# M/s Sequel Buildcon Pvt. Ltd v. State of U.P. & Anr

- **Citation:** (2025) 2 ILRA 561
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2025-02-24
- **Case number:** Writ C No. 21238 of 2024
- **Bench:** Mahesh Chandra Tripathi, Prashant Kumar
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-sequel-buildcon-pvt-ltd-v-state-of-u-p-anr-53011
- **Pages:** 52

## Headnote

C.S.C., Sri Kaushalendra Nath Singh, Ms.
Anjali Gokhlani, Sri Manish Goyal (Sr.
Advocate)

(A)
Constitutional
Law
-
Corporate
Insolvency & Fraud - Urban Planning and
Development / Real Estate - Insolvency
and Bankruptcy - Revalidation of Map -
Insolvency Resolution Process (IRP) -
Corporate Insolvency Resolution Process
(CIRP) - Constitution of India,1950 -
Article 254 - Insolvency and Bankruptcy
Code, 2016 - Sections 7, 14, 29A , 65 &
238 - The Insolvency and Bankruptcy
(Amendment), 2018 ,U.P. Industrial Area
Development Act, 1976 - The Prevention
of Money Laundering Act, 2002 - Sub-
562 INDIAN LAW REPORTS ALLAHABAD SERIES
Clause (p), (u), (v), (y) and (za) of Clause
2 of Chapter I - Doctrine of Repugnancy -
Moratorium - Reverse CIRP as Abuse of
Process
-
Fraudulent
Insolvency
-
Integrated Project Obligations - Public
Interest & Fraud Prevention - Consortium
Liability - Doctrine of Piercing Corporate
Veil - In the event of a conflict between
the Union law and a State law in
concurrent field, the former prevails over
the latter - Orders of NCLT/NCLAT passed
under IBC, 2016 override decisions of
State Authorities under U.P. Industrial
Area Development Act - Reverse CIRP
cannot be invoked to bypass liabilities in
cases of fraudulent insolvency engineered
to evade dues and obligations under an
integrated project. (Para - 45 to 49, 120 to
123 ,136 )

NOIDA launched a Sports City Scheme in 2011 -
Petitioner, a consortium member, was allotted
land - Sub-divisions and lease deeds were
executed - After failure to deliver the project,
homebuyers filed insolvency against petitioner -
Reverse CIRP was initiated under NCLT/NCLAT
orders - IRP and stakeholders sought map
revalidation from NOIDA - which was refused
citing Board resolutions and CAG report -
petition was filed challenging the refusal. (Para
- 2 to 28)

HELD: - Orders passed by the NCLT and NCLAT
have to be complied with and Noida Authority
cannot raise any objection or create any
hindrance
in
compliance
of
the
order.

Reverse CIRP is inapplicable in cases of
fraudulent insolvency designed to evade dues
and project obligations. Corporate veil of the
companies pushed into insolvency can be lifted
to prosecute the directors for committing fraud
for syphoning funds and neglecting integrated
project duties. NOIDA's refusal to revalidate
maps is justified given the fraud and CAG
findings. (Para -50,120 to 123 ,136)

Petition disposed of. (E-7)

List of Cases cited:

## Text

_Characters 0–39,966 of 142,885. This is a partial read: ask again with offset=39966 for what follows._

2 All. M/s Sequel Buildcon Pvt. Ltd. Vs. State of U.P.& Anr.
561
into keeping in view the object of the
State's policy to promote industries in the
State so as to increase the opportunities of
employment and attract inflow of foreign
currency to the State.

88. The impugned order has been
passed by the U. P. Pollution Control Board
in disregard to the State's policy to promote
industries in the State so as to increase the
opportunities of employment and attract
inflow of foreign currency to the State. It
has been passed in utter disregard to the
Memorandum of Understanding dated
22.02.2018 entered into by the Hon'ble
Governor of the State agreeing to facilitate
the establishment of the industry.

