V.P. Singh, Member (Technical):-

1. This Appeal was filed against the order of the Adjudicating Authority passed on 22nd November 2019, whereby the petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 was admitted, and Interim Resolution Professional Mr. Bhim Sain Goyal was appointed.

2. The Appellant had filed the Application IA No. 1115 of 2020 for modification of the order dated 26th February 2020.

3. The sequence of events clarifying the development during the Appeal is given in the form of a chart, which is as under:

4. Appellant had filed the Application IA No. 1115 of 2020 for modification of the order dated 26th February 2020.

5. In this IA, Appellant has stated that it had filed the settlement terms/plan detailing the Plan disclosing all materials particulars with regard to completion of the housing project, so if the Appellant is allowed to work upon his detailed proposal, then all the allottees will get the house. Therefore, in such circumstances, Appellant has settled the matter with Respondent No. 2 and has filed a Settlement Terms/Plan in regard to the completion of the Project.

6. It is further added that if the IRP is allowed to go ahead with the constitution of the Committee of Creditors and carry on the CIRP, then the Appellant, despite having settled the matter with respondent No. 2 and having a plan for completion of the Project, will have to hand over the management of the Project. At present, the Applicant/Appellant has completed about 70-75% of the infrastructure project. He has arranged the funds/private financer to complete the Project as per the Appellant's proposed Settlement Term/Plan on 13th February 2020.

7. Given the above, Appellant requested to modify the order dated 26th February 2020 in the light of the order dated 05th March 2020 passed by the Hon'ble Supreme Court in CA No. 1928/2020.

8. Interveners/Non-Applicants had filed objections against the Application for modification of order dated 26th February 2020, registered at Diary No. 21937 dated 14th September 2020. In the said objections, the objector has stated that the Application filed by the Appellant is against the interest of Home Buyers/Financial Creditors and the very object and purpose of the IBC and allowing the present Application tantamount to abuse/misuse of provisions of IBC.

9. The objector contends that the said settlement agreement proposed by the Appellant was not encompassing all the home buyers, and considering the miseries of the home buyers this Appellate Tribunal had passed order dated 26th February 2020 to modify the interim order dated 19th December 2019 to stay the CIRP, thereby directing the IRP to go ahead with the constitution of Committee of Creditors and carry forward with the CIRP of the Corporate Debtor.

10. Thereafter, the Appellant had challenged the said order before the Hon'ble Supreme Court and made a misleading statement that the Tribunal has failed to consider the settlement agreement/plan filed by the Appellant. However, Hon'ble Supreme Court did not intervene with the order passed by this Tribunal. Still, it directed the Appellant to file a modification application given the settlement plan encompassing all the allottees.

11. Given the order of the Hon'ble Supreme Court, the Appellant has filed the modification application. Appellant made the statement before the Hon'ble Supreme Court that the settlement plan on 13th February 2020 covers all the allottees. Before proceeding further, it is necessary to give a snapshot of the settlement plan submitted by the Appellant dated 13th February 2020. The relevant portion of the settlement plan is reproduced as under:

“Phase-I comprising 12 towers (T1-T12) and Phase-II comprising of 4 Towers (T13-T16).

Tower-wise details of sold/unsold units alongwith its area are as under:

Tower No.	Total Area	Sold Area	Balance	Total Unit	No. of Unit Sold	Balance Unit
T 1	92570	92570	0	56	56	0
T 2	90250	90250	0	56	56	0
T 3	110832	110832	0	56	56	0
T 4	110832	110832	0	56	56	0
T 5	129680	121360	8320	54	52	2
T 6	110832	110832	0	56	56	0
T 7	129988	117366	12622	56	52	4
T 8	97084	87326	9758	40	37	3
T 9	29990	24292	5698	10	8	2
T 10	29990	24211	5779	10	8	2
T 11	29990	20622	9368	10	7	3
T 12	29990	24125	5865	10	8	2
Total	992028	934618	57410	470	452	18

Tower-wise cost to be incurred and receivable from sold/unsold area is as under:

Tower No.	No. of Flats	Total Sold Flats	Balance amount receivable from sold Flats	Receivable From Unsold Flats	Total receivable	Construction cost to be incurred
T 1	56	56	8.03	0.00	8.03	2.679
T 2	56	56	9.14	0.00	9.14	2.606
T 3	56	56	11.71	0.00	11.71	3.383
T 4	56	56	11.70	0.00	11.70	3.826
T 5	54	52	16.96	4.58	21.53	4.615
T 6	56	56	10.82	0.00	10.82	3.911
T 7	56	52	12.46	6.94	19.40	4.454
T 8	40	37	15.67	5.37	21.03	2.325
T 9	10	8	6.16	3.13	9.29	1.452
T 10	10	8	4.72	3.18	7.90	1.452
T 11	10	7	6.50	5.15	11.65	1.450
T 12	10	8	4.36	3.23	7.59	1.450
Common Area cost to be incurred						19.1518
Commercial				6.30	6.30	-
EWS				1.05	1.05	-
Total	470	452	118.222	38.926	157.148	52.726

(vi) Proposed Plan

The Project is near to completion and almost 70% of the construction is completed. The management is committed to the buyers and has therefore proposed a resolution plan to complete the Project and seeks support from all the customers.

The key concern of the home buyers of Orion Galaxy are:

(a) Restart of construction work of Project and completion thereof at the earliest;

(b) Payment of dues of DGTCP and others.

To redress concerns of unit buyers, the Company offered the following revival plan:

Management of the Project	The Project will be managed as per the directions of the Hon'ble Tribunal under the supervision of IRP.
Construction of the Project	Existing Contractor has agreed to continue the construction work and have shown faith with the management.
Funding	(i) The Total Cost to complete the Phase-I of the Project 122.28 Crores. (ii) The Project can be run through receivable from sold and unsold area of the Project of Phase-I. The total receivable from the Sold and unsold area of Phase-I is Rs. 157 Crores. (iii) The Promoter will also arrange initial funds to start the construction of the Project. Where ever there is liquidity crunch the Promoter shall arrange funds.
Delivery & Quality commitment	a) No additional charges b) There will be no changes in area c) There will be no changes in specification d) Quality of work shall be maintained as committed. e) Approach road will be provided before completion of the Project. f) EDC/IDC will be charged as per actual demand by DTCP.
Development & Delivery Schedule	Delivery schedule - application of OC a) T8-T12 - 6 months +/- 2 month b) T1-T4 - 12 months +/- 2 month c) T5-T7 - 15 months +/- 2 month Construction of Phase 2 to be started by end of 12 months to raise further fund as the booking of the second phase is not yet done.
Customer payments	Demand will be raised as per the CLP plan as per the existing BBA
Refund in case of cancellation of booking	If there is any refund against cancellation of flat by any home buyer then we shall consider to refund the same after handing over the possession to the home buyers who want to take the possession of the flat in the Project.
Delay Compensation	No claims against the previous delays. Delay compensation shall only be paid if there is delay as per the resolution plan implementation as per the Hon'ble Tribunal direction/order.
Utilization of customer funds	Proposed mechanism The developer shall utilize the funds in the completion of Tower T1-T12 as per the tabular representation above in the following manner: (i) 70% of total collection shall be used for construction till Application of OC. (ii) 30% of total collection shall be used for payment of EMI, Salary and other project related expenses. The proposed mechanism of utilization of funds received from customers is enclosed as Annexure BB
Repayment of New Fund	Payment of interest of fresh loan shall be made from 30% collection.
Repayment of Edelweiss	Repayment of Loan to Edelweiss shall be made from the surplus of T1 -T12 and after commencement of construction of Phase-2.
Customer commitment
Customer commitments	• EDC/IDC shall be payable as per actual demand by DTCP. • Customer shall pay car parking charges when demanded. • Customer shall pay the past overdues within 45 days from the start of the construction. • The customer shall pay all the statutory dues like GST, VAT or any other taxes or levies as imposed by the Government.
Approvals/consent from customers	• Change in plans of T8-T12 and phase 2 if any • Any other permission required by Government authorities or any legal entity for the Project.
Customer cases	• All the cases/complaint of all the types including RERA shall be withdrawn/settled by the home buyers immediately to smoother the movement and active efforts of promoters.

10. It is important to mention that in the settlement plan dated 13th February 2020, there is no mention of the consent of the allottees in respect of the said settlement plan.

