Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले

O R D E R 
1. The present appeal challenges the order passed by the
National   Company  Law   Appellate   Tribunal,   Principal   Bench,
New Delhi (hereinafter referred to as “the NCLAT”) dated 22nd
November, 2021, in I.A. No.1115 of 2020 in Company Appeal
(AT)   (Insolvency)   No.   1507   of   2019,   thereby   rejecting   the
Modification Application filed by the appellant herein.  Vide the
impugned order, the NCLAT observed that, in the meantime, if
settlement takes place between the parties for completion of the
housing project, the same can be filed under Section 12A of the
Insolvency and Bankruptcy Code, 2016 (hereinafter referred to
as “the IBC”) before the Adjudicating Authority.   The NCLAT
also   directed   the   Interim   Resolution   Professional   (“IRP”   for
short)/Resolution   Professional   (“RP”   for   short)   to   hold   the
meeting of the Committee of Creditors (hereinafter referred to as
“CoC”) within ten days from the date of order and decide the
future course of action about a resolution for completion of the
Corporate Insolvency Resolution Process (hereinafter referred to
as “CIRP”) of the respondent No.1­company (hereinafter referred
to as “the Corporate Debtor”).  
2. The facts in brief giving rise to the present appeal are as
3. The  appellant  herein  is  the  Suspended  Director  of  the
Corporate Debtor.  The respondent No.2 herein had booked a
flat in the housing project launched by the Corporate Debtor.
Subsequently,   vide   a   letter   dated   31st  July,   2018,   the
respondent No.2 cancelled the booking and demanded refund of
the amount of Rs.32,27,591/­ from the Corporate Debtor.  
4. On failure of the appellant in refunding the amount, the
respondent No.2 filed an application under Section 7 of the IBC
against the Corporate Debtor for initiation of CIRP before the
National   Company   Law   Tribunal,   New   Delhi   (hereinafter
referred to as “the NCLT”).   The NCLT vide order dated 22nd
November, 2019, admitted the said application and appointed
an   IRP.     The   IRP   was   directed   to   initiate   the   CIRP   of   the
Corporate Debtor as per the provisions of the IBC.  
5. The   appellant   being   aggrieved   by   the   order   dated   22nd
November,   2019,   filed   an   appeal   before   the   NCLAT,   being
Company   Appeal   (AT)   (Insolvency)   No.1507   of   2019.     The
NCLAT vide its order dated 19th December, 2019, issued notice
and passed an interim order, thereby directing the IRP not to
constitute CoC.  
6. It was submitted by the appellant herein before the NCLAT
that he was ready and willing to settle the matter with the
respondent No.2.   It was further submitted by him that the
project was complete almost to the extent of 70­75% and that
he had arranged the funds/private financier to complete the
7. In light of the submission made by the appellant herein,
the NCLAT vide order dated 31st  January, 2020, directed the
appellant   herein   to   file   proposed   settlement   terms/plan
disclosing all material particulars with regard to completion of
the   housing   project.     Accordingly,   the   appellant   herein
submitted/filed   the   proposed   settlement   terms/plan   on   13th
February, 2020.  The IRP had submitted his status report a day
prior, on 12th February, 2020, stating therein that most of the
Allottees   decided   to   have   possession   of   the   flats.     In   the
meantime, the appellant settled the matter with the respondent
No.2 herein.  Despite the settlement with the respondent No.2
and   appellant’s   readiness   and   willingness   to   complete   the
project,   the   NCLAT,   vide   order   dated   26th  February,   2020,
modified   the   interim   order   dated   19th  December,   2019   and
directed the IRP to go ahead with the constitution of CoC and
carry forward the CIRP.   The said order dated 26th February,
2020   was   passed   by   the   NCLAT   on   the   ground   that   the
settlement   arrived   at   by   the   appellant   was   only   with   the
respondent No.2 and the settlement plan did not encompass all
the Allottees.  
