Kerala High Court
Jaju Babu vs National Company Law Tribunal on 17 July, 2025
Author: T.R.Ravi
Bench: T.R.Ravi
W.P.(C)No.15670 of 2024
2025:KER:52039
1
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE T.R.RAVI
THURSDAY, THE 17TH DAY OF JULY 2025 / 26TH ASHADHA, 1947
WP(C) NO. 15670 OF 2024
PETITIONER:
JAJU BABU
AGED 66 YEARS
MAKAM, ST ALBERTS HIGH SCHOOL LANE, BANERJEE ROAD,
ERNAKULAM, PIN - 682035
BY ADV SHRI.TERRY V.JAMES
SRI P.B.KRISHNAN (SR.ADVOCATE)
RESPONDENTS:
1 NATIONAL COMPANY LAW TRIBUNAL
KOCHI BENCH GROUND FLOOR, COMPANY LAW BHAVAN BMC
ROAD, THRIKKAKARA P.S. KAKKANAD, KOCHI, KERALA REP
BY DEPUTY REGISTRAR, PIN - 682021
2 PHOENIX ARC PRIVATE LIMITED
5TH FLOOR, DANI CORPORATE PARK, 158, CST ROAD,
KALINA, SANTACRUZ (E), MUMBAI REPRESENTED BY ITS
AUTHORISED SIGNATORY MR. HARSH MAGIA, PIN - 400098
3 MR. JOSSY STEPHEN KATTUR
RESOLUTION PROFESSIONAL OF KERALA CHAMBER OF
COMMERCE & INDUSTRY BARONS 16C, SKYLINE IMPERIAL
GARDENS, KALOOR, ERNAKULAM, PIN - 682025
4 M/S. DAVIDROOTS LLP
REPRESENTED BY ITS MANAGING PARTNER MR. ARUN DAVID
3XXI/185 G, DAVIDS ARCADE, BYPASS JUNCTION, A.M.
ROAD, THANKALAM. KOTHAMAGALAM, KERALA, PIN - 686691
W.P.(C)No.15670 of 2024
2025:KER:52039
2
5 MS. ANNAMMA CHERIYAN
FLAT NO.44, ASHOKA APARTMENTS, SHANMUGHAM ROAD,
ERNAKULAM, PIN - 682031
6 DR. THOMAS MATTATHIL
MATTATHIL HOUSE KIZHAPARAYAR P.O., POOVARARANI
VILLAGE, KOTTAYARN DISTRICT, PIN - 686578
BY ADVS.
SHRI.SURESH DUTT DOBHAL
SHRI.AKHIL SURESH
SHRI.SHIKHAR KUMAR
SHRI.NIDHI SAM JOHNS
SHRI.HARIKUMAR G. (GOPINATHAN NAIR)
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON
10.04.2025, THE COURT ON 17.07.2025 DELIVERED THE FOLLOWING:
W.P.(C)No.15670 of 2024
2025:KER:52039
3
T.R. RAVI, J.
--------------------------------------------
W.P.(C)No.15670 of 2024
--------------------------------------------
Dated this the 17th day of July, 2025
JUDGMENT
The prayer in this writ petition is to quash Ext. P5 final order
passed by the 1st respondent, and to issue consequential
directions. By Ext.P5, the 1st respondent has directed the 3 rd
respondent, the Resolution Professional, to reject the claim filed by
the home buyers, including the petitioner and thus allowed the
interlocutory application filed by the 2 nd respondent in
IA/310/KOB/2023 in CP(IBC)/33/KOB/2021.
2. The petitioner is an allottee/homebuyer in Kerala Trade
Centre at Marine Drive, Cochin. He had entered into an agreement
for sale and construction with the corporate debtor. The corporate
debtor in their capacity as the builder and the landowner
M/s.Cherupushpam Films Pvt. Ltd., entered into an agreement on
8.12.2003, to construct a building named Kerala Trade Centre at
Marine Drive, Cochin on a land having an extent of 43.35 Ares.
