound to discharge legal obligation of late Sh. Srawan Kumar Himatsingka.

On 04.12.2023, the Financial Creditor filed an application under Section 19 of the Recovery of Debts and Bankruptcy Act, 1993 before the Ld. DRT-I , Kolkata Bench bearing O.A. No. 02 of 2024.

Sub-section (3)(b) of Section 7 mandates the financial creditor to furnish the name of an Interim Resolution Professional. In compliance thereof the applicant has proposed the name of Bijay Murmuria, for appointment as Interim Resolution Professional having registration number IBBI/IPA-001/IP/N00007/2016-17/10026 resident of Sumedha Management Solutions Pvt Limited, 6 A Geetanjali Apartment, 8 B Middleton Street ,Kolkata ,West Bengal ,700071 with Email ID: [email protected]. Mr. Bijay Murmuria has agreed to accept the appointment as the interim resolution professional and has signed a communication in Form 2 in terms of Rule 9(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. There is a declaration made by him that no disciplinary proceedings are pending against him in Insolvency and Bankruptcy Board of India or elsewhere. In addition, further necessary disclosures have been made by Mr. Bijay Murmuria as per the requirement of the IBBI Regulations. Accordingly, it is seen that the requirement of Section 7(3)(b) of the Code has been satisfied.

The applicant, in order to prove its case, has relied upon certificate of incorporation and Master Data of Corporate Debtor Annexure-‘II’, Balance Sheet for the Financial Year 2021-22 Annexure-‘III’, Written Communication of IRP Annexure-‘IV’, Memorandum and Article of Association of Corporate Debtor Annexure-‘A’, Board Resolution of Corporate Debtor Annexure-‘B’, Facility Letters dated 29.06.2018 and 13.07.2020 Annexure-‘C’, Master Facility Agreement dated 04.09.2018 Annexure-‘D’, Two Loan Agreements both dated 04.09.2018 Annexure-‘E’, Two Deeds of Undertaking along with separate undertaking cum indemnity all dated 04.09.2018 Annexure-‘F’, Letter of Lien dated 04.09.2018 Annexure-‘G’, Debit Authorisation Letter dated 04.09.2018 Annexure-‘H’, Demand Promissory Note dated 04.09.2018 and letter of continuity Annexure-‘I’, PDC for facility amount of Rs. 320,00,00,000/- along with three PDC for Rs. 12,00,00,000/-Annexure-‘J’, Deed of Hypothecation dated 05.02.2019 Annexure-‘K’, Power of Attorney dated 05.02.2019 Annexure-L, Deed of Pledge along with Power of Attorney Annexure-‘M’ to Annexure-‘P’, Undertaking Annexure-‘Q’, Deed of Guarantee Annexure-‘R’ to ‘T’, Facility Letter dated January 01, 2019, March 28, 2019, and February 04, 2021 Annexure-‘U’, Letter of Arrangement Annexure-‘V’, Supplemental Mortgage Deed and Deed of Rectification Annexure-‘W’, Directors Declaration and Memorandum of Entry both dated January 28, 2022 Annexure-‘Y’ & ‘Z’, Deed of Hypothecation dated 29.01.2022 Annexure- ‘A-1’, Facility Letter dated 30.03.2023 Annexure ‘B-1,’ Demand Notice Annexure ‘C-1’, Notice Annexure ‘D-1’, Statement of Account Annexure ‘E-1’, Certificate of Registration of Charge Annexure ‘F-1’, Schedule containing hypothecated and pledged properties Annexure-‘G-1’ and ‘H-1’, and CIBIL Report Annexure ‘J-1’.

The applicant has also placed on record a copy of record of default Annexure-‘I-1’ filed with NeSL (information utility) in respect of default on the part of the Corporate Debtor in its repayment owed to the Financial Creditor.

Therefore, as per part IV of the application, it is claimed that as on 07.03.2024 a sum of Rs. 3,486,237,862.78 /- is due and payable by the respondent company. The applicant has prayed for allowing the present application and admit the Corporate Debtor in the CIRP process.

Respondent appeared in pursuance of notice issued by this Tribunal and filed its reply raising preliminary objection that the present application is not maintainable either on facts or law. There is no relationship of creditor and debtor between the applicant and respondent. The respondent being Real Estate Company could not be termed as Corporate Debtor. There is no debt as defined in IBC Code; and accordingly, there is no default on the part of the Corporate Debtor.

On merits, it has been replied that the Corporate Debtor and the Financial Creditor floated diverse real estate projects as is evident from the present application. The Financial Creditor acted as promoter and represented to the prospective homebuyers that the projects have been prepared, vetted and developed by the Financial Creditor along with Corporate Debtor. The Corporate Debtor deployed its men and machinery for the purpose of developing the said project. The Financial Creditor played a role of financer and promoter of the said real estate projects. Therefore, no amount was disbursed by the Financial Creditor for the time value.

The Corporate Debtor, upon various offers made by the Financial Creditor in the year 2018, approached the Financial Creditor for availing credit facilities. The Financial Creditor sanctioned diverse credit facilities in favour of the Corporate Debtor which were modified later on from time to time upon agreed terms and conditions as evident from sanction letters and addendum issued by the Financial Creditor.

The Financial Creditor, vide sanction letter dated 29.06.2018, sanctioned a non-revolving term loan of Rs. 320,00,00,000/-(Rupees Three hundred Twenty Crores Only) in favour of the Corporate Debtor for the purpose of refinance the existing secured and unsecured debt along with part finance of the construction cost for the projects with a tenure of 96 months and moratorium of 12 months from the date of first disbursement. After a moratorium period of 12 months, the principal loan amount was to be repaid in twenty eight (28) structured quarterly installments with interest at the rate of 4.55% per annum over and above Banks yearly MCLR.

It has further been replied that despite sanction of loan amount as per sanction letter dated 09.08.2018, no disbursement in terms of sanction letter was made. The Financial Creditor has only disbursed an amount of Rs. 341.28 crores against the total sanctioned amount of Rs. 343.50 crores. The disbursal was crucial for implementation and completion of the projects and subsequent sale of the flats and units. Consequently, the Corporate Debtor suffered loss and damage and therefore, the Financial Creditor is estopped from taking coercive steps against the Corporate Debtor.

It has further been replied that during Covid-19 period, the Financial Creditor cancelled the overdraft facility of Rs. 30 crore and term loan of Rs. 20 crore along with Performance Bank Guarantee of Rs. 20 crore and swap facility of Rs. 40 crores. The said letter has been suppressed by the Financial Creditor which is filed as annexure-A with a reply affidavit. Thus, a total facility of Rs. 110 crore was taken away from the Corporate Debtor without any reason in an arbitrary manner though funds were required at that stage due to prevailing Covid-19 situation. The Financial Creditor has failed to adhere to terms and conditions of sanction letters. The Financial Creditor was bound to disburse the loan amount and then claim recovery of the same.

The Financial Creditor, vide letter dated 03.07.2021, requested for various details from the Corporate Debtor with regard to various projects of the Corporate Debtor and the same were provided vide email dated 06.07.2021. The Financial Creditor was aware of dealing with the Corporate Debtor and its sister concerns with other Banks and Financial Institutions including ICICI Bank. The Financial Creditor, vide email dated 12.09.2021, alleged diversion of funds on account of sale proceeds not being routed through escrow account in entirety; however, escrow account was opened and maintained for the purpose of receipt of consideration from flat buyers. The flat buyers directly deposited the amount in the escrow account without involvement of the Corporate Debtor. The Financial Creditor was fully monitoring the sale of flats and receipt of consideration by the flat buyers in escrow account and despite this, the Financial Creditor levelled false allegation of diversion of funds against the Corporate Debtor.

It has further been replied that the Financial Creditor committed fundamental breaches of the contract entered between the parties which includes negligent act on the part of the Financial Creditor to make necessary disbursement of loan amount in favour of the Corporate Debtor which resulted in shortage of funds and delay in completion of projects and pressuring the Corporate Debtor to create collateral security in respect of Reckjoani and Tehoria Land despite no such obligation.