11. It is pertinent to mention that after filing the First Settlement Plan dated 13th February 2020, the Appellant filed a revised settlement plan dated 15th March 2021 in compliance with this Tribunal's order dated 25th February 2021. Appellant has stated that:

“That in compliance of the order of Hon'ble Appellate Tribunal dated 25.02.2021; the Appellant is hereby submitting the Revised Resolution Plan clearing the ambiguity as directed by this Hon'ble Bench along with the affidavit by the Promoter.

That the IRP has obtained the clarification on the costing of the projects from the independent Architect and Audit company “Qonquest”. The “Qonquest” has submitted the latest report to the IRP confirming the total costs required in the project tower wise.

That the ECL Finance has given its approval about further financing the Project, based on the personal guarantee of Promoter and accordingly submitted its Provisional approval to IRP.

That Promoter has planned to infuse Rs. 5 Crore to immediately start the Project.

The Promoter is in discussion with the M/s Indsao and few more contractors who has shown faith and willing to complete the balance construction work under the Promoter which will be finalized in few days.

That in order to more clarity on the funds utilization the Promoter has annexed a plan for the proper utilization of funds and its planning to maximize the uses in order to complete the projects in time as per the Resolution plan.

(c) Planning of the Promoter to execute the Project

Since in Phase-I of the Project, where 94% area is sold out and 70% of construction is completed, therefore, the Promoter is planning to complete the Phase-I on priority basis.

Further, the Promoter wants to star Phase-II of the Project where only 12% of area is sold only after completion of Phase-I or when atleast 75% units will be booked. Since there are only 22 units booked and allotted in Phase-II and the Company has collected only initial booking amount of Rs. 3.67 crores, therefore, the Promoters is planning to either request the customers of Phase-II to wait to restart of the construction or may refund the amount by selling those units to other buyers.

(iv) Cost to Complete the Phase-I and Proposed

Planning of Funds

As per the estimation of the Promoter, balance cost of construction of Phase-I is approx 52.73 crores. However, as per the report of independent Architect and Audit Company “Qonquest” submitted by the IRP, the balance cost of construction of Phase-I is approx Rs. 71.21 crores and on the conservative basis, even if we consider the balance cost of construction is Rs. 71.21 crores, the total balance cost to complete the Phase-I of the Project will be Rs. 122.28 crores as per the following details:

(B) Proposal/Planning of Promoter to complete Phase-I of the Project

The Promoter wants to deliver the units in T1-T12 of Phase-I of the Project in three stages in time bound manner.

Particulars	Tower	Time
Stage-I	T8-T12	Within 6-9 months
Stage-II	T1-T4	Within 12-15 months
Stage-III	T5-T7	Within 15-18 months

To complete the construction and completion of Phase-I of the Project, it is required some initial infusion of funds to mobilize and restart the construction in full swings, so that the confidence of home buyers can be restored in the Project and on the existing promoters. In order to regain the confidence of home buyers, the promoters are ready to infuse 20 crores in the Project in the following manner:

i. Infusion of further 15 crores by taking interim finance from Edelweiss on the basis of personal guarantee of the existing Promoter. The Edelweiss has issued the Loan approval of Rs. 15 Crore to the Ld IRP, the copy of the Approval Letter of the loan is marked and annexed as Annexure-D.

ii. Infusion of Rs. 5 crores to mobilize and restart the construction. The Promoter has given the letter to IRP stating of infusion of Rs. 5 crores which is annexed as Annexure-E.”

12. It is further necessary to mention that the IRP has submitted the status report on aspects of the revised Plan dated 26th March 2021 (Diary No. 26426). IRP has stated that:

“1. CONSTRUCTION STATUS

The Project is approximately 70% complete, but the work is about 80% complete in Tower-8, and this tower has maximum unsold inventory. Tower 9-12 has just 10 flats in each tower. The Plan submitted by the Applicant to take Tower 8-12 in stage-1 is logical, and this stage can be completed within 6-9 Months. Some Plumbing and Electrical work is done in Tower 1-13, and the remaining Plumbing and Electrical work can be carried out in all the remaining towers, side by side, while completing construction of Tower 8-12.

According to discussions with the technical consultants, architects and contractor, the Project of Phase-1 (Tower 1-12) can be completed within the total period of 18 Months, provided the funds flow is continued. This period is extendable by 3 Months for making Application for ‘occupancy certificate’ and obtaining approvals before delivery of flats.

