The Tribunal held that applicants who withdrew from a real estate project and obtained Recovery Certificates cannot pursue corporate insolvency under IBC, thus failing to meet the mandatory allottees requirement.

ORDER

PER- RAHUL BHATNAGAR, MEMBER (TECHNICAL) Order Pronounced on: 11.03.2024

1. This application has been filed under Section 60 (5) read with Section 65 (1) of the Insolvency and Bankruptcy Code , 2016 read with Rule 11 of the National Company Law Tribunal Rules, 2016 seeking dismissal of the captioned Petition CP (IB) 888/PB/2022.

2. The applicant in the present application has prayed for the following reliefs: -

a) Delete Applicants 5, 85, 90 and 100 from the Memo of Parties for not being a part of the class of “allottees under a real estate project” since they had already withdrawn from the Project by approaching UPRERA for cancellation of their allotments, and which relief was duly granted by UPRERA; and being guilty of concealment and suppression;

b) Delete Applicants 27, 37, 78, 81, 86 and 89 from the Memo of Parties for being guilty of forum shopping by initiating multiple remedies simultaneously and being guilty of concealment and suppression;

c) Consequently, dismiss the captioned Petition under Section 7 IBC, i.e., CP(IB) No. 888 of 2022 for not meeting the mandatory requirement of the minimum number of allottees under the second proviso to Section 7 (1) IBC;

d) Impose costs upon the Applicants in terms of Section 65 IBC for fraudulently and maliciously instituting the present proceedings; and e) Pass such order(s) that this Hon’ble Tribunal may deem fit and necessary in the interest of justice.

3. Briefly stated the facts of the case as mentioned in the instant application, which are necessary for adjudication, are as follows:

i. The main Company Petition has been filed by the homebuyers/ financial creditors, being allottees of the ‘Rudra Palace Heights’ Project (the “Project”) under Section 7 of the Insolvency and Bankruptcy Code , 2016 [“IBC”] inter alia seeking initiation of corporate insolvency resolution process against the Corporate Debtor/ Applicant herein.

ii. The present application is filed for dismissal of the main Company Petition on the following grounds: -

a. The Financial Creditors are guilty of concealment and suppression;

b. The Financial Creditors are guilty of forum shopping; c. The captioned Petition is an abuse of process of law, as the Financial Creditors have invoked multiple remedies simultaneously;

d. The captioned Petition has been filed maliciously and fraudulently with a view to extort and harass the Corporate Debtor; and e. That the captioned Petition does not meet the mandatory requirement of the second proviso to Section 7 (1) of IBC, 2016.

f. That the Applicants have concealed and suppressed from this Adjudicating Authority that they had already approached other fora, including the National Consumer Disputes Redressal Commission (NCDRC) and the Uttar Pradesh Real Estate Regulatory Authority (UPRERA) and that some of them have already been granted relief by such alternate fora or in some cases, the claim has already been dismissed.

g. That some of the Applicants have falsely and fraudulently claimed to be allottees under the real estate project, as these Applicants have withdrawn from the Project and have already approached the UPRERA and had their allotments cancelled, prior to filing of the captioned Petition, which was filed on 20.10.2022. These Applicants have concealed this material fact from this Adjudicating Authority and have fraudulently and maliciously initiated the instant proceedings, only with the oblique motive of extorting and harassing the Corporate Debtor.

iii. That Section 65 of the IBC states that “If, any person initiates the insolvency r