89.
In
view
of
the
foregoing
discussion, we are of the considered view
that the impugned order dated 14.11.2024
passed by the Chief Environment Officer,
U.
P.
Pollution
Control
Board
is
unsustainable in law.

90. Accordingly, the Writ Petition is
allowed.
The
impugned
order
dated
14.11.2024
passed
by
the
Chief
Environment Officer, U. P. Pollution
Control Board cancelling the Consolidated
Consent to Operate and Authorisation
issued to the petitioner on 23.08.2024 for
running an animal slaughter house, is
quashed. The opposite parties are directed
to permit the petitioner to operate the
modern
animal
slaughter
house
in
furtherance of the Consolidated Consent to
Operate
and
Authorisation
dated
23.08.2024 and to facilitate it in operating
the industry keeping in view the State's
policy to promote industries in the State so
as
to
increase
the
opportunities
of
employment and attract inflow of foreign
currency to the State as well as the
Memorandum of Understanding dated
22.02.2018 entered between the Hon'ble
Governor of the State and the petitioner
assuring that the Governor would facilitate
the petitioner to establish the project in a
time bound manner.

91. The parties would bear their own
costs of litigation.
----------
(2025) 2 ILRA 561
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 24.02.2025

BEFORE

THE HON'BLE MAHESH CHANDRA
TRIPATHI, J.
THE HON'BLE PRASHANT KUMAR, J.

Writ C No. 21238 of 2024

M/s Sequel Buildcon Pvt. Ltd. ...Petitioner
Versus
State of U.P. & Anr. ...Respondents

Counsel for the Petitioner:
Sri Gaurang Kulshreshtha, Sri Rohan Gupta,
Sri Shikhar Kaushal, Sri Anuj Chauhan, Sri
Anil Tiwari (Sr. Advocate)

Counsel for the Respondents:
C.S.C., Sri Kaushalendra Nath Singh, Ms.
Anjali Gokhlani, Sri Manish Goyal (Sr.
Advocate)

(A)
Constitutional
Law
-
Corporate
Insolvency & Fraud - Urban Planning and
Development / Real Estate - Insolvency
and Bankruptcy - Revalidation of Map -
Insolvency Resolution Process (IRP) -
Corporate Insolvency Resolution Process
(CIRP) - Constitution of India,1950 -
Article 254 - Insolvency and Bankruptcy
Code, 2016 - Sections 7, 14, 29A , 65 &
238 - The Insolvency and Bankruptcy
(Amendment), 2018 ,U.P. Industrial Area
Development Act, 1976 - The Prevention
of Money Laundering Act, 2002 - Sub-
562 INDIAN LAW REPORTS ALLAHABAD SERIES
Clause (p), (u), (v), (y) and (za) of Clause
2 of Chapter I - Doctrine of Repugnancy -
Moratorium - Reverse CIRP as Abuse of
Process
-
Fraudulent
Insolvency
-
Integrated Project Obligations - Public
Interest & Fraud Prevention - Consortium
Liability - Doctrine of Piercing Corporate
Veil - In the event of a conflict between
the Union law and a State law in
concurrent field, the former prevails over
the latter - Orders of NCLT/NCLAT passed
under IBC, 2016 override decisions of
State Authorities under U.P. Industrial
Area Development Act - Reverse CIRP
cannot be invoked to bypass liabilities in
cases of fraudulent insolvency engineered
to evade dues and obligations under an
integrated project. (Para - 45 to 49, 120 to
123 ,136 )

NOIDA launched a Sports City Scheme in 2011 -
Petitioner, a consortium member, was allotted
land - Sub-divisions and lease deeds were
executed - After failure to deliver the project,
homebuyers filed insolvency against petitioner -
Reverse CIRP was initiated under NCLT/NCLAT
orders - IRP and stakeholders sought map
revalidation from NOIDA - which was refused
citing Board resolutions and CAG report -
petition was filed challenging the refusal. (Para
- 2 to 28)

HELD: - Orders passed by the NCLT and NCLAT
have to be complied with and Noida Authority
cannot raise any objection or create any
hindrance
in
compliance
of
the
order.