8. The appellant therefore approached this Court by way of
Civil Appeal No. 1928 of 2020.  This Court vide order dated 5th
March, 2020, permitted the appellant to approach the NCLAT
for modification of the order dated 26th February, 2020, so as to
present the settlement plan covering all the Allottees. Vide the
said order of this Court dated 5th March, 2020, liberty was also
granted to the appellant to approach this Court again in case
the modification application was not allowed. 
9. Pursuant   thereto,   the   appellant   filed   the   modification
application being I.A. No.1115 of 2020 in Company Appeal (AT)
(Insolvency) No.1507 of 2019 before the NCLAT.  However, the
NCLAT vide the impugned order dated 22nd  November, 2021,
has rejected the said application for modification and passed
the   order  as  aforesaid.    Being  aggrieved,   the   appellant   has
approached this Court by way of present appeal.  
10. We have heard Shri Shyam Divan, learned Senior Counsel
appearing on behalf of the appellant, Shri D.N. Goburdhun,
learned Senior Counsel appearing on behalf of the applicantshome­buyers   and   Shri   Abhigya   Kushwah,   learned   counsel
appearing on behalf of the respondent No.1/ IRP/applicant.
11. Shri Shyam Divan, learned Senior Counsel, would submit
that in pursuance to the liberty granted by this Court, the
appellant   had   moved   the   NCLAT   placing   on   record   the
settlement with all the stakeholders. He submitted that not only
that but in pursuance to an order passed by the NCLAT dated
29th  September, 2021, a special meeting of the stakeholders
was   convened   on   23rd  October,   2021,   wherein   the   IRP,   the
representatives of the Corporate Debtor, the financial creditors,
ten   representatives   of   home­buyers   and   the   lawyers
representing home­buyers were present.  He submitted that the
perusal of the minutes of the meeting dated 23rd October, 2021
would show that there was a settlement between the appellant
and the home­buyers almost on all counts.   It is submitted
that, however, the NCLAT, without taking into consideration the
minutes   of   the   said   meeting,   has   erroneously   passed   the
impugned order, thereby holding that there was no settlement
with   all   the   home­buyers   and   that   there   was   trust   deficit
amongst the home­buyers.  He submitted that not only this but
Shri Kashi Nath Shukla, the Promoter of the Corporate Debtor,
has filed an undertaking on an affidavit, thereby undertaking to
complete the project within the stipulated period.  He therefore
submits that it is in the interest of the home­buyers that the
reverse   CIRP   should   be   permitted   to   be   continued   in
accordance with the decision taken in the meeting dated 23rd
October, 2021.
12. Shri D.N. Goburdhun,  learned Senior Counsel strongly
opposes   the   prayer   made   on   behalf   of   the   appellant.     He
submits that the appellant is not at all interested in completing
the   project.   He   submits   that   the   proposed   settlement
terms/plan   is   not   a  bona   fide  one   but   only   to   delay   the
completion of the project.   He submits that the initiation of
CIRP proceedings would ensure the completion of the project
and would be in the interest of the home­buyers.  He therefore
prays for dismissal of the present appeal.   
13. Shri Abhigya Kushwah, learned counsel, would submit
that   most   of   the   home­buyers   are   interested   in   getting   the
possession of the flats.   He therefore submits that this Court
may   pass   appropriate   orders   taking   into   consideration   the
interests of the purchasers of the flats. 
14. A perusal of the record would reveal that after the order
was passed by this Court on 5th  March, 2020, the appellant
submitted a Revised Proposed Settlement Plan on 15th March,
2021.  The IRP also submitted its Revised Status Report on 25th
March, 2021 before the NCLAT.  An email dated 9th July, 2021,
addressed by Senior Investment Associate, SBI Cap Ventures
Ltd.­SWAMIH Investment Fund to Shri Kashi Nath Shukla, the
Promoter of the Corporate Debtor, was also placed on record
before  the  NCLAT.     When   the   matter  was  listed  before  the
NCLAT   on   29th  September,   2021,   the   NCLAT   directed   the
IRP/RP,   who   was   present   before   the   NCLAT,   to   convene   a
meeting of CoC within  four weeks to consider the modified
Resolution Plan. The NCLAT further directed that home­buyers
may nominate not more than 10 persons, who will participate
in   the   meeting   and   represent   them.     The   NCLAT   further
directed   that   the   promoters   and   the   authorized   persons   of
Edelweiss   Asset   Reconstruction   Company   Ltd.     (Financier)
would also participate in the meeting so that they can explain
the   elements   of   the   modified   Resolution   Plan   to   the   homebuyers.     The   IRP/RP   was   directed   to   place   on   record   the
minutes of the meeting after the meeting was convened. The
matter was thereafter directed to be listed for hearing on 15th
November, 2021.  
