Uttar Pradesh Real Estate Regulatory Authority Bench - l, Greater Noida Office S.N. complaint number | Complainant Name 6 NCR44/07/I23/20I9 Gaurav Gupta NCRI44/07/666/209 Prabha Rai Versus Jay Pee Infratech Ltd — Opposite party ORDER Complainant Gaurav Gupta and 0l other complainants as per list attached have filed complaints/cases under Real Estate (Regulation and Development) Act, 20l6 against Jai Prakash Infratech Ltd ,Opposite Party/Respondent before U.P.RERA and the matter(s) were put up to this Bench at Greater Noida Office. Notice(s) were issued to Opposite Party i.e. Jai Prakash Infratech Ltd and in reply it was stated that insolvency proceedings under Insolvency and Bankruptcy Code (IBC), 206 against the Opposite Party are pending in NCLT and the IRP (Interim Resolution Professional) has NS ee Checked By PRANJAL MISHRA been appointed. Hence under the provision Sec 7 of the IBC proceedings against JIL are cannot proceed at this stage. Since the nature of all these cases is similar viz non completion of the project/delivery of the Unit(s) booked by the complainants and reliefs sought from the Authority are refund of monies paid to the Opposite Party/ Promoter with interest and with or without compensation are being clubbed and considered, jointly and a common Order is being passed.

The homebuyers have complained that the builder/Promoter/Opposite Party, Jai Prakash Infratech Ltd, had launched many projects in Noida and Greater Noida and collected money to the tune of thousands of crores. Counsels for complainants informed the Bench that Opposite Party/ Respondent had started construction in few projects but discontinued construction at various stages. The due date for the completion of those projects, as per the buyer’s agreement/ Agreement to Sale, has been over long back and projects have been inordinately delayed. Complaint No. NCRI44/09/003/209 has been made the leading case.. Respondent filed an application and said this project is under insolvency because IDBI bank instituted a case under section 7 of IBC, 20l6 against JayPee Infratech Ltd., which was admitted by NCLT, Allababad and vide order dated 9.8.207 IRP was appointed. Allahabad bench further, prohibited the institution of suits or continuation of pending suit or proceeding against JIL, including execution of any ——— ee | en Checked By PRANJAL MISHRA

judgment, decree or order in any court of law, tribunal arbitration panel or other authority, The said order passed by NCLT was challenged in Writ Petition (Civil) No. 444/207 before the Hon'ble Supreme Court, The Hon'ble Supreme court vide its order dated .9.207 was pleased to direct that all suits and proceeding instituted against JIL shall in terms of Section 4(/)(a) remain stayed. In the view of that order, respondent prayed that proceeding of the instant complaint has stayed till disposal of insolvency matter against the answering opposite party. Learned Counsels for the complainants have informed that National Company Law Tribunal (NCLT), New Delhi Bench has initiated insolvency proceedings under Insolvency and Bankruptcy Code (IBC), 206 against the Opposite Party. On June 6, 208, the insolvency proceedings have commenced and Mr Anuj Jain (CA) has been appointed as Interim Resolution Professional Under the circumstances, the issues before UP RERA are: (a)Whether the Authority, at this stage, can continue to hear/continue proceedings in complaints pending before it? (b) Whether, any fresh complaints of such nature under Real Estate (Regulation & Development) Act, 206 can _ be proceeded by the Authority on or after the day the insolvency application is admitted and moratorium is applied i.e. ‘Insolvency Commencement Date’. ie Checked By PRANJAL MISHRA

We have examined and find that: The general principle of interpretation of law is derived from the maxim ‘leges posteriores priores conterarias abrogant’ i.e. ‘where the provisions of a later document are contrary to those of an earlier, the earliest must be considered as repealed.’ It is also pertinent to note that the general rule of interpretation i.e. in case of conflict between two statutes, dealing with the same issue, special law shall prevail over general law. In this case both, Insolvency and Bankruptcy Code (IBC) and Real Estate (Regulation & Development) Act (RERA) are special central legislations. In such a situation harmonious construction of laws to the extent possible need to be made. However, in the present situation, due to conflicting nature, the law which has come into effect later should prevail. In Bhoruka Steel Ltd. v. Fairgrowth Financial Services Ltd., Bombay High Court observed “Where there are two special statutes which contain non-obstante clauses the later statute must prevail. This is because at the time of enactment of the later statute, the legislature was aware of the earlier legislation and it’s non-obstante clause. If the legislature still confers the later enactment with a non-obstante clause it means that the legislature wanted that enactment to prevail. If the legislature does not want the later enactment to prevail then it could and would provide in the later enactment that the provisions of the earlier enactment continue to apply”.

