[Per; Ms. Shreesha Merla, Member (Technical)]:

1. This `Appeal’ is preferred by the Resolution Professional (`RP’) aggrieved by the `Impugned Order’ dated 04.09.2020 passed by the
`Adjudicating Authority’ (National Company Law Tribunal, Bengaluru Bench), in the `Common Order’ in IAs No.205-208, 213-218, 304-307, 309-311/2020, in C.P. (IB) No.84/BB/2019, by which common`Impugned Order’, the `Adjudicating Authority’ has dismissed all the`Applications’, observing as follows:

“26. As per information furnished by the Applicant through Information Memorandum, aggrieved by the actions of Directors of the Corporate Debtor of the Company, several of people running into hundreds, have already filed Civil and Criminal cases against the Company and its Directors before various Civil/Criminal Courts and they are prosecuting their cases. And those people have absolute right to prosecute their cases before respective Courts for their remedy. Since they have already initiated before initiation of CIRP in question, the Aggrieved Parties and concerned Courts cannot be restrained by virtue of moratorium, from prosecuting their cases before the Courts. Only the aggrieved Parties of Flat Buyers and Creditors of Dreamz Sumadhur are deemed to be covered by the instant CIRP.

27. The Applicant/RP uses to file several Interim Applications seeking several directions. Earlier also I.A. Nos. 660, 661 and 662 of 2019 were filed by him and those were disposed of by common order dated 17.12.2019 by the Adjudicating Authority by directing the Applicant to discharge his duties as per extant provisions of the Code and rules made thereunder by granting liberty to him for filing necessary Application(s) with substantial evidence to seek any direction sand do not resort to file any casual application(s) covering his duties and seek advise and he can file Application only when there is legal right and entitled for such relief from the Adjudicating Authority. He was also directed not to incur money from Corporate Debtor in casual way and is responsible for all the expenditure he used to spend. In spite of that directions, the Applicant without discharging his duties as per law, is again resorting to file several Applications raising so many issues, which are not all tenable and in fact several of those issues fall in the jurisdiction of the civil courts.

28. For the aforesaid reasons and circumstances of the case and the Law on the issue, we are of considered opinion that the Applicant has exceeded his jurisdiction and interpreted the CIRP in question, so as to suit him rather than to achieve object of Code, in terms of the order dated 20th August, 2019 passed in CP (IB) No.84/BB/2019, and thus initiated several actions and filed the instant Applications, which are not at all maintainable. Therefore, in the interest of justice and equity, the CIRP initiated by the Adjudicating Authority, vide its order dated 20.08.2019 should be interpreted and read in relation to the project Dreamz Sumadhur only and not in respect of all the projects of the Corporate Debtor, so that CIRP in question initiated by the Adjudicating Authority, would be concluded in terms of extant provisions of Code and the Rules thereunder. We are also supported in this regard by the judgement of the Hon’ble NCLAT in Flat Buyers v/s Umang Realtech Private Limited, as cited supra.”

2. Learned Counsel for the `Appellant’/RP submitted that the IRP Sh. Ashok Kriplani was replaced by the present `Appellant’, Mr Konduru Prasanth Raju vide `Order’ dated 08.03.2021 and that pursuant to his appointment, the RP had undertaken steps to perform his duties and filed I.A.431/2021 to substitute himself. It is submitted that the `Adjudicating Authority’, while considering 17 `Applications’ filed by the Erstwhile Resolution Professional (`ERP’) observed that ‘in the interest of justice and equity, the Corporate Insolvency Resolution Process (`CIRP’) initiated by the `Adjudicating Authority’, vide `Order’ dated 20.08.2019 should be interpreted to read in relation to Dreamz Sumadhur Project only and not in respect of all the Projects of the Corporate Debtor’. It is averred that despite the fact that there was no `Application’ seeking Project Wise Insolvency filed by the RP, the `Adjudicating Authority’ has Sou Moto passed this `Order’. It is submitted that the `Adjudicating Authority’ had passed the Admission under Section 7 against the entire
`Corporate Debtor’ and not against the single Project and therefore the`Impugned Order’ amounts to a retrospective view which is impermissible as the Court does not provide for any `Power of Review’ to the `Adjudicating Authority’. Dreamz Sumadhur Project has approximately 300 Homebuyers, but the entire `Corporate Debtor’ put together has 2,000 plus Homebuyers.

