IBC Laws - Real Estate Appellate Tribunal (REAT) can continue proceedings during CIRP and pass order against Corporate Debtor during moratorium | It is incumbent upon IRP to find out and follow all pending proceedings against Corporate Debtor | Claim filed after order of RERA cannot be said to be a belated claim barred by limitation - Mysore Petro Chemicals Ltd. Vs. Mrs. Vandana Garg, The RP of Raghuleela Builders Pvt. Ltd.

Real Estate Appellate Tribunal (REAT) can continue proceedings during CIRP and pass order against Corporate Debtor during moratorium | It is incumbent upon IRP to find out and follow all pending proceedings against Corporate Debtor | Claim filed after order of RERA cannot be said to be a belated claim barred by limitation – Mysore Petro Chemicals Ltd. Vs. Mrs. Vandana Garg, The RP of Raghuleela Builders Pvt. Ltd. – NCLT Mumbai Bench

December 29, 2023

Hon’ble NCLT Mumbai Bench held that: (i) The claim of the Applicant cannot be said to be a belated claim barred by the limitation as the Applicant filed the appeal before the MahaRERA much prior to the initiation of CIRP proceedings. (ii) The Corporate Debtor (or the IRP) were on the one hand duty bound to appear before MahaRERA or/otherwise is bound by the judgment rendered by Hon’ble MahaRERA. (iii) It was incumbent upon the IRP to find out and follow all the pending proceedings against the Corporate Debtor. (iv) In view of the settled proposition of law that the purpose of moratorium is to secure the assets of the Corporate Debtor and the term “proceedings” not preceded by word “all” makes it abundantly clear that Section 14(1)(a) would not apply blindly without appreciating the facts to “all” the proceedings. (v) In addition, the directions of the Hon’ble Apex Court in Pioneer Urban Land and Infrastructure Ltd. & Anr. v. UoI & Ors. (2019) ibclaw.in 13 SC holding that the RERA Act has to be read harmoniously with IBC also deserve to be appreciated and taken notice of.

(2023) ibclaw.in 1064 NCLT

IN THE NATIONAL COMPANY LAW TRIBUNAL
Mumbai Bench

Mysore Petro Chemicals Ltd.
v.
Mrs. Vandana Garg, RP

I.A. 2725/2022 in C.P. (IB)-498(MB)/2021
Decided on 18-Dec-23

Coram: Ms. Reeta Kohli (Judicial Member) and Shri Sanjiv Dutt (Technical Member)

Add. Info:

Corporate Debtor: Raghuleela Builders Pvt. Ltd.

For Appellant(s): Adv. Roshan Gaud

For Respondent(s): Adv. Rajeev K. Panday

Brief about the decision:

Facts of the case

The Applicant purchased an office unit in the Corporate Debtor’s project “ONE BKC” situated at Bandra, Mumbai and executed the agreement dated 02.07.2015. The Applicant paid the entire consideration amount of Rs. 12,93,60,000/-. As per the agreement, the Corporate Debtor was required to hand over the possession of the said office unit on or before 30.09.2015.
In view of the non-delivery of the unit, the Applicant filed a complaint before Real Estate Regulatory Authority (RERA) and vide Order dated 08.10.2020, RERA disposed of the case by not allowing compensation to the Applicant.
An appeal was preferred against the Order dated 08.10.2020 to the Maharashtra Real Estate Appellate Tribunal, Mumbai (MahaRERA).
The copy of the appeal was served upon the Corporate Debtor on its last known address on 17.12.2020 and affidavit of service was filed by it before MahaRERA. As per the case of the Applicant, the appeal was listed on 17.03.2021 but none appeared on behalf of the Corporate Debtor.
During the pendency of the appeal before the MahaRERA, the Corporate Debtor was admitted to CIRP on 04.10.2021.
The Hon’ble MahaRERA vide Order dated 30.06.2022 granted the relief to the Appellant and the Corporate Debtor was directed to pay interest at the rate of State Bank of India’s highest Marginal Cost Lending Rate plus 2% on the amount paid by the Applicant from 01.10.2015 upto 30.11.2019.
On receipt of the Order dated 30.06.2022, Applicant informed the Resolution Professional (RP) and ultimately filed his claim in Form-B on 19.07.2022.

Contentions of the parties

The Applicant has submitted that the IRP was duty bound to disclose all legal proceedings pending against the Corporate Debtor under the Information Memorandum as per Regulation 36(2)(h) of IBBI (Insolvency of Corporate Persons) Regulations, 2016.
The case of the Respondent/RP is that, firstly, the Order dated 30.06.2022 by MahaRERA having been passed after the moratorium having been imposed under Section 14 of Insolvency and Bankruptcy Code, 2016 is bad in law. Secondly, the claim of the Applicant is a delayed claim.

Decision of the Adjudicating Authority

The claim of the Applicant cannot be said to be a belated claim barred by the limitation as the Applicant filed the appeal before the MahaRERA much prior to the initiation of CIRP proceedings. The service of the appeal was effected upon the Corporate Debtor. Thus, the Corporate Debtor (or the IRP) were on the one hand duty bound to appear before MahaRERA or/otherwise is bound by the judgment rendered by Hon’ble MahaRERA.
It was incumbent upon the IRP to find out and follow all the pending proceedings against the Corporate Debtor.
In view of the settled proposition of law that the purpose of moratorium is to secure the assets of the Corporate Debtor and in view of the judgment rendered by Hon’ble Delhi High Court in Power Grid Corporation of India Ltd Vs. Jyoti Structure Ltd. (2017) ibclaw.in 12 HC holding that the term “proceedings” not preceded by word “all” makes it abundantly clear that Section 14(1)(a) would not apply blindly without appreciating the facts to “all” the proceedings.
In addition, the directions of the Hon’ble Apex Court in Pioneer Urban Land and Infrastructure Ltd. & Anr. v. Union of India & Ors. (2019) ibclaw.in 13 SC holding that the RERA Act has to be read harmoniously with IBC also deserve to be appreciated and taken notice of. The reference placed by the RP on the judgment of Hon’ble NCLAT in Deputy Commissioner Division-VII, Central GST Vs. Mr. Kiran Shah (2021) ibclaw.in 433 NCLAT is misplaced and hence not relevant to the facts and circumstances of the present case.
Thus, in view of above position, we deem it appropriate to allow the present I.A. and direct the RP to consider the claim of the Applicant.(p11-12)