शा Checked By PRANJAL MISHRA Further, in Ashoka Marketing Ltd and Another v. Punjab National Bank and Ors., Apex Court clearly held that “in the case of inconsistency between the provisions of two enactments, both of which can be regarded as special in nature, the conflict has to be resolved by reference to the purpose and policy underlying the two enactments and the clear intendment conveyed by the language of the relevant provisions therein. In case of conflict between two Special Acts, the later one will prevail as the maxim is leges posteriores priores conterarias abrogant. But, as far as possible, both Acts shall be harmoniously construed. If an interpretation is possible so as to avoid conflicts such interpretation shall be accepted, so that objects of both Acts can be fulfilled.” The objective of IBC as stated in the Press Release by the Ministry is as follows: The objective of the new law is to promote entrepreneurship, availability of credit, and balance the interests of all stakeholders by consolidating and amending the laws relating to reorganization and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner and for maximization of value of assets of such persons and matters connected therewith or incidental thereto. The law aims to consolidate the laws Yr" Checked By PRANJAL MISHRA

relating to insolvency of companies and limited liability entities (including limited liability partnerships and other entities with limited liability), unlimited liability partnerships and individuals, presently contained in a number of legislations, into a_ single legislation. Such consolidation will provide for a greater clarity in law and facilitate the application of consistent and coherent provisions to different stakeholders affected by business failure or inability to pay debt. Preamble of IBC provides as follows: An Act to consolidate and amend the laws relating to reorganization and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximisation of value of assets of such persons, to promote entrepreneurship, availability of credit and balance the interests of all the stakeholders including alteration in the order of priority of payment of Government dues and to establish an Insolvency and Bankruptcy Board of India, and for matters connected therewith or incidental thereto. ee a Checked By PRANJAL MISHRA From both the above, the objective of IBC is to reorganization and insolvency resolution of corporate entities etc. to balance the interests of the all the stakeholders and to maximise value of assets for all stake holder .Therefore, this is applicable in a situation where an entity has reached a stage close to insolvency or requires reorganization wherein the interests of all the stakeholders is at risk.

Whereas, objective of RERA can be understood from Preamble to the Act. Preamble of RERA is as follows: To establish the Real Estate Regulatory Authority for regulation and promotion of the real estate sector and to ensure sale of plot, apartment of building, as the case may be, or sale of real estate project, in an efficient and transparent manner and to protect the interest of consumers in the real estate sector and to establish an adjudicating mechanism for speedy dispute redressal and also to establish the Appellate Tribunal to hear appeals from the decisions, directions or orders of the Real Estate Regulatory Authority and_ the adjudicating officer and for matters connected therewith or incidental thereto. Therefore, the objective of RERA is more focused to a certain set of stakeholders in an entity and governs/ regulates a project or transactions pertaining to a stream of stakeholders of an entity etc. Om a OX Checked By PRANJAL MISHRA It is also to be noted that the RERA was enacted in March 206 while IBC was enacted subsequently in May 206. Further, considering the huge public uproar, IBC was amended in 208 and included home buyers in the definition of “Financial Creditors”. This clearly indicates the intention of the legislature to provide for overriding effect of IBC which not only takes into consideration interests of homebuyers but also considers interest of other financial creditors in special situation.

Therefore, while both are special laws with specific purposes, the interpretation which fulfils the objects of both the legislations should be adopted. Thus, IBC seems to be legislation in a given situation protects the interest of all the stake holders including homebuyers, thereby should prevail over RERA. In view of the above, the moratorium under Section 4 of IBC should be applicable for the matters before RERA. Section 4 of IBC is reproduced as under: i}4 Moratorium - (7) Subject to provisions of sub-sections (2) and (3), ‘on the insolvency commencement date, the Adjudicating Authority shall by order declare moratorium for prohibiting all of the following, namely: (a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgement, decree or Checked By PRANJAL MISHRA order in any court of law, tribunal, arbitration panel or other authority; (b) transferring, encumbering, alienating or disposing off by the corporate debtor any of its assets or any legal right or beneficial interest therein; (c) any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002); (d) (d) The recovery of any property by an owner or lessor where such property is occupied by or in

the possession of the corporate debtor. (2) The supply of essential goods or services to the corporate debtor as may be specified shall not be terminated or suspended or interrupted during moratorium period. (3) The provisions of sub-section (I) shall not _ 4207 (a) such transaction as may be notified by to (a) such transaction as may be notified by ९. Checked By PRANJAL MISHRA the Central Government consultation with any financial regulator; (b) a surety in a contract of guarantee to a corporate debtor. (4) The order of moratorium shall have effect from the date of such order till the completion of the corporate insolvency resolution _ process: Provided that where at any time during the corporate insolvency resolution process period, if the Adjudicating Authority approves the resolution plan under sub-section (7) of section 37 or passes an order for liquidation of corporate debtor under section 33, the moratorium shall cease to have effect from the date of such approval or liquidation order, as the case may be. Therefore, the proceedings i.e. the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgement, decree or order before RERA, till the completion of the corporate insolvency resolution process, should be kept in abeyance.

Under the circumstances, all the complaints which have so far been filed/ proceeding at various stages or are being filed against the Promoter/ Respondent / opposite Party i.e Jai Prakash Infratech Ltd are Checked By PRANJAL MISHRA to be kept on abeyance till the insolvency proceedings under IBC are completed. Those buyers who have not able to filed claims should approach Interim Resolution Professional/National Company Law Tribunal. The next date may be fixed once the IBC proceedings are concluded. The orders be uploaded on the portal. Date: 09 / /2/209 Kp yr rg (Kalpana भी \ (Member), UP RERA