IBC – NCLAT – Section 9 application – Collusion of Corporate Debtor & Operational Debtor to overcome RERA orders for protection of home buyers
M/s. AG8 Ventures – registered company and Corporate Debtor – is developing real estate projects in Madhya Pradesh and obtained registration for 11 projects from MP RERA.
The CD had allotted residential / commercial units to allottees from 2010 onwards. It had also executed agreements with M/s. D.B.Corp Ltd (Operational Creditor) for publicity.
In 2020-2021, the RERA, on various complaints, directed CD to refund amount with compensation.
By the order dated 8.1.2022, the RERA observed that CD diverted funds from the project and the designated account and also cancelled registration.
On 23.3.2022, RERA revoked registration of Aakriti Business Arcade and appointed agency for completion of the project under Section 8 of the RERA Act, 2016.
On 13.1.2022, the Operational Creditor M/s. D.B.Corp issued notice to CD for payment of operational debt of Rs.10,77,17,000/- with interest.
On 2.2.2022, the OC filed Section 9 Application before NCLT.
On 5.8.2022, the NCLT admitted Section 9 IBC application of the operational Creditor M/s. D.B.Corp. This is challenged by MP RERA in CA Nos.1172-1173 of 2022.
On 11.8.2022, the Interim Resolution Professional was appointed. This was challenged in CA (AT) (Ins) No.1321 of 2022 by the Acquacity Consumer and Societies Welfare Society.
HELD that RERA as also the Association of Home Buyers have locus standi to file appeal challenging the order under Section 61 of the IBC, section 9 application is collusive proceedings, there was no operational debt since non-discharge of Barter component by the CD shall not lead to any operational debt.
Order dated 8.12.2023 in Company Appeal (AT) (Insolvency) No.1172-1173 of 2022 – Real Estate Regulatory Authority, M.P. Vs. M/s. D.B. Corp Limited and another.with connected matters.
