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2024 Supreme(Online)(NCLAT) 1033
NATIONAL COMPANY LAW APPELLATE TRIBUNAL
ASHOK BHUSHAN, J
Harpal Singh Chawla – Appellant
Versus
Vivek Khanna & Ors. – Respondent
Interlocutory Application No.7853 of 2024 | Company Appeal (AT) (Insolvency) No. 2002 of 2024
For the Appellants/Petitioners:Mr. Mukul Rohatgi, Sr. Advocate, Mr. Arun Kathpalia, Sr. Advocate, Mr. Sumesh Dhawan, Ms. Vatsala Kak, Mr. Shaurya Shyam, Mr. Raghav Dembla, Ms. Ankita Bajpai, Mr. Devansh Srivastava, Mr. Naman Gupta
For the Respondents:Mr. Abhijeet Sinha, Sr. Advocate, Mr. Guneet Sidhu, Mr. Pushpendra S. Bhadoriya, Mr. Saikat Sarkar, Mr. Rishabh Jain, Mr. Krishnendu Datta, Sr. Advocate, Mr. Chitranshul A. Sinha, Ms. Pallavi, Mr. Shivam Shorewala, Ms. Rakshita Bhargava, Ms. Alina Merin Mathew, Mr. Abhimanyu Bhandari, Sr. Advocate, Mr. Gaurav Mitra, Mr. Abhirup Dasgupta, Mr. Aditya Diwan, Mr. Pratyush Parasanna, Mr. Malak Bhatt
The court ruled that the Corporate Insolvency Resolution Process cannot be limited to a single project, as all financial creditors' claims must be considered.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Section 7 - Corporate Insolvency Resolution Process (CIRP) - The Appellant challenged the NCLT's order admitting Section 7 Application filed by Financial Creditors relating to 'Spaze Arrow' project, seeking to confine CIRP to this project alone. The Appellant contended that several projects have been completed and initiating CIRP for them would jeopardize interests of allottees. (Para 6, 20)
(B) Admission of Claims - Financial Creditors filed claims with the Resolution Professional during CIRP, as they had a right to payment under IBC. The court recognized that the claims presented must be verified and addressed appropriately by the RP before further actions could be taken. (Para 18)
Findings of Court:
The request to restrict CIRP to only Spaze Arrow was denied, emphasizing inclusivity for all financial creditors.
Result: Application rejected.
| Table of Content |
|---|
| 1. application filed seeking to limit cirp to one project only. (Para 1 , 2) |
| 2. court's observations on project completion and creditor claims. (Para 3 , 4 , 5) |
| 3. claims verification process and creditor rights affirmed. (Para 10 , 11 , 14 , 15) |
| 4. cirp restriction denied; all claims to be recognized. (Para 20) |
JUDGMENT
ASHOK BHUSHAN, J.
IA No.7853 of 2024 IA No.7853 of 2024 has been filed by the Applicant/ Appellant praying for following reliefs:
“a) modify the Order dated 28.10.2024 passed by this Hon’ble Adjudicating Authority in the Company Appeal (AT)(lns) No. 2002 of 2024 to the effect that the CIR Process of the Corporate Debtor may be confined to the single Project namely ’Spaze Arrow’ for which the Section 7 Petition was filed before the Ld. Adjudicating Authority and the Committee of Creditors be constituted for the said Project only; and b) such other and further orders be passed as facts and circumstances of the case may require.”
2. Company Appeal (AT) (Ins.) No.2002 of 2024 has been filed by the Suspended Director of the Corporate Debtor - Spaze Towers Pvt. Ltd. challenging order dated 21.10.2024 passed by National Company Law Tribunal, New Delhi Bench, Court-IV admitting Section 7 Application filed by Respondents (Respondent Nos.1 to 26 – Financial Creditor in a class). The Respondents – Financial Creditors in a class being allottee of a Project namely ‘Spaze Arrow’ located at Sector 78, Gurugram filed Application claiming a default on the Corporate Debtor (“CD”) seeking initiation of Corporate Insolvency Resolution Process (“CIRP”) against the CD. The Adjudicating Authority after hearing the parties by order dated 21.10.2024 admitted Application. Aggrieved by the said order, this Appeal was filed by Suspended Director of the CD. In the Appeal, following order was passed on 28.10.2024:
“28.10.2024: Issue Notice.
2. Let Reply be filed within three weeks.
3. Intervenors are permitted to file the Intervention Application before the next date fixed.
List this Appeal on 16th December, 2024.
In the meantime, insolvency in pursuance of the Impugned Order shall go on which will be abide by the result of the Appeal.
Let the CoC be constituted.”
3. The Appellant aggrieved by the order dated 28.102.024 passed by this Tribunal in the present Appeal filed Civil Appeal No.12189 of 2024 – Harpal Singh Chawla vs. Vivek Khanna & Ors., which Civil Appeal has been disposed of by order of the Hon’ble Supreme Court dated 08.11.2024.Order passed by Hon’ble Supreme Court on 08.11.2024 is as follows:
“The grievance raised by the appellant, Harpal Singh Chawla (a suspended Director of Spaze Towers Pvt. Ltd.), is that there are twelve completed projects and the Corporate Insolvency Resolution Process should not be initiated in respect of those projects.
We make no comments in this regard, as the matter is sub-judice before the National Company Law Appellate Tribunal. We leave it open to the appellant, Harpal Singh Chawla, to approach the National Company Law Appellate Tribunal by way of an appropriate application pointing out the relevant facts and consequences for consideration.
We clarify that we have not made any observations on the merits of the case and the contentions raised by the parties. The appeal and pending application(s), if any, shall stand disposed of.”
4. After the above order of the Hon’ble Supreme Court, present IA No.7853 of 2024 has been filed by the Appellant on 08.11.2024 itself, praying for reliefs as noted above. In IA No.7853 of 2024, learned Counsel for the Respondents took time to file reply to the Application, which was allowed on 21.11.2024. Reply has been filed by the Respondent, to which a rejoinder affidavit has also been filed by the Appellant in pursuance of the liberty granted on 28.11.2024. Several Intervention Applications have been filed by the allottees in the present Appeal, which shall be noticed hereinafter.
5. We have heard Shri Mukul Rohatgi, learned Senior Counsel appearing for the Appe