The Corporate Debtor has always bonafide intention to discharge legitimate dues of the Financial Creditor, and accordingly, proposed to liquidate the immovable asset which was contemplated at the time of disbursement of credit facilities. The Financial Creditor, in order to release security interest in the Joka property, imposed a condition of deposit of Rs. 30 Crore. The Financial Creditor was bound to release Joka property on receipt of environment clearance without any condition; however, due to non-release of security interest, the Corporate Debtor suffered immense loss and damage which resulted in failure of repayment of debt towards the Financial Creditor.

The Corporate Debtor, due to illegal practices adopted by the Financial Creditor, suffered shortage of funds. The creditors of the Corporate Debtor started approaching it with their claims; however, the Corporate Debtor could not satisfy them due to shortage of funds. The Corporate Debtor faced various legal proceedings under the provision of IBC Code wherein the Corporate Debtor was forced to settle by relinquishing its right in valuable properties. This further resulted in immense financial distress of the Corporate Debtor.

The Corporate Debtor could not complete the sale of units in various projects due to non-issuance of ‘No Objection Certificate’ (NOC) by the Financial Creditor which resulted in seeking refund of entire sale consideration paid by the flat buyers. Though Financial Creditor issued NOC for two units in Ideal Unique Centre; however, by another letter dated 22.06.2023 sought to cancel the NOC in respect of the said two units. The cancellation resulted in a demand of refund of the entire sale consideration paid by the flat buyers.

The Financial Creditor by issuing public advertisement/notification informed to the public at large to exercise caution while purchasing flats constructed by the Corporate Debtor. This resulted in loss to the Corporate Debtor both financially and in its reputation to goodwill in the market.

The Financial Creditor recalled the loan facility by issuing a letter dated 30.06.2023; however, on the same day, renewed the loan facility to the extent of Rs. 299,00,90,701.45/-. Thus, the Financial Creditor acquiesced to all the alleged default of the Corporate Debtor and waived its right to take any step in respect thereof by granting further credit facilities. Therefore, the Financial Creditor cannot be permitted to proceed further with the present application.

The Financial Creditor issued demand notice dated 12.09.2023 under Section 13(2) of the SARFAESI Act 2002 to the Corporate Debtor, notice dated 11.10.2023 to Ideal Aurum Nirman LLP and notice dated 11.01.2024 to ideal Unique Realtor Pvt. Ltd which were duly responded by the Corporate Debtor. The account classified as non performing asset(NPA) by the Financial Creditor is contrary to guidelines issued by Reserve Bank of India. The Financial Creditor also issued show cause notice upon the Corporate Debtor to declare the account as ‘Fraud Account’ vide email dated 15.09.2023 which is illegal and arbitrary. The Financial Creditor also proceeded to take symbolic possession of secured assets under Section 13(4) of the SARFAESI Act 2002 which is illegal and void. The Financial Creditor also proceeded to declare the Corporate Debtor as wilful defaulter by issuing notice dated 12.06.2024.

The Financial Creditor has insisted upon the Corporate Debtor to submit one time settlement proposal. The Corporate Debtor, in order to resolve the dispute, submitted a settlement offer vide letter dated 26.08.2024 and 06.11.2024. The said offers were accepted by the Financial Creditor for which the settlement agreement dated 13.12.2024 was executed between the parties. The Corporate Debtor had paid an amount of Rs. 25 crores which was unconditionally accepted by the Financial Creditor.

Thus, the Financial Creditor is well aware that the Corporate Debtor is a solvent company and did not commit any default at all. Therefore, the Financial Creditor has no cause of action to proceed under provision of IBC 2016. The present application has been filed to pressurise the Corporate Debtor for collateral purpose.

It has further been replied that the diverse proceedings have been instituted by various parties interested in the real estate projects of the Corporate Debtor, and in view of pendency of the same, the present application deserves to be dismissed. The admission of the present petition would amount to interference with the lawful right of the respective parties including homebuyers. Therefore, the present company petition requires to be dismissed with cost.

The applicant Company filed its rejoinder denying the averment made in the reply and reiterating the facts as pleaded in the present petition which are not reproduced here for sake of brevity.

The present application has been filed by the Corporate Debtor for dismissal of the Company Petition No. 176/KB/2024.

It has been submitted that after filing of the present Company Petition, the Financial Creditor has pursued its recovery proceedings by filing IA No. 176 of 2026 in pending OA No. 02 of 2024 seeking judgment on admission before Ld. DRT Kolkata. Thus the Financial Creditor has elected to pursue recovery proceedings and has no bonafide resolve to resolve the alleged insolvency of the Corporate Debtor.

It has been submitted that the respondent is estopped from pursuing parallel and inconsistent remedies. Therefore, continuation of the present Company Petition amounts to abuse of process of law and hence the present petition deserves to be dismissed.

The present application has been filed to adjourn the present Company Petition for four months and grant time to the Corporate Debtor to liquidate its dues payable in terms of settlement agreement dated 13.12.2024 from March 13, 2025 to April 30, 2025.

Based on pleading of the parties and the rival contentions raised by the Ld. Counsels for both the parties, the following points have arisen for determination:

We have gone through the case file carefully and perused the pleadings of the parties and documents placed on record by the parties and heard the arguments put forth by learned Counsels for the parties; and after hearing Mr. Ratnokar Banerjee Learned Senior Counsel appearing for the Financial Creditor and Mr. Jishnu Saha Learned Senior Counsel appearing for the Corporate Debtor, we shall now proceed to consider the present petition on its merits, specifically within the ambit of points involved in the instant application.

Mr. Jishnu Saha Learned Senior Counsel argued that the Financial Creditor has filed IA No. 176 of 2026 for judgment on admission before Ld. DRT in OA NO. 02 OF 2024 filed under Section 19 of the RDDBFI Act 1993. The Corporate Debtor has also taken action under the provision of SARFAESI Act 2002. The Corporate Debtor has challenged the action taken under the provision of SARFAESI Act 2002 before Ltd. Debt Recovery Tribunal by filing Securitisation Application No.115 of 2024 under Section 17 of the SARFAESI Act 2002. Thus, the Financial Creditor is seeking to use the IBC Code as a recovery mechanism and not as a resolution process.

He further argued that once an order of admission is passed and moratorium under Section 14 of the IBC Code, 2016 comes into operation, the Financial Creditor would be precluded from continuing proceedings before the Learned Debt Recovery Tribunal and under the provision of SARFAESI Act, 2002. The Financial Creditor has elected to pursue remedies under the RDDBFI Act, 1993 and is consequently estopped from prosecuting the present Company Petition under Section 7 of the IBC Code, 2016.

Mr. Jishnu Shah, Learned Sr. Counsel relied upon the judgment pronounced by the Hon'ble Supreme Court in Transcore us. Union of India & Anr. (2008) 1 SCC 125, wherein Hon’ble Supreme Court held that the doctrine of election applies where two or more co-existent remedies are available to a litigant and such remedies are inconsistent with each other. It is pertinent to refer relevant observation of Hon’ble Supreme Court which is as follow:

Hon'ble Supreme Court in case of Trascore (Supra) laid down the proposition of law that the proceedings under the RDDBFI Act, 1993 and the SARFAESI Act, 2002 are not mutually exclusive and may proceed simultaneously. The same analogy applies in a case where the proceedings under Section 7 have been initiated by the Financial Creditor as recognised in judgments passed by the Hon'ble Supreme Court in Kotak Mahindra Bank Ltd. vs. A . Balakrishnan, Tottempudi Salalith vs. State Bank of India and Elegna Cooperative Housing and Commercial Society Limited Us. Edelweiss Asset Reconstruction Company Limited & Anr., wherein it has been categorically held that pendency of recovery proceedings and/or enforcement proceedings does not create any bar to initiation of CIRP and that the doctrine of election cannot be invoked to prevent a Financial Creditor from approaching the Adjudicating Authority under Section 7 of the Insolvency and Bankruptcy Code, 2016.

Mr. Jishnu Saha, Learned Sr. Counsel further placed reliance on the case of Anita Jindal vs. Jindal Buildtech Pvt. Ltd. & Anr. 2022 SCC OnLine NCLAT 3748 wherein the debt itself was disputed and there were allegations of malicious initiation of CIRP process under Section 65 of the IBC Code. The facts of the present case are entirely different for the above cited case. In the present case, there exists no dispute with regard to debt and default as the Corporate Debtor has admitted the existence of debt and default in the reply affidavit and Settlement Agreement dated 13th December, 2024.

