Edelweiss Asset Reconstruction Company Limited Vs Sachet Infrastructure Pvt. Ltd. (National Anti-Profiteering Authority)
In these appeals as common order dated 7th March, 2019 passed by the Adjudicating Authority (National Company Law Tribunal), Special Bench, New Delhi, is under challenge and common question of law is involved, they were heard together and are disposed of by this common judgment.
2. Against the ‘Principal Borrower’- ‘Adel Landmarks Limited’ (formerly known as ‘Era Landmarks Limited’), a petition for initiation of ‘Corporate Insolvency Resolution Process’ was admitted by the Adjudicating Authority by order dated 5th December, 2018 in C.P. No. 1083(PB)/2018.
3. During the pendency of the ‘Corporate Insolvency Resolution Process’ against the ‘Principal Borrower’- ‘Adel Landmarks Limited’, the Appellant- ‘Edelweiss Asset Reconstruction Company Limited’, in whose favour ‘Corporate Guarantee’ were given by other ‘Corporate Guarantors’ for securing the loan disbursed to the ‘Adel Landmarks Limited’ (‘Principal Borrower’), filed separate applications under Section 7 of the Insolvency and Bankruptcy Code, 2016 (“I&B Code” for short) for initiation of the ‘Corporate Insolvency Resolution Process’, as detailed below:
| Sr. No. | Corporate Debtors | Appeal No. |
|---|---|---|
| 1. | Sachet Infrastructure Pvt. Ltd. | Company Appeal (AT) (Insol.) No. 377 of 2019 |
| 2. | Superlative Infrastructure Pvt. Ltd. |
Company Appeal (AT) (Insol.) No. 378 of 2019 |
| 3. | Magad Realtors Pvt. Ltd. | Company Appeal (AT) (Insol.) No. 379 of 2019 |
| 4. | Mehak Realtech Pvt. Ltd. | Company Appeal (AT) (Insol.) No. 380 of 2019 |
| 5. | Sameeksha Estate Pvt. Ltd. | Company Appeal (AT) (Insol.) No. 381 of 2019 |
| 6. | Manogayan Estates Pvt. Ltd. | Company Appeal (AT) (Insol.) No. 382 of 2019 |
| 7. | Bhisham Infrastructure Pvt. Ltd. | Company Appeal (AT) (Insol.) No. 383 of 2019 |
| 8. | Neeleshwar Mines & Minerals (India) Pvt. Ltd. |
Company Appeal (AT) (Insol.) No. 384 of 2019 |
| 9. | Jamvant Estates Pvt. Ltd. | Company Appeal (AT) (Insol.) No. 385 of 2019 |
4. As common questions of law and facts involving pertain to the ‘Corporate Guarantor’ for securing the loan disbursed to ‘Adel Landmarks Limited’- (‘Principal Borrower’) being common, the Adjudicating Authority mainly dealing with the case of ‘Manogayan Estates Pvt. Ltd.’ held that the Appellant- ‘Edelweiss Asset Reconstruction Company Limited’ being holder of the Corporate Guarantee from the aforesaid ‘Corporate Debtors’ and the ‘Corporate Insolvency Resolution Process’ having triggered against the ‘Principal Borrower’- (‘Adel Landmarks Limited’), for same set of claim against other ‘Corporate Debtors’ (‘Corporate Guarantors’) are not maintainable in view of the decision of this Appellate Tribunal in “Dr. Vishnu Kumar Agarwal v. M/s. Piramal Enterprises Ltd.─ Company Appeal (AT) (Insolvency) No. 346 of 2018 etc.” decided on 8th January, 2019, wherein this Appellate Tribunal held:
“ …………….. However, once for same set of claim application under Section 7 filed by the ‘Financial Creditor’ is admitted against one of the ‘Corporate Debtor’ (‘Principal Borrower’ or ‘Corporate Guarantor(s)’), second application by the same ‘Financial Creditor’ for same set of claim and default cannot be admitted against the other ‘Corporate Debtor’ (the ‘Corporate Guarantor(s)’ or the ‘Principal Borrower’)……………. ”
5. The Appellant has been given liberty to file its claim before the ‘Interim Resolution Professional’ of ‘Adel Landmarks Limited’- (‘Principal Borrower’) in IB- 1083(PB)/2018 as the same amount cannot be claimed in separate petitions. All the applications under Section 7 preferred by the Appellant against the aforesaid nine ‘Corporate Debtors’ have been dismissed by the common impugned order.
6. Learned counsel appearing on behalf of the Appellant- ‘Edelweiss Asset Reconstruction Company Limited’ submitted that the case of the Appellant is not at par with the case of ‘M/s. Piramal Enterprise Limited’ (Supra) as referred to by the Adjudicating Authority.
7. According to learned counsel for the Appellant, the ‘Corporate Insolvency Resolution Process’ cannot proceed only against one of the ‘Corporate Debtor’, namely— ‘Adel Landmarks Limited’- (‘Principal Borrower’) as the said ‘Adel Landmarks Limited’ in consortium with nine ‘Corporate Debtors’ herein decided to develop the area by constructing flats/ shops for allottees.