15. In accordance with the directions issued by the NCLAT, a
meeting was convened on 23rd October, 2021.  A perusal of the
minutes of the meeting dated 23rd October, 2021 would reveal
that the ‘Modified Resolution Plan’ submitted by the Promoter
was presented on a Digital Screen.   During the presentation,
some home­buyers requested for further modification of some
contentious   points   of   the   ‘Modified   Resolution   Plan’.       The
perusal of the minutes of the said meeting would further reveal
that most of the concerns as expressed on behalf of the homebuyers were taken care of by the statement made on behalf of
the Promoters.  
16. It is further to be noted that the Status Report came to be
filed by the IRP before the NCLAT on 3rd November, 2021.  The
said Status Report of the IRP would reveal that the Promoter,
Shri Kashi Nath Shukla had informed that he would file an
addendum   to   his   ‘Modified   Resolution   Plan’   to   include   the
points   of   home­buyers   and   to   amend   the   plan   as   per
discussions in the Meeting. 
17. However, by the impugned order dated 22nd  November,
2021, the NCLAT has rejected the application for modification
and directed the CIRP to be continued.  
18. It could thus be seen that though a meeting of various
stakeholders   was   conducted   on   23rd  October,   2021   in
pursuance to the directions issued by the NCLAT dated 29th
September, 2021 and in which meeting most of the issues stood
resolved, the NCLAT has failed to take into consideration the
minutes of the said meeting dated 23rd October, 2021.  Not only
that, but the NCLAT has also not taken into consideration the
Revised Status Report dated 3rd November, 2021 submitted by
the IRP.  
19. An additional affidavit dated 27th  December, 2021, has
now been filed by the Promoter, Shri Kashi Nath Shukla before
this Court. It will be relevant to reproduce the same, which is
as under:
Soni Infratech Pvt. Ltd 
& Anr.    ... RESPONDENTS
“I   K.N.   Shukla   son   of   Sh   Kailash   Nath
Shukla resident of C­35 Sector 30, Noida, UP
201301 around 68 Years age and the major
share holder of M/S K N Consultant pvt Ltd.
which is promoter of M/S Soni Infratech Pvt
Ltd, (Corporate Debtor) Having its Registered
office   at   517   A,   Narain   Manzil,   23,
Barakhmbha   Road   Connaught   place,   New
Delhi­110001, presently do hereby solemnly
affirm and state as under:
1. That I am conversant with the facts of the
case as such I am competent to affirm
this affidavit. 
2. That I am the original land owner and
existing promoter of the Corporate Debtor
and I say that I have purchased the land
in 2007 for the development of the project
of   the   corporate   debtor   i.e.   M/S   Soni
Infratech Pvt Ltd. 
3. That   I   have   given   the   land   for   the
development to “SPIRE Group” to develop
the project vide development Agreement.
And   accordingly   the   Development   and
management of the project transferred to
erstwhile promoters i.e. Mr. Sunil Gandhi
and Mr. Ashish Bhalla of “Spire Group”. 
4. That   SPIRE   Group   has   launched   the
project   and   collected   the   booking   from
the home buyers for the said project and
appointed   construction   company   ERA
Group to complete the project. 
5. That After construction of 30­40% work,
ERA Group has stopped the work due to
inter­se  dispute in the ERA group which
lead   to   multiple   litigation   between   the
erstwhile promoters. 
