# In the matter of Mr Rajendra K. Bhuta, Resolution Professional (for Guruashish Construction Private Limited) Vs.Maharashtra Housing and Area Development Authority MHADA CA(AT)(Insolvency) 119-2018

> NCLAT judgment dated 2018-12-14. Citation: TCN-2018-NCLAT-00014. This case involves an appeal against an order dated 2nd April, 2018, passed by the…

- **Court:** NCLAT
- **Order date:** 14 Dec 2018
- **Citation:** TCN-2018-NCLAT-00014
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/mr-rajendra-k-bhuta-resolution-professional-for-guruashish-construction-private-a1f77887

## Summary

### Background

This case involves an appeal against an order dated 2nd April, 2018, passed by the Adjudicating Authority (National Company Law Tribunal), Principal Bench, Mumbai. The order rejected the application filed by the Resolution Professional for amendment and refused to apply the provision of Section 14(1)(d) of the Insolvency and Bankruptcy Code (I&B Code) regarding a moratorium on the land belonging to the Maharashtra Housing and Area Development Authority (MHADA). The land was originally owned by Bombay Housing & Area Development Board and later vested in MHADA. A Joint Development Agreement was executed between a society, Guru Ashish Construction Private Limited (Corporate Debtor), and MHADA for construction. The Corporate Debtor defaulted on a loan from Union

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## Facts

The land in question originally belonged to ‘Bombay Housing & Area Development Board', which was vested in the ‘Maharashtra Housing and Area Development Authority' in the year 1966. The land admeasuring 40 acres was allotted in favour of a society on 8th February, 1988. The society entered into an agreement with ‘Guru Ashish Construction Private Limited' ('Corporate Debtor') and a ‘Joint Development Agreement' was executed between the Society, ‘Corporate Debtor’ and ‘Maharashtra Housing and Area Development Authority' on 10th April, 2008 for construction of building by the ‘Corporate Debtor’. The 'Corporate Debtor' had taken Rs. 200 Crores Term Loan Facility from the 'Union Bank of India' on 25th March, 2011. On 20th March, 2017, a suit was filed before the Hon'ble

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## Issues and analysis

### Issue 1: Whether the ‘Moratorium' in terms of Section 14(1)(d) of the Insolvency and Bankruptcy Code, 2016 …

**Ratio:** The ratio is that a moratorium under Section 14(1)(d) of the I&B Code applies to

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**Reasoning:** The court reasoned that the Corporate Debtor did not have ownership rights over the land,

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**Interpretation:** Section 14(1)(d) of the I&B Code is interpreted to protect the assets of

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**Application:** In this case, the Corporate Debtor only had development rights over the land,

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## Parties

- **Judges:** S.J. Mukhop…; Bansi Lal…
- **Appellants:** Rajendra K.…
- **Respondents:** Guruashish…; Maharashtra…

## Timeline

- **1966-01-01 — Land Ves…**: The land in question was vested in the ‘Maharashtra Housing and Area Development…
- **1988-02-08 — Land Allo…**: The land admeasuring 40 acres was…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14(1) — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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