8. It was submitted that ‘Resolution Process’ will not be complete if the total area comprising of lands belonging to all the ‘Corporate Debtors’ are not developed for the allottees. According to him, lands of all the nine ‘Corporate Debtors’, in question, have been consolidated for the purpose of construction of the housing projects.
9. According to the Appellant, the nine ‘Corporate Debtors’, as referred to above, are the landholders who in concert with ‘Adel Landmarks Limited’ (‘Principal Borrower’) decided to develop the total area by constructing Infrastructure for the allottees. The Agreements were signed between ‘Adel Landmarks Limited’ and nine ‘Corporate Debtors’ aforesaid for such development and for the said reason, ‘Principal Borrower’ had availed term loan of Rs. 170 Crores from ‘ECL Finance Limited’ (original ‘Financial Creditor’) in whose favour nine ‘Corporate Debtors’ had executed guarantee to repay the debt. Copies of the ‘Loan Agreement’ and the ‘Corporate Guarantee Agreement(s)’ dated 7th October, 2013 and the ‘Assignment Agreement’ of ‘ECL Finance Limited’ dated 23rd March, 2017 whereby debt has been assigned in favour of the Appellant- ‘Edelweiss Asset Reconstruction Company Limited’ have been enclosed.
10. On notice the Respondents, including the ‘Resolution Professional’ of ‘Adel Landmarks Limited’ (‘Principal Borrower’) and all the nine ‘Corporate Debtors’ have appeared. Curiously, all of them on appearance supported the stand taken by the Appellant.
11. Learned counsel appearing on behalf of the ‘Resolution Professional of ‘Adel Landmarks Limited’ (‘Principal Borrower’) against which the ‘Corporate Insolvency Resolution Process’ has been initiated, submitted that the ‘Resolution Process’ will not succeed if the whole project is not taken over by the ‘Resolution Professional’ for consolidated ‘Resolution Plan’ as also to keep the project as a going concern.
12. It was submitted that the two projects are based on different sets of lands of which nine ‘Corporate Debtors’ are landholders. Therefore, according to the ‘Resolution Professional’, the landholders may be guarantor, but lands have been consolidated for completion of the projects.
13. Similar plea has been taken by the counsel for all the nine ‘Corporate Debtors’, namely— ‘Sachet Infrastructure Pvt. Ltd.’, ‘Superlative Infrastructure Pvt. Ltd.’, ‘Magad Realtors Pvt. Ltd.’, ‘Mehak Realtech Pvt. Ltd.’, ‘Sameeksha Estate Pvt. Ltd.’, ‘Manogayan Estates Ltd.’, ‘Bhisham Infrastructure Pvt. Ltd.’, ‘Neeleshwar Mines & Minerals (India) Pvt. Ltd.’ and ‘Jamvant Estates Pvt. Ltd.’. They also want that the ‘Corporate Insolvency Resolution Process’ should be initiated against them for completion of all the projects. It was also submitted that the same ‘Resolution Professional’ should take care of all the projects.
14. Learned counsel for the Appellant while submitted that the case of ‘M/s. Piramal Enterprises Limited’ (Supra) is not applicable in the facts and circumstances of the case, he relied on the decision of this Appellate Tribunal in “Mrs. Mamatha v. AMB Infrabuild Pvt. Ltd. & Ors.─ Company Appeal (AT) (Insolvency) No. 155 of 2018” disposed of on 30th November, 2018. In the said case, the Adjudicating Authority rejected the application under Section 7 for initiating the ‘Corporate Insolvency Resolution Process’ jointly against two ‘Corporate Debtors’ on the ground that the application under Section 7 cannot be filed jointly against two ‘Corporate Debtors’. This Appellate Tribunal noticed that ‘M/s. AMB Infrabuild Pvt. Ltd.’ one of the ‘Corporate Debtor’ and another Company, namely— ‘M/s. Earth Galleria Pvt. Ltd.’ entered into ‘Collaboration Agreement’ dated 3rd May, 2013 for development of a land. Taking into consideration the fact that without the collaboration of the land owner and the builder, the Infrastructure Project cannot be developed, this Appellate Tribunal held that the application under Section 7 is maintainable jointly against both the ‘Corporate Debtors’, and disposed of the case with following observations:
“14. If the two ‘Corporate Debtors’ collaborate and form an independent corporate unit entity for developing the land and allotting the premises to its allottee, the application under Section 7 will be maintainable against both of them jointly and not individually against one or other.
15. In such case, both the ‘Developer’ and the ‘Land Owner’, if they are corporate should be jointly treated to be one for the purpose of initiation of ‘Corporate Insolvency Resolution Process’ against them.”
15. The Appellant has enclosed different Agreements and other records from which the following facts emerge.
16. M/s. ‘Era Landmarks (India) Limited’ now known as ‘Adel Landmarks Limited’ reached different ‘Collaboration Development Agreements’ with the following ‘Corporate Debtors’, as detailed below:
