# In the matter of Arun Kumar vs. Sripriya Kumar & Ors.

> NCLAT judgment dated 2023-08-08. Citation: TCN-2023-NCLAT-00302. This case involves a challenge to an order approving a resolution plan under the Insolvency…

- **Court:** NCLAT
- **Order date:** 8 Aug 2023
- **Citation:** TCN-2023-NCLAT-00302
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/arun-kumar-vs-sripriya-kumar-ors-0c03869a

## Summary

### Background

This case involves a challenge to an order approving a resolution plan under the Insolvency and Bankruptcy Code (IBC). The appellant, the promoter of the corporate debtor, contested the approval, raising issues regarding the constitution of the Committee of Creditors (CoC), the inclusion of penal interest in the resolution plan, and the disqualification of the resolution applicant. The appellant argued that the CoC was improperly constituted, that Kotak Mahindra Bank's claim included excessive penal interest, and that the resolution applicant was ineligible under Section 29A of the IBC. The appeal arises from an impugned order dated 2022-04-11 in IA/252/2021 in CP(IB) 305/BB/2019, passed by the National Company Law Tribunal (NCLT), Bengaluru Bench.

## Facts

Mr. Arun Kumar, the appellant, is the promoter of the corporate debtor, Arun Shelters Private Limited. Kotak Mahindra Bank, the second respondent, initiated Corporate Insolvency Resolution Process (CIRP) against the company. The CIRP was limited to the 'Arun Auroville' project. The appellant raised objections regarding the constitution of the Committee of Creditors (CoC), arguing that it should have included creditors from other projects of the corporate debtor. The appellant also contested the inclusion of penal interest in the resolution plan, claiming that Kotak Mahindra Bank's claim was inflated. The appellant further argued that the resolution applicant, the Consortium of Resolution Applicants (SRA), was ineligible under Section 29A of the Insolvency and

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority wrongly directed for project wise CIRP and whether the CoC was …

**Ratio:** CIRP can be confined to one project in a Real Estate Company where the interest of

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**Reasoning:** The NCLAT relied on precedents, including 'Dharmesh S Jain Vs. SREI Equipment Finance

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**Interpretation:** The court interpreted the IBC to allow for project-specific CIRP in real estate

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**Application:** The Tribunal found that the CIRP was correctly limited to the 'Arun Auroville'

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## Parties

- **Judges:** M. Venu…; Shreesha…
- **Appellants:** Arun K…
- **Respondents:** Arun Shelters…; Sripriya…

## Timeline

- **2019-01-01 — CP(IB) 305/…**: CP(IB) 305/BB/2019 filed…
- **2020-01-31 — Insolvency Commencement…**: Insolvency Commencement…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 61 — Appeals and Appellate Authority](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-61)

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