Case Note & Summary
This is an appeal before the National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, filed by Vinod Kumar Jha, a director (with powers suspended) of Ajnara Realtech Ltd., against an order dated 15.04.2024 passed by the National Company Law Tribunal (NCLT), New Delhi Bench, Court-IV. The impugned order admitted a Section 7 application under the Insolvency and Bankruptcy Code, 2016 (IBC) filed by homebuyers (Sachin Dhiman and another) against the corporate debtor, Ajnara Realtech Ltd. The appellant contended that the RERA (Real Estate Regulatory Authority) had already passed an order on 30.06.2023 under Section 8 of the RERA Act, 2016, issuing directions for the construction of the project and constituting a Monitoring Committee chaired by a Member of RERA to monitor the project monthly. The appellant argued that the NCLT, in its earlier order dated 05.07.2023, had noted the RERA order and stated that its letter and spirit would be considered at the time of the final order on the Section 7 application. However, the impugned order did not refer to the RERA order at all. The respondent homebuyers, represented by Mr. M.L. Lahoty, submitted that the RERA order was conditional, requiring deposit of amounts by the promoters, and there was no material to show compliance. The NCLAT, after hearing both sides, issued notice to the respondents, noting that the submissions raised by the appellant required consideration. The NCLAT directed that replies be filed within three weeks and rejoinders within two weeks, and listed the appeal for 10th July, 2024. In the meantime, the NCLAT ordered that no further steps shall be taken in pursuance of the impugned order, effectively staying the Corporate Insolvency Resolution Process (CIRP) against the corporate debtor.
Headnote
A) Insolvency and Bankruptcy Code - Section 7 Application - Admission - Consideration of RERA Order - The Adjudicating Authority admitted a Section 7 application filed by homebuyers without referring to or considering an earlier RERA order dated 30.06.2023 passed under Section 8 of the RERA Act, which had constituted a Monitoring Committee for the project. The NCLAT held that the submissions raised by the appellant need consideration and issued notice, staying further steps in pursuance of the impugned order. (Paras 1-9) B) Real Estate (Regulation and Development) Act, 2016 - Section 8 - RERA Order - Monitoring Committee - The RERA had passed an order on 30.06.2023 under Section 8 of the RERA Act, issuing directions for carrying out construction of the project and constituting a Monitoring Committee chaired by a Member of RERA to monitor the project on a monthly basis. The Adjudicating Authority had earlier noted this order on 05.07.2023 and stated that its letter and spirit would be looked into at the time of final order on the Section 7 application, but failed to do so in the impugned order. (Paras 2-4)
Issue of Consideration
Whether the Adjudicating Authority (NCLT) erred in admitting a Section 7 application under the Insolvency and Bankruptcy Code, 2016 without considering the order passed by RERA under Section 8 of the RERA Act, 2016, which had constituted a Monitoring Committee for the project.
Final Decision
NCLAT issued notice to the respondents, directed filing of replies and rejoinders, listed the appeal for 10th July, 2024, and ordered that in the meantime, no further steps shall be taken in pursuance of the impugned order.
Law Points
- Insolvency and Bankruptcy Code
- 2016
- Section 7
- Real Estate (Regulation and Development) Act
- Section 8
- Corporate Insolvency Resolution Process
- Homebuyers
- RERA order
- Stay of proceedings