3. It is brought to the notice of this Bench that in C.P. (IB) No.148/2019, the `Tribunal’ disposed of the Petition filed by the Homebuyers of `Dreamz Sumadhur Project’ of the `Corporate Debtor’, by stating that the Applicants can file their claims with the ERP who was handling the CIRP of Dreamz Infra India Ltd. as a whole.

4. Learned Counsel for the `Appellant’’/RP strenuously argued that the `Adjudicating Authority’ has wrongly relied on the Judgement of the NCLAT Principal Bench, New Delhi in the matter of `Flat Buyers Association Winter Hills-77, Gurgaon’ Vs. `Umang Realtech Pvt. Ltd. Through IRP & Ors.’Comp. App. (AT) (Ins.) No. 926/2019, whereby and whereunder the concept of Project Wise Insolvency was laid down. It is argued that in `Umang Realtech Pvt. Ltd.’ (Supra), the Promotor had agreed to profit lending to the`Corporate Debtor’ to complete the Project in question and therefore the Bench did not suggested Project Wise Resolution and reverse CIRP, but in the instant case, there is no such offer by any Promotor to infuse funds and moreover, the Promotor, Directors are in jail.

5. It is also submitted that Government of Karnataka passed a`Notification’ bearing No. RD-17-GRC 2017 dated 20.06.2019 notifying the `Corporate Debtor’ as one of the Companies which has engaged in fraudulent transactions and failed to return deposits to the depositors/Homebuyers, and hence the `Corporate Debtor’ does not qualify for application of reverse CIRP process, as all the Corporate Debtor’s assets are under severe stress and are subject to proceedings under the Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004 (`KPIDFE Act, 2004’). It is further argued that on a separate question of law, the Hon’ble High Court of Karnataka is seized of the issue in WP No. 1343/2021 and WP No.207/2022 as to whether IBC or KPIDEF Act will prevail over the other, particularly in the case of the `Corporate Debtor’. However, it is humbly submitted that there is no impediment from these proceedings before the High Court to the present Appeal. A decision from this Tribunal on the correct legal position in the present matter will only in fact aid the Hon’ble High Court of Karnataka in deciding the Writ Appeals ultimately. It is submitted that the hearing on merits in these Writ Appeals has not yet commenced and the tentative next date of Hearing is 23.05.2023.

6. Learned Counsel for the Appellant placed reliance in the matter of `N. Kumar’ Vs. `M/s. Tata Housing Finance Ltd.’(2022) ibclaw.in 329 NCLT, in which the `Adjudicating Authority’ in para 9 has observed as hereunder:

“9. Heard the Learned Counsel for the Applicant and taking into account the facts of the present case, as well as the documents submitted by both the Applicant as well as the Dissenting Financial Creditor vis., M/s. Tata Capital Housing Finance Ltd. On a thorough reading of the IBC, 2016 read alongwith the regulations made thereunder envisages the insolvency of the Corporate Debtor and it can be seen that there is no concept of limited CIRP or CIRP for specific projects anywhere.

It can be further seen in the Hon’ble Supreme Court Judgement in `Pioneer Urban Land and Infrastructure Ltd.’ Vs. `Union of India’ [WP(Civil) No.43/2019), that the IBC, 2016 is a beneficial legislation which can be triggered to put the Corporate Debtor back on its feet in the interest of unsecured creditors like allottees, so that a replaced management may carry out the real estate project as originally envisaged and deliver the flat/apartment as soon as possible or pay late fees for late delivery.

As far as the case laws relied on by the Applicant is concerned, this Adjudicating Authority is of the view that, the mechanism adopted by the Hon’ble NCLAT is too peculiar to the facts and circumstances of the Winter Hills Judgement and cannot be used as a precedent in the present scenario. Moreover, in the present case, as no promoters have put forward any funds to avoid CIRP, the process of project-wise CIRP cannot be followed here as how it was followed in the Winter Hills Judgement and the decision in Rajesh Goyal.”

7. Learned Counsel for the Appellant also placed reliance in the matter of `Vistar ITCL (India) Ltd. & Ors.’ Vs. `Satra Properties (India) Ltd.’2020 SCC OnLine NCLT 12430, in which the Adjudicating Authority in para 41 has observed as follows:
“41. I am unable to accept the submissions of the Ld. Sr. Counsel for the reason that the amount raised by the Corporate Debtor by issue of these debentures were not exclusively invested in the Jodhpur project alone but only the property of the jodhpur project was given as security by creation of mortgage. The record shows that the money raised by these debentures were utilized for general purpose and other projects also. Hence the submission of the Ld. Sr. Counsel is rejected.”

8. It is argued by the Learned Counsel for the `Appellant’ that the`Impugned Order’ is not in line with the spirit of the Code as restriction of CIRP only to one Project has got the multiplicity of proceedings and I.A.329/2023 is filed for production of additional documents which include proceedings under the KPIDFE Act, 2004; proceedings before the Hon’ble High Court of Karnataka and CIRP of the `Corporate Debtor’ in respect of other Projects. It is brought to the Notice of this Bench that in C.P. (IB) No.83/BB/2019, Section 7 `Application’ has been admitted against another Project namely M/s. Dreamz Sneh Project Allottees Welfare Association on 15.02.2023. It is submitted that the `Order’ has necessitated multiple Insolvency Resolution Proceedings initiated against the same `Corporate Debtor’ and that the concept of reverse CIRP is inapplicable to the facts of this case as `Corporate Debtor’ and its Promotors have opened 50 different Bank Accounts where in deposits from Homebuyers were accepted/transferred into. It is also submitted that the `Appellant’, as part of his report submitted to the Hon’ble High Court of Karnataka in Writ Petition No.7500/2021, which was disposed of vide`Order’ dated 27.02.2023, that the Homebuyers lack Commercial Wisdom to take the CIRP forward and that they have voted in the negative for offer of refund; for construction of new homes etc. The RP filed the Minutes of the Meeting of the 10th CoC stating that the CoC Members are not interesting in Resolution.

9. The first Respondent filed his `Reply’ stating that the first Respondent does not have any nexus or direct relationship with the`Corporate Debtor’, namely M/s. Dreamz Infra India Ltd. except for the fact that they are the absolute owners in possession of the property bearing old SY No. 130/1, new SY No. 130/3, measuring to an extent of 1 Acres 6 Guntas situated at Doddabanahalli, Bidarahalli Hobli, Bangalore, East Taluk, Bangalore, Urban District. The first Respondent and his co- Purchaser had not entered into any venture of the `Corporate Debtor’ and submits that the said property belongs to Mr. Rajeshwara Reddy who purchased the said property under the Sale Deed dated 13.07.2010, and is absolute owner in possession and enjoyment of the said property without any hindrances. Mr Rajeshwara sold the said property to Mr. Harish J Naidu who converted the land from agricultural to non-agricultural residential purpose and thereafter sold the land to M/s. Dreamz Infra India Ltd. through Sale Deed dated 30.08.2016. It is further submitted that M/s. Dreamz Infra India Ltd. had sold the subject property to the first Respondent Mr. Suresh Kumar along with his co-Purchaser and they are presently the joint owners who are in a possession and enjoyment of the said property.
 
10. It is contended that the scheduled property is not a Project of Dreamz Sumadhur and there is no occasion for the Applicant to involve the individual property which is not an asset of the `Corporate Debtor’.

11. It is submitted by the first Respondent that the CIRP Proceedings were initiated with respect to the `Corporate Debtor’ only on 20.08.2019, while the subject property was purchased by the first Respondent and the co-Purchaser on 03.09.2016, which is much prior to the initiation of the CIRP. It is submitted that the `Adjudicating Authority’ has rightly dismissed the `Applications’ on the ground that they are `Civil’ in nature.

12. The fifth Respondent, the Apartment Buyers Consumers Association (R) filed their Reply stating that Dreamz Infra India Ltd. failed to complete its Project namely Dreamz Sumadhur and has failed to complete the Projects started by it and several Police Complaints were lodged and cases were also filed before the Consumer Forum. It is submitted that initially Section 7 was admitted against Dreamz Infra India Ltd., though Mr. Pratap Chandra Padhy, Mr. Sujay Banerjee and Mr. M.S. Ansari had booked flats in the Project Dreamz Sumadhur and had issued a Legal Notice dated 21.01.2020 to the Appellant which was not placed before the `Adjudicating Authority’. It is submitted that the RP has wrongly invited all `Claims’ from all Homebuyers from different Projects frauded by Dreamz Infra India Limited. It is submitted that the `debts’ of the `Corporate Debtor’ are specific to this Project only and that the constitution of CoC of the Homebuyers ought to be with respect to Sumadhur Project only. It is submitted that the Homebuyers of Sumadhur Project did not accept the extension of the CIRP Arbitrarily done by the RP including all Projects and hence did not pay the fee. It is further argued that Members of the fifth Respondent Consumer Association are not inclined to pay any fees as in the garb of CIRP for Sumadhur Project, the RP has erroneously extended the proceedings to all Projects which is in contempt of the NCLT `Order’ dated 20.08.2019.

13. The sixth Respondent submitted that the CoC of Dreamz Infra India Ltd. filed Writ Petition in W.P. No. 1108/2020, challenging the`Order’ dated 04.09.2021 passed by the NCLT in I.A. No.214/2020 and other IAs filed by the `Appellant’ in C.P.(IB) No.84/BB/2019, before the Hon’ble High Court of Karnataka, at Bengaluru, it has granted an Interim Order staying the `Order’ dated 04.09.2020. The relief sought for in I.A.214/2020 regarding R-6 is with respect to cancellation of a registered document which cannot be granted in summary proceedings before the`Tribunal’ as the appropriate forum for the same would be a Civil Court. It is submitted that this Respondent is not a party to the Company Petition or to the `Application’ and that I.A.214/2020 is not maintainable as it is beyond the scope and ambit of the Section 60(5) of the Code. Further, the JDA in question has been terminated on 13.07.2016 and that the Cancellation Deed is a registered document and that this `Application’ is`time barred’ as a period of Limitation as lapsed.

14. It is submitted by the twelfth Respondent that he is the co-Owner of the scheduled property and along with other landowners entered into an Memorandum of Understanding (`MoU’) dated 10.11.2012 with the
`Corporate Debtor’, whereby and whereunder the `Corporate Debtor’ had agreed to defraud the land belonging to the twelfth Respondent, for building Residential Units and selling it to Potential Buyers. It is only on account of the unwarranted procrastination in executing the JDA, that the Project failing to kickstart, that the twelfth Respondent and other last owners that no choice but to put to an end to the venture Plan with the
`Corporate Debtor’ and therefore revoke the MoU dated 10.11.2012 vide Termination Notice dated 10.05.2013. It is submitted that the `Impugned Order’ does not suffer from any infirmity and that CoC of the `Corporate Debtor’ challenges the `Impugned Order’ before the High Court of Karnataka vide W.P. No.11108/2020, whereby an Interim Stay was granted. It is submitted that if the entire Project is brought under CIRP, there would be multiple proceedings and the CIRP would go on forever defeating the very objective of the Code. The `Order’ dated 20.08.2019, does not contain any direction to the Homebuyers of the `Financial Creditor’ of other Projects to file their `Claim’ before the Interim Resolution Professional (`IRP’). Therefore, it cannot be said that the`Impugned Order’ has deprived the Homebuyers of any of their rights.Keeping in view the nature of `Applications’ filed by the RP before the`Adjudicating Authority’, it is submitted that the `Adjudicating Authority’ has rightly directed that the present CIRP be confined to Dreamz Sumadhur Project only.