Reverse CIRP is inapplicable in cases of
fraudulent insolvency designed to evade dues
and project obligations. Corporate veil of the
companies pushed into insolvency can be lifted
to prosecute the directors for committing fraud
for syphoning funds and neglecting integrated
project duties. NOIDA's refusal to revalidate
maps is justified given the fraud and CAG
findings. (Para -50,120 to 123 ,136)

Petition disposed of. (E-7)

List of Cases cited:

1. M.C. Mehta Vs Kamalnath, (1997) 1 SCC 388
2. M.I. Builders Vs Radheyshyam Sahu, 1999 (6)
SCC 464
3. Rajiv Suri Vs D.D.A., (2022) 11 SCC 1
4. R.N.R. Ltd. Vs R.I. Ltd., 2010 (7) SCC 1
5. Center for P.I.L. Vs U.O.I., 2012 (3) SCC 1
6. Manmohan Lal Chaddha Vs U.O.I., 2014 (9)
SCC 516
7. C.I.T. Vs Monnet Ispat & Energy Ltd., SLP
No. 6483-2018 & ors.
8. Innoventive Industries Ltd. Vs ICICI Bank &
anr.,(2018) 1 SCC 407
9. M/s E.P.D. Pvt. Ltd. Vs St. of Karn. & ors.,
2019 SCC Online SC 1542
10. P.U.L.I. Ltd. & anr. Vs U.O.I. & ors., (2019)
8 SCC 416
11. Nand Kishore Gupta & ors. Vs St. of U.P. &
ors., 2010 (1) SCC 282
12. St. of U.P. & ors. Vs Renusagar Power Co. &
ors., 1988 (4) SCC 59
13. D.D.A. Vs Skipper Construction Co. & anr.,
1996 (4) SCC 622
14. Shubhra Mukherjee Vs B.C.C.L., 2000 (3)
SCC 312
15. St. of Raj. Vs G.L.K.U. Pvt. Ltd. & anr., 2016
(4) SCC 469
16. I.I.T. Ltd. Vs Motorola Incorporated & ors.,
2011 (1) SCC 74
17. Asia Foundations & Constructions Ltd. Vs St.
of Guj. & anr., 1985 SCC Online Guj 93
18. Hytone Merchants Pvt. Ltd. Vs Satabadi
Investment Consultants Pvt. Ltd., Company
Appeal (AT) (Insolvency) No. 258 of 2021
19. V.I.P. Ltd. Vs Axis Bank Ltd., (2022) 8 SCC
352
20. Raster Images Pvt. Ltd. Vs St. of U.P., 2023
SCC Online 3594
21. Bikram Chatterji & ors. Vs U.O.I. &
ors.,(2019) 19 SCC 161
22. Ghanashyam Mishra & Sons Pvt. Ltd. Vs
E.A.R. Co. Ltd. & ors., (2021) 9 SCC 657
2 All. M/s Sequel Buildcon Pvt. Ltd. Vs. State of U.P.& Anr.
563
23. Flat Buyers Association Winter Hills Vs
Umang Realtech Pvt. Ltd., 2020 SCC Online
NCLAT 1199
24. Salomon Vs Salomon & Co. Ltd., 1897 AC
22:(1895-99) AII ER
25. Littlewoods Stores Vs I.R.C., 1969 (1) WLR
1241
26. St. of U.P. Vs Renusagar Power Co., (1988)
4 SCC 59
27. St. of Raj. & ors. Vs G.L.S.K.U. Pvt. Ltd. &
anr,(2016) 4 SCC 469
28. Subhra Mukharjee & anr. Vs B.C.C.L. &
anr.,(2003) 3 SCC 312
29. Calcutta Chromotype Ltd. Vs Collector of
Central Excise Kolkata, AIR 1998 SC 1631
30. New Horizon Ltd. & anr. Vs U.O.I. & ors.,
1995 (1) SCC 478
31. C.I.T. Vs Meenakshi Mills Ltd. Madura, AIR
1967 SC 819
32. Telco & Ors Vs St. of Bihar, AIR 1965 SC 40
33. Juggi Lal Kamlapat Vs C.I.T., U.P., AIR 1969
SC 932
34. Arcelor Mittal India Pvt. Ltd. Vs Satish
Kumar Gupta & ors., 2019 (2) SCC 1
35. D.D. A. Vs Skipper Construction Company
(P) Ltd. & anr., 1996 (4) SCC 622
36. Udgar Gagan Properties Ltd. Vs Sant Singh
& ors., 2016 (11) SCC 378
37. Madhukar Sadbha Shivarkar (D) by Lrs. Vs
St. of Maha. & ors., 2015 (6) SCC 557
38. M/s E.P.D. Pvt. Ltd Vs St. of Karn. & ors.,
(2020) 13 SCC 308
39. Noida Toll Bridge Company Ltd. Vs
F.N.R.W.A. & ors., Civil Appeal No0...../2024 [
SLP(C) No. 33403/2016
40. Jaypee Orchard Resident Welfare Society Vs
U.O.I. & ors., Writ Petition (Civil) No.854/2017
41. Chitra Sharma Vs U.O.I., 2018 (18) SCC 575
42. Pioneer Urban Land & Infrastructure Vs
U.O.I., 2019 (8) SCC416
43. M/s Innoventive Industries Ltd Vs ICICI
Bank, (2018) 1 SCC 407
44. Ghanshyam Mishra & sons Pvt. Ltd. Vs
E.A.R. Co. Ltd. , 2021 (9) SCC 657
45. Rattan Chand Hira Chand Vs Askar Nawaz
Jung, (1991) 3 SCC 67
(Delivered by Hon'ble Mahesh Chandra
Tripathi, J.
&
Hon'ble Prashant Kumar, J.)

