Facts: 141 individuals, as allottees in the 'Grand Venezia Commercial Tower' project, filed a Company Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) against Grand Venezia Commercial Towers Private Limited and Bhasin Infotech and Infrastructure Private Limited, alleging non-completion and non-delivery of units. The NCLT admitted the petition, leading to appeals before the NCLAT by the erstwhile Directors of the corporate debtors. During the NCLAT proceedings, one of the appellants, Satinder Singh Bhasin, offered to deposit ₹15.62 crores to settle claims, which was rejected. The NCLAT dismissed the appeals, leading to further appeals before the Supreme Court.
Procedural Posture: The case reached the Supreme Court via Civil Appeals against the NCLAT's judgment, which had upheld the NCLT's decision to admit the company petition under Section 7 of the IBC. The appeals challenged the maintainability of the petition, the fulfillment of the threshold of 100 allottees, and the rejection of a settlement offer.
Issue: (1) Was the company petition under Section 7 of the IBC maintainable against both corporate debtors jointly? (2) Did the allottees meet the threshold requirement of 100 allottees as prescribed by the second proviso to Section 7(1) of the IBC? (3) Was the NCLAT justified in rejecting the settlement offer made by one of the appellants? (4) Was the alteration of names of allottees in the company petition after it was filed, but before registration, an abuse of process?
Holding: The Supreme Court dismissed all the appeals, holding that (1) the company petition was maintainable against both corporate debtors jointly, (2) the threshold of 100 allottees was met as of the date of filing the petition, (3) the NCLAT was justified in rejecting the settlement offer, and (4) the alteration of names of allottees before registration was not an abuse of process.
Reasoning: The Court reasoned that the two companies were intrinsically linked in the project, justifying a joint insolvency process. The threshold of 100 allottees was determined based on the date of filing, relying on Manish Kumar vs. Union of India. The rejection of the settlement offer was upheld as the premise for the offer was flawed. The Court also held that alterations to the petition before registration were permissible under Rule 28 of the National Company Law Tribunal Rules, 2016, citing Surendra Trading Company vs. Juggilal Kamlapat Jute Mills Company Limited and others. The Court also relied on the NCLAT's judgment in Mist Avenue Pvt Ltd vs. Nitin Batra and others to support the maintainability of a joint petition against related corporate debtors in real estate projects. The court also considered the UPSIDA's regulations regarding occupancy certificates.