# In the matter of Rashmi Housing Private Limited

> NCLT judgment dated 2023-06-21. Citation: TCN-2023-NCLT-02864. The case involves an Interlocutory Application (I.A. 1342 of 2022) filed by the Resolution…

- **Court:** NCLT
- **Order date:** 21 Jun 2023
- **Citation:** TCN-2023-NCLT-02864
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/rashmi-housing-private-limited-60167ccf

## Summary

### Background

The case involves an Interlocutory Application (I.A. 1342 of 2022) filed by the Resolution Professional (Mr. Om Prakash Agarwal) of Rashmi Housing Private Limited, a Corporate Debtor, seeking directions against the Respondents under Section 74 and Section 60(5) of the Insolvency and Bankruptcy Code. The Resolution Professional sought action against the Suspended Directors for illegal conduct and violations of Section 14 of the Code, declaration of registered agreements with Respondent No. 12 to 90 as null and void, direction to Respondent No. 12 to 90 to execute necessary Deeds of Cancellation, declaration of sale transactions executed post-CIRP as null and void, and direction to Suspended Directors to disclose information about sold flats and handover keys.

## Facts

The Corporate Insolvency Resolution Process (CIRP) was initiated against Rashmi Housing Private Limited on 2018-12-14. The Resolution Professional (RP) filed an application alleging that the Suspended Directors (Respondents 1-3) illegally sold 82 flats during the moratorium period. The RP claimed that 90 registered sale agreements were executed and registered with third parties (Respondents 12-90) without valid authority or approval. The RP also contested that the Suspended Directors granted wrongful occupation of 184 units/flats despite the non-receipt of occupation certificates. The Suspended Directors denied the allegations, claiming that the sales were conducted on the instructions of the RP's staff and that the proceeds were deposited in the Corporate Debtor's

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## Issues and analysis

### Issue 1: Whether the flats sold by the Respondent nos. 1-3 more fully described in the list annexed by the …

**Ratio:** Section 14 of the Insolvency and Bankruptcy Code (IBC) imposes a moratorium that

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**Reasoning:** The NCLT reasoned that the sale transactions occurred during the CIRP period, violating

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**Interpretation:** Section 14 is interpreted strictly to prevent any actions that could diminish

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**Application:** The NCLT applied the ratio to the facts by concluding that the sale of 82 flats

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## Parties

- **Judges:** H.V. Subb…; Madhu S…
- **Appellants:** Om Prakash…
- **Respondents:** Rashmi Housing…; Vistra ITCL…

## Timeline

- **2018-12-14 — CIRP Init…**: Company Petition bearing no. 3119 of 2018 was admitted, commencing the CIRP period for…
- **2020-09-14 — Email from RP to…**: The Resolution Professional issued an email to the Suspended Directors seeking…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 74 — Punishment for contravention of moratorium or the…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-74)

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