IMPORTANT POINT
Important Point :
The court upheld the stay of proceedings against subsequent purchasers, finding that they stepped into the shoes of the original party under insolvency proceedings, ensuring compliance with the moratorium under the Insolvency and Bankruptcy Code.

JUDGMENT:

1. Heard Mr. Joshi, learned Advocate for Petitioners; Ms. Sawant, learned Advocate for Respondent No.1 and Mr. Jha, learned Advocate for Respondent No.2 through VC.

2. Present Writ Petition is filed by Defendant Nos.2 and 3 in the Suit proceedings before the Trial Court taking exception to the order dated 02.12.2023. The order dated 02.12.2023 is passed in Application filed below Exhibit “53” in Suit No.4497 of 2010 before the Bombay City Civil Court at Bombay.

3. Suit is filed by Respondent No.1 – Plaintiff before the Trial Court. Parties shall be referred to as ‘Plaintiff’ and ‘Defendants’ for ease of convenience.

4. The protagonist in the present case is Defendant No.1 namely Lok Housing and Construction Limited before the Trial Court. Plaintiff – Baburay Pundlik Salunke has filed the Civil Suit for seeking specific performance of Agreement dated 25.10.2002 and declaration that the said Agreement is binding on Defendant No.1. Initially when the Suit was filed, it was filed only against Defendant No.1 since Defendant No.1 was the Developer of the property where the flat was purchased by Plaintiff vide Agreement dated 25.10.2002. It is stated in the Suit plaint that Defendant No.1 delayed in giving possession of the subject flat. Agreement dated 25.10.2002 is appended at Exhibit “C” – page No.49 of the Writ Petition. It is seen that stamp duty has been paid by Plaintiff on the said Agreement, but it is not a registered Agreement. On perusal of the Suit plaint, it is seen that substantial payments have been made by Plaintiff to Defendant No.1 which have been duly acknowledged by him by issuing receipts against the said payment.

5. Plaintiff has filed Suit for specific performance of Agreement and declaration that the said Agreement is valid and binding but in the alternative Plaintiff has also prayed for compensation and damages to the tune of Rs.86,98,556/- in the event if specific performance of the Agreement is not allowed by the Court. It is seen that subsequently the project has been completed and pursuant to the same Suit flat has been sold by Defendant No.1 to Defendant Nos.2 and 3.

6. In that view of the matter, Defendant Nos.2 and 3 were impleaded as party Defendants to the Suit before the Trial Court. There is an Agreement, rather a registered Agreement dated 01.12.2007 between Defendant No.1 and Defendant Nos.2 and 3.

7. Being aggrieved with the above, Plaintiff approached the Trial Court in the year 2010 for seeking the aforesaid reliefs. After impleadment of Defendant Nos.2 and 3, Plaintiff has also maintained a challenge to declare the registered Agreement dated 01.12.2007 between Defendant No.1 and Defendant Nos.2 and 3 as null and void and sought its cancellation. This is the structure of the Suit before the Trial Court.

8. In the above background, Defendant No.1 i.e. Lok Housing and Construction Limited and others has filed Application below Exhibit “53” seeking stay of the Suit proceedings. It is submitted by Defendant No.1 that the National Company Law Tribunal, Mumbai (for short “NCLT”) by order dated 03.06.2019 has admitted Defendant No.1 to the Corporate Insolvency Resolution Process (CIRP). Thus, RP has been appointed for the Company. Therefore under Section 14 of the Insolvency and Bankruptcy Code, 2016 (for short “I and B Code”) moratorium is applicable. Hence, Defendant No.1 prayed that the proceedings be kindly stayed until the decision of the NCLT in the pending Suit proceedings before the Tribunal. It is seen that Defendant Nos.2 and 3 represented by Mr. Joshi before me have vehemently objected and opposed the Application before the Trial Court contending that Defendant Nos.2 and 3 have no privity of contract with the Plaintiff. Even before me, Mr. Joshi has contended that Defendant Nos.2 and 3 are bonafide purchasers for value of the Suit flat from Defendant No.1 and have no nexus with the Plaintiff. He would submit that Defendant Nos.2 and 3 are not party before the NCLT, hence he would persuad