CIRP initiated under Section 7 by allottees of one real estate project must be confined to that project only, not extending to other projects of the developer, upholding debt/default but protecting distinct stakeholder interests.

JUDGMENT

ASHOK BHUSHAN, J.

This Appeal by Suspended Director of the Corporate Debtor (“CD”) has been filed challenging the order dated 19.11.2024 passed by National Company Law Tribunal, Principal Bench, New Delhi admitting Section 7 petition filed by Respondent Nos.1 to 43 – Financial Creditors in a class and allottees of project ‘Raheja Shilas (Low Rise)’, situated at Sector 109, Gurugram, Haryana being developed by the CD – M/s Raheja Developers Ltd.

2. Brief facts giving rise to the Appeal are:

(i) The CD – M/s Raheja Developers Ltd. lodged residential project namely – ‘Raheja Shilas (Low Rise)’. The CD has also obtained the license from Directorate of Town Country Planning, Haryana (“DTCP”) for developing the residential group housing colony dated 07.11.2007. The Financial Creditors in a class, Applicants (Respondent Nos.1 to 43 herein) showed willingness to take allotment of units. Respondent Nos.1 to 43 were allotted different units and Builder Buyer Agreement was entered. Under the Builder Buyer Agreement, the possession of units were to be received by 2012-13. The Respondents claimed to have made substantial payment as per Builder Buyer Agreement.

(ii) Respondent Nos.1 to 43 filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the “IBC”) being CP(IB) No.239(PB)/2023 in August 2023 alleging default on the part of the CD. Total amount claimed with regard to 43 Applicants were mentioned in Part- IV of the application and different dates of default were mentioned with regard to different Applicants.

(iii) Notice was issued in Section 7 petition by the Adjudicating Authority. The Respondent appeared before the Adjudicating Authority and filed their reply. Applicants have also filed their rejoinder. The Adjudicating Authority framed three issued in Paragraph 5 (i) of the impugned order, which are as follows:

a. Whether the Project ‘Raheja Shilas Low Rise constitutes an independent project or it is a part of Group Housing Colony Project as contended by CD?

b. Whether there is a default on the part of the CD in not handing over the possession of units of impugned project is `attributable to the CD or is hit by the clause of force majeure?

c. Whether the essential ingredients of ‘debt’ and ‘default’ have been established in the facts and circumstances of the case?”

(iv) The Adjudicating Authority after answering issues, came to the conclusion that debt is due and the CD committed default, the possession was to be given in 2012-14 with a grace period of six months, which has not been given. The debt had been acknowledged by various emails and default is continuing. It was also noticed that Occupation Certificate is not being received. The Applicants fulfilled the statutory threshold of 10% of 100 (whichever is less). The Adjudicating Authority by the impugned order admitted Section 7 application and appointed Mr. Manindra Kumar Tiwari as Interim Resolution Professional (“IRP”) (Respondent No.45 herein).

3. This Appeal came for consideration before this Tribunal on 21.11.2024. It was submitted by learned Counsel for the Appellant that Section 7 application relates to only Project “Raheja Shilas( Low Rise)’ situated at Sector-109, Gurugram, Haryana and the Respondents herein themselves prayed to the Adjudicating Authority to commence the insolvency with regard to the Project to which the Applicants were concerned. It was submitted that issue pertaining to Electricity Dues have been now solved and N