6. That I have discussed about the delay of
the project and after a long discussion
and series of meeting, I managed to take
back the management of the project in
7. That I have terminated the Civil contract
of ERA and appointed the new contractor
i.e.   M/s   Indsao   Infratech  and   within   a
period of 18 months we have managed to
complete   approx   70%   of   total
construction   of   the   project   by   mid   of
2018.   The   Enclosed   Construction   audit
report by “Qonquest” confirms the stage
as approx 70% completed.
8. That   I   have   approached   Financial
Creditor M/s Edelweiss to grant further
loan to complete the project. But Due to
stay   granted   by   NCLT   in   CP   No.
N0.175/241/242/(ND)/   2018   arises   in
the inter­se disputes between Mr. Sunil
Gandhi and Mr. Ashish Bhalla, 50% of
shares of the corporate Debtor could not
be pledged in favour of M/s Edelweiss.
Thus,  the   Edelweiss  has  not   disbursed
the funds for the construction. 
9. That   in   June   2019,   I   managed   to   get
100% share back after the Hon'ble NCLT
decided   the   matter   in   CP   No
10. That before I could arrange more funds,
an application in case title Balram Singh
Vs. Soni Infratech Private Limited vide its
order dated 22.11.2019 for the CIRP got
11. That suspended Director has preferred
an   Appeal   before   Hon'ble   NCLAT   and
Hon'ble   NCLAT   vide   it   order   dated
19.12.2019 were pleased to grant stay on
12. That as per the direction of the Hon'ble
NCLAT,   i   have   filed   the   settlement
terms/Resolution   Plan   with   all   details
pertaining   how   this   project   will   be
managed   to   be   completed   with   funds
planning and repayment to all Creditors.
13. That I say that I will complete the stage
wise construction within 6 months to 15
months (+/­ 3 Months) in phased manner
from the date of Order.
Particulars  Tower Time   in
Months   (+/­
3 Months)
Stage­I T8­T12 Within   6­9
Stage­II T1­T4 Within 12 
Stage­III T5­T7 Within 15 
14. That I say, I had committed in open
court   and   accordingly   arranged   Rs   10
Crore   to   start   the   project   immediately
without any delay and I will ensure this
will be started within 15­30 days. 
15. That   I   have   already   agreed   in   my
Resolution plan that the Cost of the Flat
will not be escalated and agreed to honor
the   BBA   signed   by   the   previous
16. That as per the data before the LD IRP
only   9   home   buyers   out   of   452   Home
Buyers   wanted   the   refund   and   in   my
Resolution Plan I have agreed to refund
the   amount   after   completion   of   the
project of Phase­1.
17. That I have stated all relevant data and
computation in details in my Resolution
Plan that how the funds will be utilized
and how the construction work can be
completed in time. 
18. That I have stated in my last modified
resolution plan that SBI Cap Vetures Ltd
has   already   shown   interest   for   further
Loan of 100 Crore to me. 
19. That   as   per   the   direction   of   Hon'ble
NCLAT I have attended the meeting with
the Representative of the Home Buyers
and I have already accepted and agreed
to   Incorporate   the   suggestions   and
objections   of   the   Home   Buyers   to   the
Resolution Plan and the same has been
recorded by the LD IRP in the Minutes of
the Meeting dated 23.10.2021.
20. That I have also given my consent to
make a team of 5 person, 2 from buyer
side and 2 from management side and
will be monitored by Ld IRP
21. That   this   affidavit   to   the   additional
documents   in   the   present   Civil   Appeal
have been read by me and are found true
and correct to my knowledge and belief. 
22. That the Annexures are true copies of
their respective originals.
23. That   the   facts   stated   in   the   above
affidavit   are   true   and   correct   to   my
personal knowledge and belief.
24. That No part of the same is false and
nothing   material   have   been   concealed
there from.
I, the above named deponent do hereby
verify that the facts stated in the above
affidavit are true to my knowledge and
belief which I believe to be true.  No part
of the same is false and nothing material
has been concealed there from.
Verified at New Delhi, on this 27th day of
December, 2021.
20. The Promoter, Shri Kashi Nath Shukla has also filed an
undertaking, thereby undertaking to return the money with
interest at the rate of 6% per annum of seven applicants in I.A.