2025:KER:52039
Loans were availed for the construction from the South Indian
Bank, Ernakulam. Sale deeds were executed by the landowners in
favour of the petitioner and respondents Nos. 4, 5 and 6. The bank
had charge over the property when the sale deeds were executed,
though the same were not reflected in the encumbrance
certificates.
3. The 2nd respondent as the financial creditor, filed a
petition before the first respondent on 10.10.2022, seeking to
initiate proceedings against the corporate debtor. All creditors,
including the petitioner, filed their claims before the Resolution
Professional, and the same were adjudicated by him as per law. In
the first CoC meeting, it was agreed that the petitioner, as well as
other similarly placed creditors, were to be included in the CoC.
Consequently, they were made members of the CoC. The 2nd
respondent is also a member of the CoC.
4. The 2nd respondent filed IA(IB)/3010/KOB/2023 in
CP/IBC/33/KOB/2021 praying for a rejection of the claim of the
home buyers/space buyers/respondents 2 to 5, who already had
registered allotments in their favour, and to reconstitute the CoC
with valid voting share proportionate to the claim amounts and to
2025:KER:52039
stay all further proceedings of the CoC till the reconstitution of a
valid CoC with valid voting share proportionate to the claim
amount. Ext.P1 is a copy of the petition. According to the 2 nd
respondent, the 3rd respondent Resolution Professional, had,
wrongly admitted the claims of various home buyers who already
are title holders of the property, based on the registered sale
deeds executed in their favour, and made the petitioner and
respondents 4 to 6 as members of the CoC with decisive voting
rights.
5. The petitioners and others filed their objections to
Ext.P1, a copy of which has been produced as Ext.P2. The
Resolution Professional had also filed a counter-affidavit, a copy of
which has been produced as Ext.P3. The 1 st respondent heard the
application and reserved the case for orders on 28.2.2024. This
fact is evident from Ext.P4 daily order issued by the 1 st
respondent.
6. After the case was taken for orders, the 2 nd respondent
filed an affidavit on 8.3.2024 before the 1 st respondent agreeing
"not to enforce its charge/mortgage rights on the units/flats
purchased by the petitioner and respondents 4 to 6 from the
2025:KER:52039
corporate debtor/Kerala Chamber of Commerce and Industries
subject to the condition that the petitioners and respondents 4 to 6
are not treated as financial creditors and do not remain as
members of the CoC so that the 2nd respondent being a financial
creditor will get its actual representation/voting right in all the
future/forthcoming meetings of the CoC." On 09.05.2024, the 1 st
respondent, taking note of the above affidavit dated 8.3.2024,
passed a final order directing the Resolution Professional to reject
the claim of the home buyers/petitioners and respondents 4 to 6
and to reconstitute the CoC with valid representations/voting share
proportionate to their claim amounts. The case of the petitioner is
that the orders have been issued based on an affidavit filed after
the hearing was over, and without granting an opportunity to the
petitioner to make his submissions on the affidavit. Ext.P5 is the
final order dated 9.4.2024 issued by the 1 st respondent.
7. The 2nd respondent has filed a counter affidavit. It is
contended that the petitioner has an efficacious remedy of appeal
under Section 61 of the Insolvency and Bankruptcy Code, 2016
('IBC 2016' for short), and hence is not entitled to maintain this
writ petition. It is contended that the allottees in whose favour
2025:KER:52039
registered title deeds have already been executed can no longer be
members of the CoC since their properties do not form part of the
assets of the corporate debtor anymore, and claims of such
allottees against the corporate debtors stood satisfied on receiving
due title and possession. According to the 2 nd respondent, such
rights were included in the CoC illegally. It is further submitted
that the 2nd respondent does not intend to take any action against
people like the petitioner, provided they also do not remain as
members of the CoC. It is contended that IBC 2016 is a complete
Code in itself, and in view of the decision of the Apex Court, no
writ petition can be maintained against the order of the 1 st
respondent. The details of the amounts owed to the 2 nd
respondent have also been narrated in the counter affidavit. It is
also stated that even though the affidavit was filed, no counter
affidavit was filed for more than a month, despite the copy of the
same being served on the petitioner. It is also submitted that the
affidavit only reiterates what had already been stated before the
1st respondent and does not contain any additional material.