15. The 16th Respondent filed `Reply’ stating that they are not a party to the C.P. (IB) No.84/BB/2019 filed by the three Homebuyers of the Dreamz Sumadhur Project and that the 16th Respondent had entered into an MoU dated 11.09.2012 and subsequently a JDA dated 08.11.2012 with the `Corporate Debtor’, whereby and whereunder the `Corporate Debtor’ has agreed to build Residential Units and the Sale Proceeds would be shared between the 16th Respondent and the `Corporate Debtor’. But the`Corporate Debtor’ never adhered to the terms of the MoU and that the 16th Respondent cannot be dragged into these proceedings. The`Application’ is filed by the RP are purely `Civil’ in nature and submitted that the `Adjudicating Authority’ has rightly confined the CIRP to Dreamz Sumadhur Project only. The `Applications’ revolved around disputed questions of fact which need proper adjudication only by a Civil Court.
 
16. The 18th Respondent/ERP submitted that four criteria required for reverse CIRP i.e., fresh financing of the Project, no haircuts, assets being greater than liability, Project Wise Account are not satisfied in the instant case and therefore the `Adjudicating Authority’ has erroneously relied on the Judgement of the NCLAT Principal Bench, New Delhi in the matter of `Umang Realtech Pvt. Ltd.’ (Supra).

17. It is submitted that CIRP was ordered against Dreamz Sneh Project vide `Order’ dated 15.02.2023 despite the fact that Hon’ble High Court of Karnataka had stayed the CIRP against Dreamz Infra India Ltd. vide
`Order’ dated 07.11.2022.

18. It is submitted that the observations made against the then RP/R-18 by the `Adjudicating Authority’ is unwarranted and that the `Adjudicating Authority’ had initially no knowledge of the length and breadth of the case, whereas, by 17.12.2019, the `Adjudicating Authority’ had ample knowledge of the case, but incorrect observations were made. R-18 has prayed for setting aside the CIRP of the Sneh Project of the `Corporate Debtor’ and also to expunge the remarks passed against R-18, and to reimburse the expenses of Rs.42,800/- incurred by him and further to direct the `Adjudicating Authority’ to decide all the `Applications’ filed by the ERP.Assessment:

19. The main issue for consideration in this `Appeal’ is whether the`Adjudicating Authority’ was justified in initially admitting the Section 7`Application’ against the `Corporate Debtor’ and thereafter confining it to a single Project Dreamz Sumadhur Project only. It is the main case of the`Appellant’/RP that the `Adjudicating Authority’ has wrongly relied on the principle laid down by the NCLAT Principal Bench, New Delhi in the matter of `Umang Realtech Pvt. Ltd.’ (Supra), and has confined the CIRP to one Project i.e., Dreamz Sumadhur, in the absence of any Project financing being brought in by the Promotor, and in the absence of any Project Wise Accounts.

20. It is an admitted fact that the three Applicants/Homebuyers who had filed the Section 7 `Application’ were related to Dreamz Sumadhur and subsequent to the calling of the `Claims’ from all Homebuyers, there was lot of confusion and the IRP had filed multiple IAs before the`Adjudicating Authority’, subsequent to which, this `Common Order’ dated 04.09.2020 was passed clarifying that the CIRP was with respect to one Project, namely Dreamz Sumadhur Project only.

21. This `Tribunal’ in the matter of `Ram Kishor Arora Suspended Director of Supertech Ltd.’ Vs. `Union Bank of India & Anr.’ I.A. No.2387/2023 in Comp. App. (AT) (Ins.) No.406/2022, passed by the Principal Bench, New Delhi has directed for Project Wise Resolution wherein the IRP was directed to separate the `Claims’ received with regard to the Project.