3. Funds Flow

The Applicant has considered 100% inflow of funds at the completion of every stage of construction, which is practically not possible. After analysing that 86 Homebuyers (19%) in Phase-I have not yet submitted their claims, I have observed that the corporate debtor will not get more than 90% of balance dues from Homebuyers, and in case of unsold flats, the corporate debtor will not get more than 60% after sale of flats, until the Project is completely delivered. Keeping in view the above assumptions, I have changed the inflow and usage of funds, as per Annexure-II.

In my report dated 22.02.2021, I have reported that the balance dues receivable by the corporate debtor are Rs. 120.38 crore. The Balance dues are overstated by Rs. 2.48 crore on account of IFMS increased from Rs. 50 per SQFT in the BBA, to Rs. 75 per SQFT, due to increase in maintenance liabilities of corporate debtor increased from 2 years earlier to 5 years now, by change in Govt. policy. IFMS dues are in the nature of security from the allottees, and cannot be used for construction activities thus reducing the available funds for construction by another Rs. 4.8 crore.

Further the Applicant verbally informed me that he has commitments of giving special rebate of an aggregate value of Rs. 1.25 crore approximately, to some homebuyers who paid their instalments in advance when construction activities were going on.

In view of the above, the balance dues receivables from the Homebuyers are Rs. 111.85 crore. I further submit that many homebuyers/their lawyers visited my office/checked over phone, and I made their information of ‘payment made’ and ‘the balance dues’ available to them.

4. HOMEBUYERS CONCERNS:—

The homebuyers opposing the ‘Proposed Settlement Plan’ have expressed their concerns relating to the Plan (Annexure-III), as below:—

1. The Applicant is not a trustworthy person, and he can run away after selling the ‘Unsold Flats’.

2. The Applicant cannot be trusted with the quality of construction and timely delivery, and hence he should be a ‘Financial Investor’ only to complete the Project. If there is any problem in ‘Funds Inflow’, the Applicant should give an affidavit that he will bring additional funds.

3. The Plan talks about the ‘Approach Road’ but it does not say that the land will be bought to build the approach road, which the Applicant promised to the Homebuyers.

4. The Plan is not clear about the payment of EDC/DC charges. Whether Homebuyers will pay as per BBA or as per demand by DTCEP

5. On page 23, under the head ‘Utilization of Customer Funds’, 30% of total collection shall be used to pay EMI etc, what EMI means in this Plan.

6. On page 24, under the head ‘Approvals, consent from customers’, it is mentioned that ‘change in plans of T8-T12 and Phase-2, if any. The construction of ‘Tower 8-12 is scheduled to commence immediately, and the customers are not concerned with Phase-2, than what is the purpose of this condition.

7. On page 24, under the head ‘Customer Cases’, there is a condition to withdraw all cases/complaints shall be withdrawn/settled by the Homebuyers immediately. This condition is unfair until the flats are delivered to the homebuyers.

8. The Homebuyers has shown concern on the ‘Balance Dues receivable’ by the corporate debtor. I have addressed their concern by sharing their information with them/their lawyers.

9. The Homebuyers has a major concern that the approval of Proposed Settlement Plan’ will result into ‘No action against the Applicant for preferential/undervalued transactions. The funds required to complete the Project should be inducted as ‘Reverse of preferential/undervalued transactions’.

5. CONTRACTOR'S CONCERNS:—

Indsao Infratech informed that he had discussions with the Applicant and is ready to restart construction immediately. He further requested that as an ‘Operational Creditor’, he has submitted a claim of Rs. 2.33 Crore and requested that he shall be paid Rs. 12.50 Lakh per month from his claim amount (Annexure-IV), which he will reinvest in the completion of Tower 1-Tower 12.

6. ECL FINANCE LIMITED

Mr. Chirayush Agarwal, an officer of Edelweiss (Secured Creditor) visited my office and informed me that his Company supports the ‘Revised Settlement Plan’.”

13. It is pertinent to mention that the existing Promoter was originally landowners of the land on which the Project “Orion Galaxy” is situated and had entered into the development agreement with erstwhile promoters of the Company to develop the project “Orion Galaxy”. However, due to various reasons, the Project could not be completed by the erstwhile promoters on time, and as a result, the existing Promoter took control of the Project in 2017 and finally got complete control of the Company after 31.10.2019 when the existing Promoter purchased 100% shares of the Company after the order of NCLT, New Delhi in the matter of petition bearing CP No. 175/241/242/(ND)/2018.