Mr. Jishnu Saha Learned Sr. Counsel further placed reliance on the case of Anjani Technoplast Limited vs. Shubh Gautam, reported in 2026 SCC OnLine 668 wherein core issue was whether insolvency proceedings could be resorted to as a substitute for execution of a Civil Court decree; however, no such issue is involved in the present case. The Financial Creditor is not having any such decree of Civil Court for which execution proceedings might have been instituted.

It is settled principle of law that in an application filed under Section 7 of IBC Code, if debt and default is established and there is no other impediment to admit the application, the initiation of CIRP process is but inevitable.

On this aspect, Hon'ble Supreme Court in case of Elegna Cooperative Housing and Commercial Society Limited Vs. Edelweiss Asset Reconstruction Company Limited & Anrs. 2026 SCC OnLine SC 882 recognised the proposition of law laid down in case of Innoventive Industries Limited Vs. ICCI Bank (2018) 1 SCC 407 and observed that:

Hon'ble Supreme Court while considering the issue of parallel proceedings and allegations of misuse of the Insolvency and Bankruptcy Code, 2016 as a recovery mechanism, in Elegna Cooperative Housing and Commercial Society Limited (supra) further observed in para no. 12.11 and 12.13 that:

Thus, even if a recovery certificate might have been issued by the Debt Recovery Tribunal in favour of the Financial Creditor, it would not disentitle the Financial Creditor from maintaining proceedings under Section 7 of the Insolvency and Bankruptcy Code, 2016. Consequently, the initiation of SARFAESI proceeding under SARFAESI Act 2002 and challenge of the same before Ld. DRT under Section 17 of the SARFAESI Act 2002 and pendency of recovery proceedings filed under Section 19 of RDDBFI Act 1993 wherein application for admission on judgment has been filed cannot attract the doctrine of election or estoppel.

Hon’ble Supreme Court in case of Tottempudi Salalith us. State Bank of India, (2024) 1 SCC 24, which has been relied upon by the Hon’ble Supreme Court in case of Elegna Cooperative Society Case(Supra), observed as follows:-

Therefore, in view of our aforesaid observation and law applicable thereon, we are of the view that pendency of proceeding under the provision of RDDBFI Act 1993 and initiation of SARFAESI proceeding by the Financial Creditor does not affect the proceeding of the present company petition for initiation of CIRP process against the Corporate Debtor.

It is settled principle of law that an application filed under Section 7 of the Code is acceptable so long as the debt is proved to be due and there has been occurrence or existence of default. What is material is that the default is for at least Rs. 1,00,00,000/-. In view of the Section 4 of the Code, the moment default is of Rupees one crore or more, the application to trigger Corporate Insolvency Resolution Process under the Code is maintainable.

In the facts of the present case, it is seen that the applicant clearly comes within the definition of Financial Creditor. The material placed on record further confirms that the applicant, financial creditor had sanctioned and disbursed loan an amount of more than rupees three hundred crores in favour of the Corporate Debtor.

Even otherwise, it is an admitted case of the Corporate Debtor that the Financial Creditor, vide sanction letter dated 29.06.2018, had sanctioned a non-revolving term loan of Rs. 320,00,00,000/-(Rupees Three hundred Twenty Crores Only) in its favour for the purpose of refinance of the existing secured and unsecured debt along with part finance of the construction cost for the projects for a tenure of 96 months with moratorium of 12 months from the date of first disbursement. After moratorium period 12 months, the principal loan amount was to be repaid in twenty eight (28) structured quarterly installments with interest at the rate of 4.55% per annum over and above Banks yearly MCLR.

It has further been admitted that the Financial Creditor has disbursed an amount of Rs. 341.28 crores against the total sanctioned amount of Rs. 343.50 crores. It is also an admitted fact on the part of the Corporate Debtor that due to non-release of security interest in Joka property by the Financial Creditor, the Corporate Debtor suffered immense loss and damage which resulted in failure of repayment of debt towards the Financial Creditor. It has also been admitted that creditors of the Corporate Debtor started approaching it with their claims; however, the Corporate Debtor could not satisfy them due to shortage of funds. It has further been admitted that due to various legal proceedings under IBC 2016, the Corporate Debtor faced immense financial distress. Thus, the corporate debtor has failed to show that there is no debt or default in existence so as to avoid the provisions of the Code.

The Corporate Debtor itself relied upon a settlement agreement dated 13.12.2024. It has been categorically stated therein that the Corporate Debtor, in order to resolve the dispute, submitted settlement offer vide letter dated 26.08.2024 and 06.11.2024 and the said offers were accepted by the Financial Creditor. The parties entered into the settlement agreement dated 13.12.2024 and the Corporate Debtor paid an amount of Rs. 25 crores. As per Schedule I of the Settlement Agreement, an aggregate amount of Rs. 390,26,71,834.42(Three Hundred Ninety Crore Twenty Six Lakh Seventy One Thousands Eight Hundred Thirty Four and Paisa Forty Two Only) is outstanding as on 01.12.2024 which comprises principal amount, interest, default interest, penal charges and other charges.

It has further been recorded in the settlement agreement that the Corporate Debtor had failed to repay the amounts due and had committed persistent breaches and defaults under the transaction documents. The relevant part of settlement agreement is reproduced verbatim as under:

It has also been recorded therein that the loan accounts of the borrowers were classified and reported as Non-Performing Assets. The borrower-wise outstanding dues has been admitted in Schedule-I of the Settlement Agreement. In respect of Ideal Real Estates Private Limited, a total admitted amount is of Rs. 390,26,71,834.42(Three Hundred Ninety Crore Twenty Six Lakh Seventy One Thousands Eight Hundred Thirty Four and Paisa Forty Two Only) is outstanding and due as on 1.12.2024 comprising principal, interest, default interest, penal charges and other charges and the principal outstanding being Rs. 298,51,46,858/-

The Settlement Agreement further records that the borrowers themselves approached the Financial Creditor for One Time Settlement through letters dated 26.08.2024, 09.10.2024, 12.11.2024 and 25.11.2024. The relevant recital of the settlement agreement is reproduced verbatim as under:

Therefore, the contention of the Corporate Debtor in its reply affidavit that the Corporate Debtor was constrained to enter into settlement agreement is beyond truth and imagination. The Corporate Debtor itself approached the Financial Creditor for amicable settlement of its outstanding dues. The Corporate Debtor along with Ideal Unique Realtors Pvt. Ltd and Ideal Aurum Nirman LLP jointly and severally agreed to pay Rs. 270 crores as settlement amount. The settlement agreement further records about payment of an upfront amount of Rs. 25 crores by demand drafts and the balance amount of Rs. 245 crores will be paid within 90 days from the date of settlement agreement.

The Settlement Agreement expressly conferred upon the Financial Creditor the absolute right to terminate the Agreement upon failure of the obligors to pay the settlement amount or any part thereof within the stipulated timelines, or upon breach of any covenant. Upon failure to abide by the terms of the Settlement Agreement, the said agreement was terminated by the Financial Creditor and communicated vide email dated March 15, 2025, letter dated March 17, 2025 and letter dated March 18, 2026.

Thus, it has been established from pleading and documentary evidence available on record coupled with admission of the Corporate Debtor that there is debt above the threshold limit as statutorily fixed by Section 4 of IBC 2016 and there is default in payment of debt on the part of the Corporate Debtor.

On a bare perusal of Form - I filed under Section 7 of the Code read with Rule 4 of the Rules coupled with admission of the Corporate Debtor in its reply affidavit and settlement agreement dated 13.12.2024 proves that the form is complete and there is no infirmity in the same. It is also seen that there is no disciplinary proceeding pending against the proposed Interim Resolution Professional.

We are satisfied that the present application is complete in all respects and the applicant financial creditor is entitled to claim its outstanding financial debt from the corporate debtor and that there has been default in payment of the financial debt.

As a sequel to the above discussion and in terms of Section 7(5)(a) of the Code, the present application is admitted.

Mr. Bijay Murmuria, having registration number IBBI/IPA-001/IP/N00007/2016-17/10026 resident of Sumedha Management Solutions Pvt Limited, 6 A Geetanjali Apartment, 8 B Middleton Street ,Kolkata ,West Bengal ,700071 with Email ID: [email protected] is appointed as an Interim Resolution Professional for the corporate debtor.

In pursuance of Section 13(2) of the Code, We direct that public announcement shall be made by the Interim Resolution Professional immediately (3 days as prescribed by Explanation to Regulation 6(1) of the IBBI Regulations, 2016) with regard to admission of this application under Section 7 of the Insolvency and Bankruptcy Code, 2016.

We direct the applicant Financial Creditor to deposit a sum of Rupees three Lakhs with the Interim Resolution Professional namely Mr. Bijay Murmuria to meet out the expenses to perform the functions/duties assigned to him in accordance with Regulation 6 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The needful shall be done within three days from the date of receipt of this order by the Financial Creditor. The said amount however be subject to adjustment towards Resolution Process cost as per applicable rules.

The moratorium is declared in terms of Section 14 of the Code. The necessary consequences of imposing the moratorium flows from the provisions of Section 14(1)(a), (b), (c) & (d) of the Code. Thus, the following prohibitions are imposed:

It is made clear that the provisions of moratorium shall not apply to transactions which might be notified by the Central Government or the supply of the essential goods or services to the Corporate Debtor as may be specified, are not to be terminated or suspended or interrupted during the moratorium period. In addition, as per the Insolvency and Bankruptcy Code (Amendment) Act, 2018 which has come into force w.e.f. 06.06.2018, the provisions of moratorium shall not apply to the surety in a contract of guarantee to the corporate debtor in terms of Section 14(3)(b) of the Code.

The Interim Resolution Professional shall perform all his functions contemplated, inter-alia, by Sections 15, 17, 18, 19, 20 & 21 of the Code and transact proceedings with utmost dedication, honesty and strictly in accordance with the provisions of the Code, Rules and Regulations. It is further made clear that all the personnel connected with the Corporate Debtor, its promoters or any other person associated with the Management of the Corporate Debtor are under legal obligation under Section 19 of the Code to extend every assistance and cooperation to the Interim Resolution Professional as may be required by him in managing the day to day affairs of the ‘Corporate Debtor’. In case there is any violation committed by the ex-management or any tainted/illegal transaction by ex-directors or anyone else, the Interim Resolution Professional would be at liberty to make appropriate application to this Tribunal with a prayer for passing an appropriate order. The Interim Resolution Professional shall be under duty to protect and preserve the value of the property of the ‘Corporate Debtor’ as a part of its obligation imposed by Section 20 of the Code and perform all his functions strictly in accordance with the provisions of the Code, Rules and Regulations.

The Registry is directed to communicate a copy of the order to the Financial Creditor, the Corporate Debtor, the Interim Resolution Professional and the Registrar of Companies, West Bengal the earliest possible but not later than three days from today.

In view of our observation in Company Petition(IB) No. 166/KB/2024, the IA(IBC) No. 441/KB/2026, and IA(IBC) No. 765/KB/2025 stands disposed of.

The present intervention applications have been filed by homebuyers and landowners seeking intervention in the present Company Petition and praying for impleading them as a party to the present application on the ground that the applicant claims interest in the project and subject property either in capacity of homebuyers or landowners and seek participation in the adjudication of the present proceeding filed under Section 7 of IBC 2016.

The present Company Petition is at the pre-admission stage, and the scope of enquiry remains confined to determination of existence of financial debt and occurrence of default.

Hon'ble Supreme Court in case Elegna Cooperative Housing and Commercial Society Limited us. Edelweiss Asset Reconstruction Company Limited & Anr. 2026 SCC OnLine SC 882 has categorically held that proceedings under Section 7 of the IBC 2016 at the admission stage remain essentially bipartite in nature between the Financial Creditor and the Corporate Debtor and that unrelated third parties do not possess any independent right of audience at such stage. The relevant observation of the Hon’ble Apex Court is as follow that:

Hon'ble Supreme Court further observed as follows:-

Hon'ble Supreme Court in Elegna Co-operative Society case(Supra) has also recognised that the Insolvency and Bankruptcy Code, 2016 itself contains a complete statutory mechanism safeguarding the interests of homebuyers and other stakeholders. The Hon'ble Supreme Court observed in para no. 13.21 as follows:-

Consequently, permitting such intervention at this stage would enlarge and complicate the limited enquiry contemplated under Section 7 and convert the present proceedings into a forum for adjudication of collateral and inter-se disputes wholly outside the scope of admission proceedings.

Accordingly, the rights and interests of stakeholders, including homebuyers, are adequately protected under the statutory framework of the Insolvency and Bankruptcy Code, 2016 at appropriate stage. Therefore, the present applications seeking intervention and impleadment is dismissed being not maintainable at this stage.

Consequently, the Ivn.P(IBC) No. 39/KB/2025 and Ivn.P No. 08/KB/2026 stands disposed of as ordered above.

Labh Singh Member(Judicial)

The applicant, Yes Bank Limited has filed the present application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (for short “IBC Code”) read with rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (for brevity ‘the Rules’) with a prayer to trigger Corporate Insolvency Resolution Process(for short ‘CIRP’) in respect of respondent Company, M/s Ideal Real Estate Private Limited.

It is appropriate to mention that the applicant Bank, is a public Company incorporated under the Companies Act, 1956 and Banking Company within the meaning of Section 5(C) of the Banking Regulation Act, 1949, having its Registered Office at Yes Bank House, Prabhat Nagar, Off Western Express Highway, Santacruz East, Mumbai - 400 055. Northern Regional Corporate Office: Plot No. C, Max towers, Ground Floor, 4th, 5th, 14th (A) Floor, 001A/1, Sector 16B, Noida, Uttar Pradesh- 201 301.

Mr. Ankit Tulshan, Executive Vice President, duly authorized on behalf of applicant, has preferred the present application on behalf of the applicant for initiation of insolvency resolution process against the respondent under the IBC Code. A copy of the Power of Attorney dated 01.12.2023 has been placed on record as Annexure-I.

The Respondent Company, M/s Ideal Real Estate Private Limited(hereinafter to be referred as “Corporate Debtor”) against whom initiation of CIRP process has been prayed for, was incorporated on 07.10.1998 having its registered office situated at 50, Jawaharlal Nehru Road, 11^th Floor, Kolkata-700071. Since the registered office of the Corporate Debtor is situated at Kolkata, and hence, this Adjudicating Authority, having territorial jurisdiction over the State of West Bengal, is the Adjudicating Authority in relation to the prayer for initiation of CIRP process in respect of Corporate Debtor under sub-section (1) of Section 60 of the IBC Code.

Briefly stated the applicant’s case is that the Corporate Debtor has been a constituent of the Financial Creditor and the relationship of Banker and constituent had been maintained; and as a result thereof, the Corporate Debtor approached the Financial Creditor for availing loan facilities. One Srawan Kumar Himatsingka was the livewire of the Corporate Debtor and other group of companies and had all alone represented the Corporate Debtor and other group of companies with the Financial Creditor. He had executed various documents to avail loan facilities.

The Corporate Debtor, in consonance with Memorandum and Articles of Association, approached the Financial Creditor with a request to avail facilities for which a Board Resolution dated 29.06.2018 was passed by the Corporate Debtor. The Financial Creditor, after considering the request made by the Corporate Debtor and scrutinising the relevant documents submitted, issued a facility letter dated 29.06.2018 bearing no. YBL/DEL/FL/0513/2018-19 and inter alia sanctioned term loan facilities of Rs. 320,00,00,000.

Thereafter, vide addendum facility letter June, 2018 bearing no. YBL/DEL/FL/0514/2018-19, the Financial Creditor prescribed certain additional terms and conditions including levy of additional facility fees. Further, the Financial Creditor issued another addendum facility letter dated June 29, 2018 bearing no. YBL/DEL/FL/0526/2018-19 in favour of the Corporate Debtor wherein the Financial Creditor at the request of the Corporate Debtor sanctioned additional facilities including term loan facility of Rs. 200,00,00,000/- including an FCNR facility of Rs. 200 crores as its sub limit and certain working capital limits in the nature of forward/swaps of Rs. 40 Crores, Overdraft limit aggregating to Rs. 30 Crores and Financial Creditor guarantee of Rs. 20 crores with a condition that the overall exposure of the Corporate Debtor would not exceed an amount of Rs. 320,00,00,000 in any event excluding forwards and swaps of Rs. 40 Crores. However, it is to be noted that the additional facilities as sanctioned vide the above Facility letter dated June 29, 2018 bearing No. YBL/DEL/FL/0526/2018-19 were not availed by the Borrower and were subsequently cancelled by the Financial Creditor vide Facility Letter dated July 13, 2020 bearing no. YBL/DEL/FL/0239/2020-21.

