IBC Versus Slum Development – Petition of Resolution Professional – Landmark judgment of the Bombay High Court
Chequered history at a glance – On 21.3.1997, Truly Creative Developers purchased the Plot of 14,000 sq.mts in Magathane in Borivali (East). However, the Letter of Intent dated 5.12.1995 was issued on the slum redevelopment proposal of Developer even before it became owner.
On 28.10.2003, revised LoI was issued. There was no development and no construction.
On 24.8.2018, show cause notice under Section 13(2) of the Slum Act was given to the Developer. However, on 7.3.2019, SRA permitted the Developer to continue with the scheme.
However, by the order dated 25.10.2019, the AGRC terminated the appointment of the Developer on the application of the society.
In 2019, the Society appointed another Developer. The writ petition filed in 2019 challenging the said appointment was dismissed in default on 17.1.2024.
On the application dated 18.11.2021 of the Society for acquisition of the land, SRA issued the Notification dated 23.5.2022. On 24.3.2023, the public notice for acquisition was issued.
In the meanwhile and after 23.5.2022, the NCLT admitted the proceeding under IBC against the Developer and appointed the present petitioner as IRP. He filed this petition only on the basis of moratorium.
IBC Versus Slum Development – Landmark Judgment – if the provisions of IBC and pendency of CIRP to protect assets of a corporate debtor can ever prevail over the considerations of a welfare statute and individual citizens from whom Slum Act is framed. Until the gamut of CIRP is over, the members of the respondent no.4 society will suffer. To hold otherwise would simply be unthinkable. It would mean that a writ Court would put a premium on corporate wrongdoing and that even a defaulting corporate debtor who had not complied with the terms of LoI could now use the golden parachute of IBC.
Judgment dated 3.4.2024 in Writ Petition No.1398 of 2024 of Rajan Garg, Resolution Professional Vs. Chief Executive Officer, SRA and others