8. Heard Sri P.B.Krishnan, Senior Advocate, instructed by
Sri Terry V. James for the petitioner, Sri Suresh Dutt Dobhal, for
2025:KER:52039
the 1st respondent and Sri Harikumar G., for the 2 nd
respondent.
9. In Innoventive Industries Limited v. ICICI Bank &
Anr. [(2018) 1 SCC 407], the Hon'ble Supreme Court has held
that the IBC 2016 is a complete Code in itself. It was held that
one of the important objectives of the Code is to bring the
insolvency law in India under a single unified umbrella with the
object of speeding up the insolvency process. According to the
counsel for the 2nd respondent, the petitioner has not given any
explanation as to why an appeal is not being preferred as provided
under the Code. In Phoenix ARC Private Ltd. v. Vishwa
Bharati Vidya Mandir & Ors. [(2022) 5 SCC 345], the Hon'ble
Supreme Court considered the maintainability of a writ petition
under Article 226 in a matter arising under the SARFAESI Act. The
Hon'ble Supreme Court held that the High Court had erred in
entertaining a writ petition in a matter relating to the SARFAESI
Act when there is a statutory remedy available under Section 17 of
the SARFAESI Act. The appellant before the Hon'ble Supreme
Court is the 2nd respondent herein.
10. In Swiss Ribbons Pvt. Ltd. & Anr. v. Union of India
2025:KER:52039
& Ors. [(2019) 4 SCC 17] and Ghanashyam Mishra and Sons
Private Limited v. Edelweiss Asset Reconstruction Company
[2021 SCC OnLIne SC 313], the Hon'ble Supreme Court held
that the IBC 2016 being a self-contained Code, the High Courts
should refrain from interfering with the resolution process.
11. This Court had considered the question of
maintainability in Tharakan Web Innovations Pvt. Ltd. (M/s.)
& Anr. v. National Company Law Tribunal, Kakkanad & Ors.
[2022 SCC OnLine Ker 498] and held that the availability of an
alternate remedy will not be a reason for not exercising jurisdiction
when there is a violation of principles of natural justice or where
the proceedings challenged are without jurisdiction. In the case at
hand, admittedly, the final hearing on the petition was over, and
the case was taken for orders on 28.2.2024. A reading of Ext.P5
would show that the order has been rendered based on the
affidavit filed on 8.3.2024, the details of which have been
extracted in paragraph 24 of the order. It is also evident from
paragraph 27 of the order that the Tribunal has taken the affidavit
on record and issued the directions for removing respondents 2 to
5, who were the home buyers/space buyers, from the CoC. It can
2025:KER:52039
be seen from the minutes of the first CoC meeting produced along
with Ext.P3 counter affidavit, that the financial creditor confirmed
that the claims of home buyers who have already registered sale
deeds without NOC from the secured financial creditors can also be
treated as financial creditors. The claim of persons like the
petitioner was accepted in 2022 in the presence of the secured
creditor, and that is the reason why the petitioner is challenging
his removal from the CoC. A copy of the affidavit that has been
produced as Ext.R2(h) specifically says that they would not
enforce their claim against persons like the petitioner on condition
that they are not treated as financial creditors and do not remain
as members of the CoC.
12. It is evident from the admitted facts that the 1 st
respondent has accepted and recorded the affidavit which was filed
after the hearing, and the order itself has been issued relying on
the contents of the said affidavit. Since the petition was a
contested one and had been argued and taken for orders, the 1 st
respondent ought to have heard the petitioner and similarly
situated persons on the contents of the affidavit. This is all the
more so since the prayer in the application was virtually to review
2025:KER:52039
the earlier decision of the CoC to include the petitioner and other
holders of registered sale deeds as financial creditors on the
admission of the senior creditor. Since it is an order passed in
violation of the principles of natural justice, it is only appropriate
that the same is set aside and the matter is remanded back to the
1st respondent for passing orders after hearing the petitioner and
other similarly situated persons on the contents of the affidavit
and on the proposal to record the same and pass orders.