TABLE OF CONTENTS
S.No.
HEADING
Page nos.
1
Facts of the case
02-14
2
Arguments on behalf of
petitioner
14-20
3
Arguments on behalf of
respondents
21-28
4
Insolvency proceeding
28-29
5
Reverse CIRP is not
applicable & Piercing of
Corporate Veil
29-31
6
Reverse piercing of
Corporate Veil
32-33
7
Non-development of the
sports facilities
34
8
Interest of Homebuyers
34-35
9
Notices for payment of
instalments
35
10
Change in shareholding of
various companies
35-40
11
Rejoinder arguments on
behalf of the petitioner
41-43
12
Analysis by the Court
43
13
A. Scheme-2010-2011 for
development of Sports City
in NOIDA
43-44
14
B.Allotment to a Consortium
& Sub-division
44-47
15
C. Insolvency
47-48
564 INDIAN LAW REPORTS ALLAHABAD SERIES
16
D. Reverse Insolvency
48-50
17
E. Lifting of Corporate Veil
50-54
18
F. Implementation of
Prevention of Money
Laundering Act
54-55
19
G. Fraud
56-58
20
H. Doctrine of Public Trust
58-59
21
I. Connivance
59-62
22
J. Interest of the Homebuyers 62-64
23
K. High Court's interference 66
24
L. Conclusion
66-67
25
M. Effect on Consortium
when a Member of the
Consortium goes into
insolvency
68-69

1. Heard Sri Anil Tiwari, learned
Senior Counsel assisted by Sri Shikhar
Kaushal and Sri Anuj Chauhan, learned
counsel for the petitioner, Sri M.C.
Chaturvedi, learned Additional Advocate
General assisted by Sri Devesh Vikram,
learned Additional Chief Standing Counsel
and
Sri
Mohan
Srivastava,
learned
Standing Counsel for the State-respondent
no.1 and Sri Manish Goyal, learned Senior
Counsel assisted by Sri Kaushalendra Nath
Singh and Ms. Anjali Gokhlani, learned
counsel for respondent no.2.