The Corporate Debtor, in consideration of the Financial Creditor having agreed to grant the aforesaid credit facility, provided various securities and guarantees and executed various loan/banking documents on 04.09.2018 for the purpose of such credit facilities granted. The Corporate Debtor, in order to secure the loan amount, hypothecated the securities by executing hypothecation deed dated 05.02.2019.

The Financial Creditor, vide Facility Letters bearing No. YBL/DEL/FL/1677/2018-19 dated January 1, 2019, letter bearing no. KOLKATA YBL/DEL/FL/2209/2018-19 dated March 28, 2019, letter bearing YBL/DEL/FL/2213/2018-19 March 2019, and letter no. YBL/DEL/FL/1245/2020-21 February 04, 2021, modified certain terms and conditions of the loan facilities including change in the purpose of the loan, levy of additional facility fees etc., charge of penal interest, and modification in pre-payment penalty etc.

The Corporate Debtor, in view of prevailing Covid 19 situation, had availed of the moratorium benefits in terms of RBI Circulars and expressed its inability to make payment of the accrued interest obligation on due date. Therefore, on the basis of the request made by the Corporate Debtor, the Financial Creditor agreed to provide facilities in the nature of funded interest Term loan which would comprise the accrued interest obligation of the Corporate Debtor as on September 02, 2020. The Corporate Debtor, in pursuance thereof, executed two separate agreements dated 20.01.2021. The additional facilities sanctioned to group companies of the Corporate Debtor were extended by way of execution of Supplemental Mortgage Deeds dated 18.08.2021.

The group of Companies of the Corporate debtor created hypothecation and equitable mortgage in respect of their respective immovable properties on 28.01.2022 and 29.01.2022. The Financial Creditor, vide Facility Letter dated March 30, 2023 bearing No. YBL/ KOL/FL/722/2022-23, changed the mechanism of pricing and also ratified the security created for securing the dues of the Corporate Debtor. The Corporate Debtor and its group of Companies executed Deeds of Rectification dated 17.05.2022.

The Corporate Debtor failed to operate the said accounts in terms of the loan agreements. The Corporate Debtor defaulted in repayment of principal and interest thereon. Consequently, the account became irregular and classified as Non-Performing Asset on 30.05.2023. The Financial Creditor issued notice dated 26.07.2023 under Section 138 of Negotiable Instrument Act to the Corporate Debtor and its directors.

The Corporate Debtor, despite repeated requests and reminders, failed to repay the outstanding dues in the said accounts as per term and condition of the loan agreements. Therefore, the Financial Creditor was compelled to recall the loan amount and issued demand notices, last of which were sent on 30^th June, 2023.

It is further submitted that the said Srawan Kumar Himatsingka died on 02.11.2023 leaving behind his legal heirs Ekta Sodhani, Nakul Himatsingka and Kanak Himatsingka. The said legal heirs are bound to discharge legal obligation of late Sh. Srawan Kumar Himatsingka.

On 04.12.2023, the Financial Creditor filed an application under Section 19 of the Recovery of Debts and Bankruptcy Act, 1993 before the Ld. DRT-I , Kolkata Bench bearing O.A. No. 02 of 2024.

Sub-section (3)(b) of Section 7 mandates the financial creditor to furnish the name of an Interim Resolution Professional. In compliance thereof the applicant has proposed the name of Ram Ratan Kanoongo, for appointment as Interim Resolution Professional having registration number IBBI/IPA-001/IP/P00070/2017-18/10156 resident of 708, Raheja Centre, 7^th Floor, Nariman Point, Mumbai with email ID [email protected]. Mr. Ram Ratan Kanoongo has agreed to accept the appointment as the interim resolution professional and has signed a communication in Form 2 in terms of Rule 9(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. There is a declaration made by him that no disciplinary proceedings are pending against him in Insolvency and Bankruptcy Board of India or elsewhere. In addition, further necessary disclosures have been made by Mr. Ram Ratan Kanoongo as per the requirement of the IBBI Regulations. Accordingly, it is seen that the requirement of Section 7(3)(b) of the Code has been satisfied.

The applicant, in order to prove its case, has relied upon certificate of incorporation and Master Data of Corporate Debtor Annexure-‘II’, Balance Sheet for the Financial Year 2021-22 Annexure-‘III’, Written Communication of IRP Annexure-‘IV’, Memorandum and Article of Association of Corporate Debtor Annexure-‘A’, Board Resolution of Corporate Debtor Annexure-‘B’, Facility Letters dated 29.06.2018 and 13.07.2020 Annexure-‘C’, Master Facility Agreement dated 04.09.2018 Annexure-‘D’, Two Loan Agreements both dated 04.09.2018 Annexure-‘E’, Two Deeds of Undertaking along with separate undertaking cum indemnity all dated 04.09.2018 Annexure-‘F’, Letter of Lien dated 04.09.2018 Annexure-‘G’, Debit Authorisation Letter dated 04.09.2018 Annexure-‘H’, Demand Promissory Note dated 04.09.2018 and letter of continuity Annexure-‘I’, PDC for facility amount of Rs. 320,00,00,000/- along with three PDC for Rs. 12,00,00,000/-Annexure-‘J’, Deed of Hypothecation dated 05.02.2019 Annexure-‘K’, Power of Attorney dated 05.02.2019 Annexure-L, Deed of Pledge along with Power of Attorney Annexure-‘M’ to Annexure-‘P’, Undertaking Annexure-‘Q’, Deed of Guarantee Annexure-‘R’ to ‘T’, Facility Letter dated January 01, 2019, March 28, 2019, and February 04, 2021 Annexure-‘U’, Letter of Arrangement Annexure-‘V’, Supplemental Mortgage Deed and Deed of Rectification Annexure-‘W’, Directors Declaration and Memorandum of Entry both dated January 28, 2022 Annexure-‘Y’ & ‘Z’, Deed of Hypothecation dated 29.01.2022 Annexure- ‘A-1’, Facility Letter dated 30.03.2023 Annexure ‘B-1,’ Demand Notice Annexure ‘C-1’, Notice Annexure ‘D-1’, Statement of Account Annexure ‘E-1’, Certificate of Registration of Charge Annexure ‘F-1’, Schedule containing hypothecated and pledged properties Annexure-‘G-1’ and ‘H-1’, and CIBIL Report Annexure ‘J-1’.

The applicant has also placed on record a copy of record of default Annexure-‘I-1’ filed with NeSL (information utility) in respect of default on the part of the Corporate Debtor in its repayment owed to the Financial Creditor.

Therefore, as per part IV of the application, it is claimed that as on 07.03.2024 a sum of Rs. 3,486,237,862.78 /- is due and payable by the respondent company. The applicant has prayed for allowing the present application and admit the Corporate Debtor in the CIRP process.

Respondent appeared in pursuance of notice issued by this Tribunal and filed its reply raising preliminary objection that the present application is not maintainable either on facts or law. There is no relationship of creditor and debtor between the applicant and respondent. The respondent being Real Estate Company could not be termed as Corporate Debtor. There is no debt as defined in IBC Code; and accordingly, there is no default on the part of the Corporate Debtor.

On merits, it has been replied that the Corporate Debtor and the Financial Creditor floated diverse real estate projects as is evident from the present application. The Financial Creditor acted as promoter and represented to the prospective homebuyers that the projects have been prepared, vetted and developed by the Financial Creditor along with Corporate Debtor. The Corporate Debtor deployed its men and machinery for the purpose of developing the said project. The Financial Creditor played a role of financer and promoter of the said real estate projects. Therefore, no amount was disbursed by the Financial Creditor for the time value.