No.11358 of 2022 (for impleadment) in the present appeal, who
were   objecting   to   the   Settlement   Plan   submitted   by   the
appellant. The same is taken on record and marked ‘X’ for
21. Taking into consideration the facts and circumstances of
the present case, we find that it will be in the interest of the
home­buyers if the appellant/promoter is permitted to complete
the housing project. The salient features of the undertaking
given on affidavit are as under:
(a)That  the  project  will  be completed  stage­wise  within  a
period of 6 months to 15 months (+/­ 3 months) in a
phased manner;
(b)That the promoter has arranged an amount of Rs. 10
crores to start the project immediately without any delay
and that he will ensure that the project would be started
within 15­30 days;
(c) That the cost of the flat will not be escalated and that the
promoter is agreeable to honour the BBA signed by the
previous management;
(d)That SBI Cap Ventures Ltd. has already shown interest for
further loan of Rs.100 crore;
(e) That the promoter has given his consent to make a team
of 5 persons, 2 from home­buyer’s side and 2 from the
management   side   and   that   the   entire   process   will   be
monitored by the IRP.  
22. Taking   into   consideration   the   salient   features   of   the
undertaking given on affidavit by the Promoter, Shri Kashi Nath
Shukla and the fact that there are only seven out of the 452
home­buyers, who opposed the Settlement Plan, we find that it
will   rather   be   in   the   interest   of   the   home­buyers   that   the
appellant/promoter   is   permitted   to   complete   the   project   as
undertaken by him.  It is pertinent to note that he has agreed
that the cost of the flat will not be escalated.  He has also given
the time line within which the project would be completed.  Not
only this, but he has also undertaken to refund the amount
paid by the seven objectors, if they so desire.  He has further
agreed that there shall be a team of 5 persons, 2 from the
home­buyer’s side and 2 from the management side and that
the entire process shall be monitored by the IRP.
23. We find that there is every possibility that if the CIRP is
permitted,   the   cost   that   the   home­buyers   will   have   to   pay,
would be much higher, inasmuch as the offer made by the
resolution applicants could be after taking into consideration
the price of escalation, etc.  As against this, the Promoter has
filed a specific undertaking specifying therein that the cost of
the flat would not be escalated and that he would honour the
BBA signed by the previous management.  
24. In that view of the matter, we are inclined to allow the
present appeal.  Accordingly, we pass the following order:
A. The appeal is allowed. The impugned order dated 22nd
November, 2021 passed by the National Company Law
Appellate   Tribunal,   Principal   Bench,   New   Delhi   in   I.A.
No.1115 of 2020 in Company Appeal (AT) (Insolvency) No.
1507 of 2019 is quashed and set aside; 
B. The   affidavit   dated   27th  December,   2021   filed   by   Shri
Kashi Nath Shukla, the promoter of the respondent No.1 –
Corporate Debtor is taken on record and treated to be an
undertaking given to this Court; 
C. The   appellant/promoter   is   permitted   to   complete   the
project as per the  deliberations that took  place in  the
Minutes of the Meeting dated 23rd  October, 2021 and in
accordance with the affidavit­cum­undertaking dated 27th
December, 2021 of the Promoter, Shri Kashi Nath Shukla;
D. The modification application being I.A. No.1115 of 2020 in
Company Appeal (AT) (Insolvency) No. 1507 of 2019 before
the NCLAT accordingly stands allowed. 
E. From the date of this order, the IRP shall submit quarterly
reports to the National Company Law Appellate Tribunal,
Principal Bench, New Delhi with regard to the progress of
the housing project;
F. The matter be listed before the National Company Law
Appellate Tribunal, Principal Bench, New Delhi for such
first Status Report on 22nd August, 2022. 
25. Application for impleadment is allowed.   Application for
clarification/directions   filed   on   behalf   of   the   IRP   does   not
survive and is accordingly dismissed.  Application for vacation
of   stay/modification   of   order   dated   4th  January,   2022   is
rejected.  Pending application(s), if any, shall stand disposed of.
There shall be no order as to costs. 
APRIL 27, 2022.


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