NCLT Delhi Rules, Application U/S 19(2) Of IBC Is Not Maintainable Against Third Party
Pranav B Prem
The National Company Law Tribunal (NCLT), New Delhi Bench, Court-III, comprising Shri Bachu Venkat Balaram Das (Judicial Member) and Shri Atul Chaturvedi (Technical Member), held that an application under Section 19(2) of the Insolvency and Bankruptcy Code, 2016 ("Code") is not maintainable against a third party who is not connected with the Corporate Debtor. The decision came in a case where the Resolution Professional (RP) sought to compel M/s. Highness Infradevelopers Pvt. Ltd. ("Respondent") to share project details and financial information regarding a project undertaken in consortium with the Corporate Debtor, M/s. Andes Town Planners Pvt. Ltd.
Background
The CIRP for the Corporate Debtor commenced on 2nd March 2023, and Ashok Kumar Gupta was appointed as the Interim Resolution Professional. The RP sought information related to a commercial project named "Rohtas Summit" developed pursuant to a 2011 Consortium Agreement between the Corporate Debtor and the Respondent. The RP alleged non-cooperation from the Respondent in sharing key documents, such as sale records, project accounts, and allocation details. The application was filed under Section 60(5) read with Section 19(2) of the Code to direct the Respondent to cooperate in handing over the said information.
Contentions of the Resolution Professional
The RP submitted that the Corporate Debtor, being one of the original owners of the land, had entered into a Consortium Agreement with the Respondent to construct and divide the "Rohtas Summit" project in a 45:55 ratio. As per the RP, since the CIRP had commenced, the Respondent was obligated to cooperate by sharing all relevant project information, including unit sales, bank accounts, revenue sharing, and registry details. The RP contended that despite several reminders and emails, the Respondent did not provide adequate information. Further, it was argued that since portions of the Rohtas Summit were mortgaged by the Corporate Debtor and financial creditors such as IFCI had raised claims, it was essential to have full disclosure regarding the project to preserve and maximize the value of the Corporate Debtor’s estate.
Contentions of the Respondent
The Respondent, on the other hand, firmly denied the allegations of non-cooperation. It submitted that the Consortium Agreement dated 28.09.2011 and the Supplementary Agreement dated 12.11.2018 clearly delineated its share in the Rohtas Summit project. According to the Respondent, both parties had sold off their respective shares long before the initiation of CIRP, and hence the project or any of its unsold units were not part of the Corporate Debtor’s assets. The Respondent emphasized that its share was registered with RERA in its own name, and all developments had been carried out at its own cost. The RP’s request for documents, according to the Respondent, pertained to its independent business and not that of the Corporate Debtor. It also highlighted that it had already submitted relevant documents—such as the Consortium Agreement, sanctioned layout plan, and registry details—to the RP. Repeated demands by the RP were thus seen as harassment, especially when directed towards third-party unit owners and tenants.
Tribunal’s Findings and Conclusion
After hearing both parties and reviewing the agreements, the Tribunal concluded that the Respondent’s share in the Rohtas Summit project constituted independent property that did not belong to the Corporate Debtor. It found that both parties had executed the agreements well before CIRP and had divided the constructed property in a clear and equitable manner. Since the Respondent had already sold off its share and had provided available documents to the RP, it could not be compelled to provide further information that was unrelated to the Corporate Debtor.
Most significantly, the Tribunal reiterated that Section 19(2) of the Code applies only to individuals or entities connected with the Corporate Debtor—such as promoters, directors, and personnel—not to third parties. Since the Respondent was not part of the management or personnel of the Corporate Debtor and its share was already alienated, the Tribunal held that the application filed under Section 19(2) was not maintainable. The application was accordingly dismissed.
Appearance
For Applicant: Mr. Gaurav Singh, Mr. Shwetank Sailakwal, Advocates
For RP: Mr. Anuj Kr. Pandey, Mr. Utsav Mukherjee, Mr. Saksham Ahuja, Mr. Mayukh Roy, Advocates
For Intervener: Ms. Niharika Gupta, Mr. Raj Dev Singh, Advocates
For Respondent: Mr. Ravi Sehgal Advocate
Cause Title: Piramal Capital & Housing Finance Limited V. M/s Andes Town Planners Private Limited
Case No: CP (IB) No. 317 (ND)/ 2022, IA 3738/2023, Intervention P 28/2024
Coram: Shri Bachu Venkat Balaram Das [Hon’ble Member (Judicial)], Shri Atul Chaturvedi [Hon’ble member (Technical)]
[Read/Download order]
