The court emphasized that reverse CIRP cannot be used to evade liabilities, and the interests of homebuyers must be prioritized in insolvency proceedings.

JUDGMENT :

Prashant Kumar, J.

TABLE OF CONTENTS

1. Heard Sri Anil Tiwari, learned Senior Counsel assisted by Sri Shikhar Kaushal and Sri Anuj Chauhan, learned counsel for the petitioner, Sri M.C. Chaturvedi, learned Additional Advocate General assisted by Sri Devesh Vikram, learned Additional Chief Standing Counsel and Sri Mohan Srivastava, learned Standing Counsel for the State-respondent no.1 and Sri Manish Goyal, learned Senior Counsel assisted by Sri Kaushalendra Nath Singh and Ms. Anjali Gokhlani, learned counsel for respondent no.2.

FACTS OF THE CASE

2. New Okhla Industrial Development Authority, [NOIDA] sometime in the year 2011 floated a scheme known as “Sports City-II” which was to be developed in Sectors 78, 79 and 150 of NOIDA. The scheme was launched on 03.03.2011 and closed on 24.03.2011. As per the scheme, a Sports City was to be developed on a land parcel of 72.75 hec. in Sector 78, 79 and another 80 hec. in Sector 150 of NOIDA. The reserve price for the scheme was set at Rs.11,500/- per square metre. The price was purposely kept low as the developer was supposed to create sports facilities over 70% of the entire land allotted to them, which was not marketable, and on top of it, the developer had to spend his funds to develop the same. In the remaining 30% of the land, 28% was meant for Group Housing and 2% for commercial purpose. The scheme clearly stated that the population density in this Sports City would be 1650 per hectare. In this scheme, maximum permissible Floor Area Ratio[FAR] of the total land was 1.5. The open/green area of the recreational component (i.e. sports activities such as Golf course, stadium etc. and open spaces) was to be considered as open green areas for the entire land.

3. In response to aforesaid scheme, only two companies applied for the allotment of Sports City, first being M/s Wave Pvt. Ltd., which had applied at the reserved price and the second was a consortium of companies led by M/s Xanadu Estates Pvt. Ltd. (Lead Member) along with 8 other companies being the Relevant Members. The bid of the consortium of M/s Xanadu Estates Pvt. Ltd. was found to be the most compliant for the development of the sports city, and hence, the project was allotted to them. The NOIDA Authority issued an Acceptance Letter on 28.03.2011 and informed the Lead Member about the allotment. Thereafter, Noida Authority issued an Allotment-cum-Reservation Letter dated 04.05.2011 and called upon the Consortium to deposit the allotment money of Rs.35,76,01,125/- within 60 days, failing which action as per terms and conditions of the brochure shall be taken. In the allotment letter, it was informed to the Consortium that total land parcel admeasuring 7,27,500 sqm. in Plot No.SC- 01-01, Sector 78 & 79, NOIDA was reserved in favour of the Consortium as per the terms and conditions mentioned in the brochure of the Scheme.

4. Vide letter dated 11.10.2011, the Consortium requested the authorities to make sub division of the allotted plot in favour of