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Anand Murti vs. Soni Infratech Private Limited & Anr.

Civil Appeal · 2022 INSC 487Decided 27 Apr 2022
Civil Appeal No. 7534 of 2021
L. Nageswara Rao · B.R. Gavai

Background

The appellant was the suspended director/promoter of a company (the Corporate Debtor) developing a housing project that had stalled due to disputes among its earlier promoters. After one home-buyer sought a refund and it wasn't paid, the company was pushed into insolvency proceedings (CIRP) by the National Company Law Tribunal (NCLT) in 2019. The promoter repeatedly sought to instead settle with all home-buyers and complete the project himself, but the National Company Law Appellate Tribunal (NCLAT) rejected his latest modification application in November 2021, prompting this appeal to the Supreme Court.

Decision Breakdown

The Supreme Court noted that, following its own earlier order, the promoter had convened a stakeholders' meeting in October 2021 where most home-buyers' objections to his revised settlement/resolution plan were resolved, and the promoter's status report confirming this was apparently overlooked by the NCLAT when it rejected the modification application. The promoter filed a fresh sworn affidavit committing to complete the project in phases within 6-15 months, arrange initial funding of Rs. 10 crore, not increase flat prices, and refund the handful of remaining objecting buyers (7 out of 452) with interest. Finding this a genuinely better outcome for the home-buyers than continuing a full insolvency process (which could involve cost escalation), the Court allowed the appeal, set aside the NCLAT's rejection order, permitted the promoter to complete the project on the terms of his affidavit-undertaking, and directed periodic progress reports to the NCLAT.

Lesson Learnt

In insolvency cases involving unfinished housing projects, courts will favour a workable, home-buyer-backed settlement that gets flats delivered over a prolonged formal insolvency process, provided the promoter puts concrete, enforceable commitments (funding, timelines, no price escalation) on record by way of a sworn undertaking.

Official source (sci.gov.in)View Judgment (PDF)

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