The Corporate Debtor, upon various offers made by the Financial Creditor in the year 2018, approached the Financial Creditor for availing credit facilities. The Financial Creditor sanctioned diverse credit facilities in favour of the Corporate Debtor which were modified later on from time to time upon agreed terms and conditions as evident from sanction letters and addendum issued by the Financial Creditor.

The Financial Creditor, vide sanction letter dated 29.06.2018, sanctioned a non-revolving term loan of Rs. 320,00,00,000/-(Rupees Three hundred Twenty Crores Only) in favour of the Corporate Debtor for the purpose of refinance the existing secured and unsecured debt along with part finance of the construction cost for the projects with a tenure of 96 months and moratorium of 12 months from the date of first disbursement. After a moratorium period of 12 months, the principal loan amount was to be repaid in twenty eight (28) structured quarterly installments with interest at the rate of 4.55% per annum over and above Banks yearly MCLR.

It has further been replied that despite sanction of loan amount as per sanction letter dated 09.08.2018, no disbursement in terms of sanction letter was made. The Financial Creditor has only disbursed an amount of Rs. 341.28 crores against the total sanctioned amount of Rs. 343.50 crores. The disbursal was crucial for implementation and completion of the projects and subsequent sale of the flats and units. Consequently, the Corporate Debtor suffered loss and damage and therefore, the Financial Creditor is estopped from taking coercive steps against the Corporate Debtor.

It has further been replied that during Covid-19 period, the Financial Creditor cancelled the overdraft facility of Rs. 30 crore and term loan of Rs. 20 crore along with Performance Bank Guarantee of Rs. 20 crore and swap facility of Rs. 40 crores. The said letter has been suppressed by the Financial Creditor which is filed as annexure-A with a reply affidavit. Thus, a total facility of Rs. 110 crore was taken away from the Corporate Debtor without any reason in an arbitrary manner though funds were required at that stage due to prevailing Covid-19 situation. The Financial Creditor has failed to adhere to terms and conditions of sanction letters. The Financial Creditor was bound to disburse the loan amount and then claim recovery of the same.

The Financial Creditor, vide letter dated 03.07.2021, requested for various details from the Corporate Debtor with regard to various projects of the Corporate Debtor and the same were provided vide email dated 06.07.2021. The Financial Creditor was aware of dealing with the Corporate Debtor and its sister concerns with other Banks and Financial Institutions including ICICI Bank. The Financial Creditor, vide email dated 12.09.2021, alleged diversion of funds on account of sale proceeds not being routed through escrow account in entirety; however, escrow account was opened and maintained for the purpose of receipt of consideration from flat buyers. The flat buyers directly deposited the amount in the escrow account without involvement of the Corporate Debtor. The Financial Creditor was fully monitoring the sale of flats and receipt of consideration by the flat buyers in escrow account and despite this, the Financial Creditor levelled false allegation of diversion of funds against the Corporate Debtor.

It has further been replied that the Financial Creditor committed fundamental breaches of the contract entered between the parties which includes negligent act on the part of the Financial Creditor to make necessary disbursement of loan amount in favour of the Corporate Debtor which resulted in shortage of funds and delay in completion of projects and pressuring the Corporate Debtor to create collateral security in respect of Reckjoani and Tehoria Land despite no such obligation.

The Corporate Debtor has always bonafide intention to discharge legitimate dues of the Financial Creditor, and accordingly, proposed to liquidate the immovable asset which was contemplated at the time of disbursement of credit facilities. The Financial Creditor, in order to release security interest in the Joka property, imposed a condition of deposit of Rs. 30 Crore. The Financial Creditor was bound to release Joka property on receipt of environment clearance without any condition; however, due to non-release of security interest, the Corporate Debtor suffered immense loss and damage which resulted in failure of repayment of debt towards the Financial Creditor.

The Corporate Debtor, due to illegal practices adopted by the Financial Creditor, suffered shortage of funds. The creditors of the Corporate Debtor started approaching it with their claims; however, the Corporate Debtor could not satisfy them due to shortage of funds. The Corporate Debtor faced various legal proceedings under the provision of IBC Code wherein the Corporate Debtor was forced to settle by relinquishing its right in valuable properties. This further resulted in immense financial distress of the Corporate Debtor.

The Corporate Debtor could not complete the sale of units in various projects due to non-issuance of ‘No Objection Certificate’ (NOC) by the Financial Creditor which resulted in seeking refund of entire sale consideration paid by the flat buyers. Though Financial Creditor issued NOC for two units in Ideal Unique Centre; however, by another letter dated 22.06.2023 sought to cancel the NOC in respect of the said two units. The cancellation resulted in a demand of refund of the entire sale consideration paid by the flat buyers.

The Financial Creditor by issuing public advertisement/notification informed to the public at large to exercise caution while purchasing flats constructed by the Corporate Debtor. This resulted in loss to the Corporate Debtor both financially and in its reputation to goodwill in the market.

The Financial Creditor recalled the loan facility by issuing a letter dated 30.06.2023; however, on the same day, renewed the loan facility to the extent of Rs. 299,00,90,701.45/-. Thus, the Financial Creditor acquiesced to all the alleged default of the Corporate Debtor and waived its right to take any step in respect thereof by granting further credit facilities. Therefore, the Financial Creditor cannot be permitted to proceed further with the present application.

The Financial Creditor issued demand notice dated 12.09.2023 under Section 13(2) of the SARFAESI Act 2002 to the Corporate Debtor, notice dated 11.10.2023 to Ideal Aurum Nirman LLP and notice dated 11.01.2024 to ideal Unique Realtor Pvt. Ltd which were duly responded by the Corporate Debtor. The account classified as non performing asset(NPA) by the Financial Creditor is contrary to guidelines issued by Reserve Bank of India. The Financial Creditor also issued show cause notice upon the Corporate Debtor to declare the account as ‘Fraud Account’ vide email dated 15.09.2023 which is illegal and arbitrary. The Financial Creditor also proceeded to take symbolic possession of secured assets under Section 13(4) of the SARFAESI Act 2002 which is illegal and void. The Financial Creditor also proceeded to declare the Corporate Debtor as wilful defaulter by issuing notice dated 12.06.2024.

The Financial Creditor has insisted upon the Corporate Debtor to submit one time settlement proposal. The Corporate Debtor, in order to resolve the dispute, submitted a settlement offer vide letter dated 26.08.2024 and 06.11.2024. The said offers were accepted by the Financial Creditor for which the settlement agreement dated 13.12.2024 was executed between the parties. The Corporate Debtor had paid an amount of Rs. 25 crores which was unconditionally accepted by the Financial Creditor.

Thus, the Financial Creditor is well aware that the Corporate Debtor is a solvent company and did not commit any default at all. Therefore, the Financial Creditor has no cause of action to proceed under provision of IBC 2016. The present application has been filed to pressurise the Corporate Debtor for collateral purpose.

It has further been replied that the diverse proceedings have been instituted by various parties interested in the real estate projects of the Corporate Debtor, and in view of pendency of the same, the present application deserves to be dismissed. The admission of the present petition would amount to interference with the lawful right of the respective parties including homebuyers. Therefore, the present company petition requires to be dismissed with cost.

The applicant Company filed its rejoinder denying the averment made in the reply and reiterating the facts as pleaded in the present petition which are not reproduced here for sake of brevity.

The present application has been filed by the Corporate Debtor for dismissal of the Company Petition No. 176/KB/2024.

It has been submitted that after filing of the present Company Petition, the Financial Creditor has pursued its recovery proceedings by filing IA No. 176 of 2026 in pending OA No. 02 of 2024 seeking judgment on admission before Ld. DRT Kolkata. Thus the Financial Creditor has elected to pursue recovery proceedings and has no bonafide resolve to resolve the alleged insolvency of the Corporate Debtor.

It has been submitted that the respondent is estopped from pursuing parallel and inconsistent remedies. Therefore, continuation of the present Company Petition amounts to abuse of process of law and hence the present petition deserves to be dismissed.

The present application has been filed to adjourn the present Company Petition for four months and grant time to the Corporate Debtor to liquidate its dues payable in terms of settlement agreement dated 13.12.2024 from March 13, 2025 to April 30, 2025.

