Whether the application under Section 7 is jointly maintainable against 1st and 2nd Respondents (‘Corporate Debtors’) or not, who have collaborated for a Joint Venture? Held Yes.
The question arises for consideration in this appeal is whether the application under Section 9 is jointly maintainable against 1st and 2nd Respondents (‘Corporate Debtors’) or not?
The ‘Collaboration Agreement’ dated 3rd May, 2013 reached between the ‘Owner of the Land’- ‘AMB Infrabuild Pvt. Ltd.’ and the ‘Developer’- ‘Earth Galleria Pvt. Ltd.’ shows that the ‘Developer’ will sell the flats to the extent of its own shares and the ‘Land Owner’ will sell the developed portion of its own shares. The ‘Land Owner’ have agreed to make it as a ‘Joint Venture Project’ and treated the ‘Joint Venture Project’ for all purpose as evident from Clause 55 of the ‘Collaboration Agreement’ dated 3rd May, 2013 read with Memorandum of Understanding reached between three allottees, the Appellant and the 1st and 2nd Respondents dated 6th February, 2016.
The ‘Developer’- ‘M/s. Earth Galleria Pvt. Ltd.’ having been empowered by ‘M/s. AMB Infrabuild Pvt. Ltd.’- (‘Land Owner’) to advertise the project and for marketing the developed property as a ‘Joint Venture Project’, in terms with the said ‘Collaboration Agreement’ on behalf of the joint venture, if the Memorandum of Understanding dated 20th June, 2014 has been reached between the ‘Earth Infrastructure Ltd.’ and the Appellant- Mrs. Mamtha, the 2nd Respondent cannot take a plea that it is not a signatory to the Memorandum of Understanding dated 20th June, 2014, the 2nd Respondent being represented by ‘Earth Infrastructure Ltd.’ pursuant to the ‘Collaboration Agreement’.
If the two ‘Corporate Debtors’ collaborate and form an independent corporate unit entity for developing the land and allotting the premises to its allottee, the application under Section 7 will be maintainable against both of them jointly and not individually against one or other. In such case, both the ‘Developer’ and the ‘Land Owner’, if they are corporate should be jointly treated to be one for the purpose of initiation of ‘Corporate Insolvency Resolution Process’ against them.