22. The scope and objective of the Code is to see that there is`Resolution’ of the `Corporate Debtor Company’ and seek maximization of Assets. A three-Member Bench of the NCLAT, Principal Bench, New Delhi in the matter of `Majestic Towers Flat Owners Association & Anr.’ Vs. `Housing Development and Infrastructure Ltd. & Ors.’Comp. App. (AT) (Ins.) No.980/2021, has held that Project Wise Insolvency can be granted to bring about better Resolution and prevent Liquidation as the sufferers would be the Homebuyers who are thousands in numbers in different Projects and if there is a possibility of Project Wise Resolution, reasonable time could be allowed by the `Adjudicating Authority’ to bring about a proper Resolution.

23. The contention of the ERP/R-18 that another Bench of NCLT Bengaluru has erroneously admitted a Section 7 `Application’ initiating CIRP against another Project namely `Dreamz Sneh’ and that it has to be set aside, is completely unsustainable as the `Order’ was passed in a separate Company Petition dated 15.02.2023, and is based on a different cause of action.

24. Merely because the `Adjudicating Authority’ had relied on `Umang Realtech Pvt. Ltd.’ (Supra), wherein reverse Insolvency was a principle laid down by the NCLAT Principal Bench, New Delhi, and this Project did not have a Promotor to infuse funds, which was the case in `Umang Realtech Pvt. Ltd.’ (Supra), the principle of `Project Wise Insolvency’ also discussed in in `Umang Realtech Pvt. Ltd.’ (Supra), cannot be overlooked and requires considerable attention as it applies to the facts of this case.

25. The Hon’ble Supreme Court has upheld the `Order’ of NCLAT in`Ram Kishor Arora Suspended Director of Supertech Ltd.’ (Supra), and observed that if CoC would be constituted for Supertech Ltd., as a whole, it would cause hardship for the Homebuyers. The Hon’ble Apex Court has observed that if at the present stage, CoC was ordered to be constituted for the `Corporate Debtor’ in displacement of the directions of NCLAT, it would affect the ongoing Projects and cause immense hardship to the Homebuyers sending every Project into uncertainty. The Hon’ble Supreme Court refused to interfere with the directions given by the NCLAT, Principal Bench, New Delhi and upheld the view that`Project Wise Resolution’ may be started under the supervision of the IRP for effective Resolution.
 
26. This `Tribunal’ is of the earnest view that the `Impugned Order’ has nowhere stated that the Promotor was interested in infusing funds into the Project and that reverse CIRP has to be undertaken. In fact, a reference was made to `Umang Realtech Pvt. Ltd.’ (Supra), decision to substantiate the `advantages of Project Wise Resolution and to clarify’ that the CIRP was confined to Dreamz Sumadhur Project only. As regarding the different `Applications’ filed by the RP seeking relief, this`Tribunal’ is of the considered view that the `Adjudicating Authority’ has rightly observed that most of the reliefs sought for were unrelated to Dreamz Sumadhur Project and are `Civil’ in nature requiring adjudication in other fora as the `Adjudicating Authority’ does not have jurisdiction to foray into matters of `title’ and possession of `land’ which are broadly matters of `Civil Litigation’ and cannot be decided under the provisions of IBC. We are also conscious of the fact that the CoC Meeting was only with the Homebuyers of Dreamz Sumadhur Project. As initially the Section 7 `Application’ was admitted against the entire Project and thereafter the clarifications were given by the `Adjudicating Authority’ that the CIRP was confined to Dreamz Sumadhur Project, in the interest of justice, this `Tribunal’ is of the view that the adverse comments made against the RP may be expunged.
 
27. This `Tribunal’ does not find any substantial grounds to interfere with the well-reasoned `Order’ of the `Adjudicating Authority’ `National Company Law Tribunal, Bengaluru Bench’ and hence TA No.79/2021 (Comp. App. (AT) (Ins.) No.851/2020) fails and is accordingly`dismissed’. No `Costs’. The connected pending `Interlocutory Applications’, if any, are `Closed’.