Based on pleading of the parties and the rival contentions raised by the Ld. Counsels for both the parties, the following points have arisen for determination:

We have gone through the case file carefully and perused the pleadings of the parties and documents placed on record by the parties and heard the arguments put forth by learned Counsels for the parties; and after hearing Mr. Ratnokar Banerjee Learned Senior Counsel appearing for the Financial Creditor and Mr. Jishnu Saha Learned Senior Counsel appearing for the Corporate Debtor, we shall now proceed to consider the present petition on its merits, specifically within the ambit of points involved in the instant application.

Mr. Jishnu Saha Learned Senior Counsel argued that the Financial Creditor has filed IA No. 176 of 2026 for judgment on admission before Ld. DRT in OA NO. 02 OF 2024 filed under Section 19 of the RDDBFI Act 1993. The Corporate Debtor has also taken action under the provision of SARFAESI Act 2002. The Corporate Debtor has challenged the action taken under the provision of SARFAESI Act 2002 before Ltd. Debt Recovery Tribunal by filing Securitisation Application No.115 of 2024 under Section 17 of the SARFAESI Act 2002. Thus, the Financial Creditor is seeking to use the IBC Code as a recovery mechanism and not as a resolution process.

He further argued that once an order of admission is passed and moratorium under Section 14 of the IBC Code, 2016 comes into operation, the Financial Creditor would be precluded from continuing proceedings before the Learned Debt Recovery Tribunal and under the provision of SARFAESI Act, 2002. The Financial Creditor has elected to pursue remedies under the RDDBFI Act, 1993 and is consequently estopped from prosecuting the present Company Petition under Section 7 of the IBC Code, 2016.

Mr. Jishnu Shah, Learned Sr. Counsel relied upon the judgment pronounced by the Hon'ble Supreme Court in Transcore us. Union of India & Anr. (2008) 1 SCC 125, wherein Hon’ble Supreme Court held that the doctrine of election applies where two or more co-existent remedies are available to a litigant and such remedies are inconsistent with each other. It is pertinent to refer relevant observation of Hon’ble Supreme Court which is as follow:

Hon'ble Supreme Court in case of Trascore (Supra) laid down the proposition of law that the proceedings under the RDDBFI Act, 1993 and the SARFAESI Act, 2002 are not mutually exclusive and may proceed simultaneously. The same analogy applies in a case where the proceedings under Section 7 have been initiated by the Financial Creditor as recognised in judgments passed by the Hon'ble Supreme Court in Kotak Mahindra Bank Ltd. vs. A . Balakrishnan, Tottempudi Salalith vs. State Bank of India and Elegna Cooperative Housing and Commercial Society Limited Us. Edelweiss Asset Reconstruction Company Limited & Anr., wherein it has been categorically held that pendency of recovery proceedings and/or enforcement proceedings does not create any bar to initiation of CIRP and that the doctrine of election cannot be invoked to prevent a Financial Creditor from approaching the Adjudicating Authority under Section 7 of the Insolvency and Bankruptcy Code, 2016.

Mr. Jishnu Saha, Learned Sr. Counsel further placed reliance on the case of Anita Jindal vs. Jindal Buildtech Pvt. Ltd. & Anr. 2022 SCC OnLine NCLAT 3748 wherein the debt itself was disputed and there were allegations of malicious initiation of CIRP process under Section 65 of the IBC Code. The facts of the present case are entirely different for the above cited case. In the present case, there exists no dispute with regard to debt and default as the Corporate Debtor has admitted the existence of debt and default in the reply affidavit and Settlement Agreement dated 13th December, 2024.

Mr. Jishnu Saha Learned Sr. Counsel further placed reliance on the case of Anjani Technoplast Limited vs. Shubh Gautam, reported in 2026 SCC OnLine 668 wherein core issue was whether insolvency proceedings could be resorted to as a substitute for execution of a Civil Court decree; however, no such issue is involved in the present case. The Financial Creditor is not having any such decree of Civil Court for which execution proceedings might have been instituted.

It is settled principle of law that in an application filed under Section 7 of IBC Code, if debt and default is established and there is no other impediment to admit the application, the initiation of CIRP process is but inevitable.

On this aspect, Hon'ble Supreme Court in case of Elegna Cooperative Housing and Commercial Society Limited Vs. Edelweiss Asset Reconstruction Company Limited & Anrs. 2026 SCC OnLine SC 882 recognised the proposition of law laid down in case of Innoventive Industries Limited Vs. ICCI Bank (2018) 1 SCC 407 and observed that:

Hon'ble Supreme Court while considering the issue of parallel proceedings and allegations of misuse of the Insolvency and Bankruptcy Code, 2016 as a recovery mechanism, in Elegna Cooperative Housing and Commercial Society Limited (supra) further observed in para no. 12.11 and 12.13 that:

Thus, even if a recovery certificate might have been issued by the Debt Recovery Tribunal in favour of the Financial Creditor, it would not disentitle the Financial Creditor from maintaining proceedings under Section 7 of the Insolvency and Bankruptcy Code, 2016. Consequently, the initiation of SARFAESI proceeding under SARFAESI Act 2002 and challenge of the same before Ld. DRT under Section 17 of the SARFAESI Act 2002 and pendency of recovery proceedings filed under Section 19 of RDDBFI Act 1993 wherein application for admission on judgment has been filed cannot attract the doctrine of election or estoppel.

Hon’ble Supreme Court in case of Tottempudi Salalith us. State Bank of India, (2024) 1 SCC 24, which has been relied upon by the Hon’ble Supreme Court in case of Elegna Cooperative Society Case(Supra), observed as follows:-

Therefore, in view of our aforesaid observation and law applicable thereon, we are of the view that pendency of proceeding under the provision of RDDBFI Act 1993 and initiation of SARFAESI proceeding by the Financial Creditor does not affect the proceeding of the present company petition for initiation of CIRP process against the Corporate Debtor.

It is settled principle of law that an application filed under Section 7 of the Code is acceptable so long as the debt is proved to be due and there has been occurrence or existence of default. What is material is that the default is for at least Rs. 1,00,00,000/-. In view of the Section 4 of the Code, the moment default is of Rupees one crore or more, the application to trigger Corporate Insolvency Resolution Process under the Code is maintainable.

In the facts of the present case, it is seen that the applicant clearly comes within the definition of Financial Creditor. The material placed on record further confirms that the applicant, financial creditor had sanctioned and disbursed loan an amount of more than rupees three hundred crores in favour of the Corporate Debtor.

Even otherwise, it is an admitted case of the Corporate Debtor that the Financial Creditor, vide sanction letter dated 29.06.2018, had sanctioned a non-revolving term loan of Rs. 320,00,00,000/-(Rupees Three hundred Twenty Crores Only) in its favour for the purpose of refinance of the existing secured and unsecured debt along with part finance of the construction cost for the projects for a tenure of 96 months with moratorium of 12 months from the date of first disbursement. After moratorium period 12 months, the principal loan amount was to be repaid in twenty eight (28) structured quarterly installments with interest at the rate of 4.55% per annum over and above Banks yearly MCLR.

It has further been admitted that the Financial Creditor has disbursed an amount of Rs. 341.28 crores against the total sanctioned amount of Rs. 343.50 crores. It is also an admitted fact on the part of the Corporate Debtor that due to non-release of security interest in Joka property by the Financial Creditor, the Corporate Debtor suffered immense loss and damage which resulted in failure of repayment of debt towards the Financial Creditor. It has also been admitted that creditors of the Corporate Debtor started approaching it with their claims; however, the Corporate Debtor could not satisfy them due to shortage of funds. It has further been admitted that due to various legal proceedings under IBC 2016, the Corporate Debtor faced immense financial distress. Thus, the corporate debtor has failed to show that there is no debt or default in existence so as to avoid the provisions of the Code.

