# In the matter of Kamla Industrial Park Ltd. & Ors. vs. Municipal Corporation of Greater Mumbai

> HC judgment dated 2023-09-21. Citation: TCN-2023-HC-00035. The case involves a commercial construction project on a large tract of land in Kandivali (West),…

- **Court:** HC
- **Order date:** 21 Sept 2023
- **Citation:** TCN-2023-HC-00035
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-new-delhi/kamla-industrial-park-ltd-ors-vs-municipal-corporation-of-greater-mumbai-bd5f74d3

## Summary

### Background

The case involves a commercial construction project on a large tract of land in Kandivali (West), initiated by Metallica Industries Limited, controlled by Jitendra Jain. The construction faced irregularities and violations of sanctioned plans. The Municipal Corporation of Greater Mumbai (MCGM) issued a stop-work notice but did not take further action to prevent the illegal construction. Metallica sold industrial galas in the project to numerous buyers. Due to financial difficulties, Metallica entered the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC). The gala purchasers formed Kamla Industrial Park Limited (KIPL) to submit a resolution plan to take over and revive Metallica. The NCLT approved KIPL's resolution plan. After

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## Facts

Metallica Industries Limited, controlled by Jitendra Jain, undertook a commercial construction project on land in Kandivali (West) around 1976. The project involved several CTS numbers: 349, 349/1, 350, 350/1, 351, 351/1, 352 and 352/1. Metallica submitted plans to the MCGM in 2008. The MCGM issued an Intimation of Disapproval (IOD) and later a Commencement Certificate (CC) in 2009, which was extended in 2012. Between 2010 and 2011, Metallica sold industrial galas to 374 buyers. Metallica constructed three additional floors between January and September 2013, exceeding the approved CC. The MCGM issued a stop-work notice in September 2013. Metallica's architect, Khanolkar, applied for regularization. Metallica entered CIRP in 2018 following a petition by the State Bank

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## Issues and analysis

### Issue 1: Whether the MCGM's demand for a regularization penalty is sustainable under the Insolvency and …

**Ratio:** The Supreme Court has established that the resolution applicant starts on a clean slate,

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**Reasoning:** The court reasoned that the regularization penalty was a 'claim' that should have been

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**Interpretation:** Section 31 of the IBC mandates that the approved resolution plan is binding on

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**Application:** The court applied the ratio to the facts, noting that the MCGM was aware of the

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## Parties

- **Judges:** G.S.P…; Kamal K…
- **Appellants:** Kamla Industrial…
- **Respondents:** Metallica…; Municipal…
- **Other parties:** Kohi…

## Timeline

- **1976-01-01 — Land Acqui…**: Metallica Industries Limited…
- **2008-05-07 — Submission o…**: Metallica submitted…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 31 — Approval of resolution plan](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-31)

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