14. The Company has mainly launched Phase-I of the Project, in which 470 units, out of 542 units, have been sold out. In Phase-II, the Company has booked only 79 units, out of which 57 units have been booked and allotted to related parties, and only 22 units are sold to end-users/customers.

15. The existing Promoter/Suspended Directors of the Company justifying the purported settlement plan submits that “the Company requests to all the Stakeholders of the Company and the Project, to approve the aforesaid revival plan and allow the Management/Promoter to restart the construction. There are the following major reasons to approve the Revival Plan in the best interest of the Project and the Company:

a) The existing management is fully aware of the Project; in case there is a change in the management, the new management will take time to understand the various aspects of the Project.

b) The CIRP process will only delay and proposed revival plan. However, the existing management will complete the Project within 15 months.

c) The CIRP process will additionally burden the Project with additional costs.

d) There is no clarity on who will bid for the Project and what will be offered.

e) The management has agreed to hand over the Project in a time-bound manner and without any additional cost burden to the Buyer.

f) The existing management will provide an approach road before completion of the Project.

g) The Promoters has agreed to provide Personal and Corporate Guarantee for taking finance for the Project and made the provision and back up to start immediately without wasting any time.”

16. It is important to mention that no settlement plan encompassing all the allottees has been filed to date. The allottees of different groups have filed IA 183 of 2020, 184 of 2020 dated 10th January 2020, IA 205 of 2020 dated 13th January 2020, IA 330 of 2020 dated 22nd January 2020, IA 366 of 2020 dated 31st January 2020, IA 560 of 2020 dated 03rd February 2020, IA 738 of 2020 dated 13th February 2020, IA 739 of 2020 dated 13th February 2020 and 756 of 2020 dated 14th February 2020 for Impleadment. Only some of them favour the purported settlement plan, and others oppose the scheme. However, it is undisputed to date there is no consensus among the allottees for the said settlement plan.

17. In its latest status report, Interim Resolution Professional submitted that some homebuyers want that reverse CIRP as a better option because the Promoter offered to deliver flats at Builder Buyer Agreement prices. The Promoter is ready with money for immediate construction activities, and the Promoter has agreed to buy land for road connectivity after completion of construction. It is also reported that some homebuyers want that Project to be completed through the CIRP process, as they cannot trust the Promoter under any circumstances.

18. It is important to mention that by our order dated 26th February 2020, we have directed the Interim Resolution Professional to go ahead with the constitution of the Committee of Creditors and carry forward the Corporate Resolution Process. This order was challenged before the Hon'ble Supreme Court in Civil No. 1928 of 2020 but was not entertained. However, Hon'ble Supreme Court directed the Appellant to approach this Tribunal and file the Application for modification of the order dated 26th February 2020 based on the settlement plan filed on 13th February 2020, which covers all the allottees.

19. It appears that the Appellant made a misleading statement before the Hon'ble Supreme Court that the settlement plan dated 13th February 2020 covers all the allottees. In fact, to date, there is no settlement plan covering all the allottees. There is no consensus among the allottees. Some of the Allottees favour the Settlement Plan, and others oppose the same. There is nothing on record to show that there is consensus for the purported Settlement plan. There is a trust deficit among the homebuyers. The proposed Reverse Insolvency appears to be a device for buying time. Based on the settlement plan and lack of consensus among allottees of flats and the present Promoters, there is no hope of success in arriving at a settlement. Thus, we are of the considered opinion not to delay the CIRP proceeding on the pretext of the so-called reverse CIRP.

20. In the circumstances, we observe that the Settlement Plan dated 12th February 2020 and the further Revised Settlement Plan dated 12th March 2021 deserves to be rejected. We do not think it proper to provide any further time for getting consensus for arriving at a settlement for completion of the Project. However, the settlement process is provided under Section 12A of the Insolvency and Bankruptcy Code, 2016. Therefore, if settlement takes place, the same can be filed u/S 12 A of the Code before the Adjudicating Authority.

21. We further direct IRP/RP to hold the meeting of the Committee of Creditors within ten days from the date of order and decide a future course of action about a resolution for completion of the CIRP of the Corporate Debtor. The Appeal is listed for hearing on 25th November 2021. Parties may file their notes of submission not only in soft copy but also in hard copy with a copy in advance to opposite parties before the next date of hearing.