The Corporate Debtor itself relied upon a settlement agreement dated 13.12.2024. It has been categorically stated therein that the Corporate Debtor, in order to resolve the dispute, submitted settlement offer vide letter dated 26.08.2024 and 06.11.2024 and the said offers were accepted by the Financial Creditor. The parties entered into the settlement agreement dated 13.12.2024 and the Corporate Debtor paid an amount of Rs. 25 crores. As per Schedule I of the Settlement Agreement, an aggregate amount of Rs. 390,26,71,834.42(Three Hundred Ninety Crore Twenty Six Lakh Seventy One Thousands Eight Hundred Thirty Four and Paisa Forty Two Only) is outstanding as on 01.12.2024 which comprises principal amount, interest, default interest, penal charges and other charges. 29. It has further been recorded in the settlement agreement that the Corporate Debtor had failed to repay the amounts due and had committed persistent breaches and defaults under the transaction documents. The relevant part of settlement agreement is reproduced verbatim as under:

It has also been recorded therein that the loan accounts of the borrowers were classified and reported as Non-Performing Assets. The borrower-wise outstanding dues has been admitted in Schedule-I of the Settlement Agreement. In respect of Ideal Real Estates Private Limited, a total admitted amount is of Rs. 390,26,71,834.42(Three Hundred Ninety Crore Twenty Six Lakh Seventy One Thousands Eight Hundred Thirty Four and Paisa Forty Two Only) is outstanding and due as on 1.12.2024 comprising principal, interest, default interest, penal charges and other charges and the principal outstanding being Rs. 298,51,46,858/-

The Settlement Agreement further records that the borrowers themselves approached the Financial Creditor for One Time Settlement through letters dated 26.08.2024, 09.10.2024, 12.11.2024 and 25.11.2024. The relevant recital of the settlement agreement is reproduced verbatim as under:

Therefore, the contention of the Corporate Debtor in its reply affidavit that the Corporate Debtor was constrained to enter into settlement agreement is beyond truth and imagination. The Corporate Debtor itself approached the Financial Creditor for amicable settlement of its outstanding dues. The Corporate Debtor along with Ideal Unique Realtors Pvt. Ltd and Ideal Aurum Nirman LLP jointly and severally agreed to pay Rs. 270 crores as settlement amount. The settlement agreement further records about payment of an upfront amount of Rs. 25 crores by demand drafts and the balance amount of Rs. 245 crores will be paid within 90 days from the date of settlement agreement.

The Settlement Agreement expressly conferred upon the Financial Creditor the absolute right to terminate the Agreement upon failure of the obligors to pay the settlement amount or any part thereof within the stipulated timelines, or upon breach of any covenant. Upon failure to abide by the terms of the Settlement Agreement, the said agreement was terminated by the Financial Creditor and communicated vide email dated March 15, 2025, letter dated March 17, 2025 and letter dated March 18, 2026.

Thus, it has been established from pleading and documentary evidence available on record coupled with admission of the Corporate Debtor that there is debt above the threshold limit as statutorily fixed by Section 4 of IBC 2016 and there is default in payment of debt on the part of the Corporate Debtor.

On a bare perusal of Form - I filed under Section 7 of the Code read with Rule 4 of the Rules coupled with admission of the Corporate Debtor in its reply affidavit and settlement agreement dated 13.12.2024 proves that the form is complete and there is no infirmity in the same. It is also seen that there is no disciplinary proceeding pending against the proposed Interim Resolution Professional.

We are satisfied that the present application is complete in all respects and the applicant financial creditor is entitled to claim its outstanding financial debt from the corporate debtor and that there has been default in payment of the financial debt.

As a sequel to the above discussion and in terms of Section 7(5)(a) of the Code, the present application is admitted.

Mr. Ram Ratan Kanoongo, having registration number IBBI/IPA-001/IP/P00070/2017-18/10156 resident of 708, Raheja Centre, 7^th Floor, Nariman Point, Mumbai with email ID [email protected]. is appointed as an Interim Resolution Professional for the corporate debtor.

In pursuance of Section 13(2) of the Code, We direct that public announcement shall be made by the Interim Resolution Professional immediately (3 days as prescribed by Explanation to Regulation 6(1) of the IBBI Regulations, 2016) with regard to admission of this application under Section 7 of the Insolvency and Bankruptcy Code, 2016.

We direct the applicant Financial Creditor to deposit a sum of Rupees three Lakhs with the Interim Resolution Professional namely Mr. Ram Ratan Kanoongo to meet out the expenses to perform the functions/duties assigned to him in accordance with Regulation 6 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The needful shall be done within three days from the date of receipt of this order by the Financial Creditor. The said amount however be subject to adjustment towards Resolution Process cost as per applicable rules.

The moratorium is declared in terms of Section 14 of the Code. The necessary consequences of imposing the moratorium flows from the provisions of Section 14(1)(a), (b), (c) & (d) of the Code. Thus, the following prohibitions are imposed:

It is made clear that the provisions of moratorium shall not apply to transactions which might be notified by the Central Government or the supply of the essential goods or services to the Corporate Debtor as may be specified, are not to be terminated or suspended or interrupted during the moratorium period. In addition, as per the Insolvency and Bankruptcy Code (Amendment) Act, 2018 which has come into force w.e.f. 06.06.2018, the provisions of moratorium shall not apply to the surety in a contract of guarantee to the corporate debtor in terms of Section 14(3)(b) of the Code.

The Interim Resolution Professional shall perform all his functions contemplated, inter-alia, by Sections 15, 17, 18, 19, 20 & 21 of the Code and transact proceedings with utmost dedication, honesty and strictly in accordance with the provisions of the Code, Rules and Regulations. It is further made clear that all the personnel connected with the Corporate Debtor, its promoters or any other person associated with the Management of the Corporate Debtor are under legal obligation under Section 19 of the Code to extend every assistance and cooperation to the Interim Resolution Professional as may be required by him in managing the day to day affairs of the ‘Corporate Debtor’. In case there is any violation committed by the ex-management or any tainted/illegal transaction by ex-directors or anyone else, the Interim Resolution Professional would be at liberty to make appropriate application to this Tribunal with a prayer for passing an appropriate order. The Interim Resolution Professional shall be under duty to protect and preserve the value of the property of the ‘Corporate Debtor’ as a part of its obligation imposed by Section 20 of the Code and perform all his functions strictly in accordance with the provisions of the Code, Rules and Regulations.

The Registry is directed to communicate a copy of the order to the Financial Creditor, the Corporate Debtor, the Interim Resolution Professional and the Registrar of Companies, West Bengal the earliest possible but not later than three days from today.

In view of our observation in Company Petition(IB) No. 166/KB/2024, the IA(IBC) No. 441/KB/2026, and IA(IBC) No. 765/KB/2025 stands disposed of.

Ivn.P(IBC) No. 39/KB/2025 with Ivn.P No. 08/KB/2026

The present intervention applications have been filed by homebuyers and landowners seeking intervention in the present Company Petition and praying for impleading them as a party to the present application on the ground that the applicant claims interest in the project and subject property either in capacity of homebuyers or landowners and seek participation in the adjudication of the present proceeding filed under Section 7 of IBC 2016.

The present Company Petition is at the pre-admission stage, and the scope of enquiry remains confined to determination of existence of financial debt and occurrence of default.

Hon'ble Supreme Court in case Elegna Cooperative Housing and Commercial Society Limited us. Edelweiss Asset Reconstruction Company Limited & Anr. 2026 SCC OnLine SC 882 has categorically held that proceedings under Section 7 of the IBC 2016 at the admission stage remain essentially bipartite in nature between the Financial Creditor and the Corporate Debtor and that unrelated third parties do not possess any independent right of audience at such stage. The relevant observation of the Hon’ble Apex Court is as follow that:

Hon'ble Supreme Court in Elegna Co-operative Society case(Supra) has also recognised that the Insolvency and Bankruptcy Code, 2016 itself contains a complete statutory mechanism safeguarding the interests of homebuyers and other stakeholders. The Hon'ble Supreme Court observed in para no. 13.21 as follows:-

Consequently, permitting such intervention at this stage would enlarge and complicate the limited enquiry contemplated under Section 7 and convert the present proceedings into a forum for adjudication of collateral and inter-se disputes wholly outside the scope of admission proceedings.

Accordingly, the rights and interests of stakeholders, including homebuyers, are adequately protected under the statutory framework of the Insolvency and Bankruptcy Code, 2016 at appropriate stage. Therefore, the present applications seeking intervention and impleadment is dismissed being not maintainable at this stage.

Consequently, the Ivn.P(IBC) No. 39/KB/2025 and Ivn.P No. 08/KB/2026 stands disposed of as ordered above.