13. The writ petition is allowed. Ext.P5 is set aside. The 1 st
respondent is directed to pass fresh orders, after hearing the
petitioner on the contents of the affidavit filed by the 2 nd
respondent, after the matter was taken for orders earlier. The
period from 11.04.2024 to the date of this judgment shall stand
excluded from the time fixed for completion of the resolution
process.
Sd/-
T.R.RAVI
JUDGE
dsn
2025:KER:52039
APPENDIX OF WP(C) 15670/2024
PETITIONER EXHIBITS
EXHIBIT P1 A TRUE COPY OF IA(IB)/310/KOB/2023 FILED
BY THE 1ST RESPONDENT IN
CP/IBC/33/KOB/2021
EXHIBIT P2 A TRUE COPY OF THE REPLY FIELD BY THE 2
TO 5TH RESPONDENT
EXHIBIT P3 TRUE COPY OF THE COUNTER AFFIDAVIT FILED
BY THE 3RD RESPONDENT
EXHIBIT P4 TRUE COPY OF THE DAILY ORDER IN
IA(IB)/310/KOB/2023 DATED 28.02.2024
EXHIBIT P5 TRUE COPY OF THE FINAL ORDER DATED
09.04.2024
RESPONDENT EXHIBITS
EXHIBIT R2(A) TRUE COPY OF THE BOARD RESOLUTION DATED
22.03.2024, IN FAVOUR OF MR. HARSH MAGIA
EXHIBIT R2(B) TRUE COPY OF EMAIL DATED 28.04.2023, SENT
BY PHOENIX ARC TO THE RESOLUTION
PROFESSIONAL
EXHIBIT R2(C) RUE COPY OF REPLY EMAIL DATED 30.04.2023,
SENT BY RESOLUTION PROFESSIONAL TO
PHOENIX ARC
EXHIBIT R2(D) TRUE COPY OF APPLICATION BEARING I.A. NO.
310/2023, FILED BY PHOENIX ARC PVT LTD
EXHIBIT R2(E) TRUE COPY OF REPLY FILED BY RESOLUTION
PROFESSIONAL TO THE APPLICATION BEARING
I.A. NO. 310/2023 FILED BY PHOENIX ARC
BEFORE NCLT, KOCHI
EXHIBIT R2(F) TRUE COPY OF REPLY FILED BY ALLOTTEES
(INCLUDING PETITIONER) WITH REGISTERED
TITLE DEEDS TO APPLICATION BEARING I.A.
NO. 310/2023, FILED BY PHOENIX ARC
EXHIBIT R2(G) TRUE COPY OF ORDER DATED 28.02.2024,
PASSED IN IA NO. 310/2023, BY LEARNED
NCLT
EXHIBIT R2(H) TRUE COPY OF AFFIDAVIT DATED 06.03.2024,
FILED BY PHOENIX ARC BEFORE LEARNED NCLT
IN I.A. NO. 310/2023, ALONG WITH PROOF OF
SERVICE UPON PETITIONER AND OTHER
2025:KER:52039
ALLOTTEES
EXHIBIT R2(I) TRUE COPY OF PROOF OF FILING THE
AFFIDAVIT DATED 06.03.2024, IN IA NO.
310/2023, BEFORE NCLT
EXHIBIT R2(J) TRUE COPY OF WRITTEN SUBMISSIONS ALONG
WITH AFFIDAVIT DATED 06.03.2024, FILED BY
PHOENIX ARC IN IA NO. 310/2023, BEFORE
LEARNED NCLT
EXHIBIT R2(K) TRUE COPY OF ORDER DATED 09.04.2024,
PASSED IN IA NO. 310/2023, BY NCLT
EXHIBIT R2(L) TRUE COPY OF EMAIL DATED 20.06.2024,
ISSUED BY PHOENIX ARC TO RESOLUTION
PROFESSIONAL
EXHIBIT R2(M) TRUE COPY OF EMAIL DATED 21.06.2024, SENT
BY RESOLUTION PROFESSIONAL TO PHOENIX ARC
EXHIBIT R2(N) TRUE COPY OF EMAIL DATED 22.06.2024,
ISSUED BY PHOENIX ARC TO RESOLUTION
PROFESSIONAL