FACTS OF THE CASE

2. New Okhla Industrial Development
Authority1 sometime in the year 2011
floated a scheme known as "Sports City-II"
which was to be developed in Sectors 78,
79 and 150 of NOIDA. The scheme was
launched on 03.03.2011 and closed on
24.03.2011. As per the scheme, a Sports
City was to be developed on a land parcel
of 72.75 hec. in Sector 78, 79 and another
80 hec. in Sector 150 of NOIDA. The
reserve price for the scheme was set at
Rs.11,500/- per square metre. The price
was purposely kept low as the developer
was supposed to create sports facilities over
70% of the entire land allotted to them,
which was not marketable, and on top of it,
the developer had to spend his funds to
develop the same. In the remaining 30% of
the land, 28% was meant for Group
Housing and 2% for commercial purpose.
The
scheme
clearly
stated
that
the
population density in this Sports City
would be 1650 per hectare. In this scheme,
maximum permissible Floor Area Ratio2 of
the total land was 1.5. The open/green area
of the recreational component (i.e. sports
activities such as Golf course, stadium etc.
and open spaces) was to be considered as
open green areas for the entire land.

3. In response to aforesaid scheme,
only two companies applied for the
allotment of Sports City, first being M/s
Wave Pvt. Ltd., which had applied at the
reserved price and the second was a
consortium of companies led by M/s
Xanadu Estates Pvt. Ltd. (Lead Member)
along with 8 other companies being the
Relevant Members. The bid of the
consortium of M/s Xanadu Estates Pvt. Ltd.
was found to be the most compliant for the
development of the sports city, and hence,
the project was allotted to them. The
NOIDA Authority issued an Acceptance
Letter on 28.03.2011 and informed the
Lead
Member
about
the
allotment.
Thereafter, Noida Authority issued an
Allotment-cum-Reservation Letter dated
04.05.2011 and called upon the Consortium
to
deposit
the
allotment
money
of
Rs.35,76,01,125/- within 60 days, failing
which action as per terms and conditions of
the brochure shall be taken. In the
allotment letter, it was informed to the
2 All. M/s Sequel Buildcon Pvt. Ltd. Vs. State of U.P.& Anr.
565
Consortium
that
total
land
parcel
admeasuring 7,27,500 sqm. in Plot No.SC01-01, Sector 78 & 79, NOIDA was
reserved in favour of the Consortium as per
the terms and conditions mentioned in the
brochure of the Scheme.

4. Vide letter dated 11.10.2011, the
Consortium requested the authorities to
make sub division of the allotted plot in
favour of the Consortium members, who
have together applied as a Consortium. The
request of the Consortium was accepted by
the Noida Authority on 24.10.2011 and the
entire sports city project was divided into
six parts. The relevant part of the
acceptance letter was as under:-

"With reference to your letter
dated 11th October, 2011 on the above
subject, I have been directed to inform you
that in view of the terms and conditions of
the brochures of the scheme, your request
has been accepted by the competent
authority to sub-divide the aforesaid plot in
six (6) parts in the following manner;

Sub division of the plot No.SC-01
Sector-79 in 5 parts & Plot No.SC-01
Sector-78, which is the part allotted area
total 712981.00 sqmts. of plot no.SC-01
Sector-79 Noida i.e.

(1)
SC-01/A
admeasuring
71,00,000 Sqm.

(2) SC-01/B admeasuring 48,000
Sqm.

(3)
SC-01/C
admeasuring
2,50,027 Sqm.

(4)
SC-01/D
admeasuring
1,00,000 Sqm. And

(5) SC-01/E admeasuring 80,000
Sqm. (total 5,78,027.50 Sqm.)

(6) SC-01 Sector-78 14,272.50
Sqm. which is the part allotted area total
14,519.00 sqmts of plot no.SC-01 Sector -
78 Noida.

Simultaneously in view of the
terms and conditions of the brochures of
the Scheme, the SPC for Plot No.SC-01/C
Sector-79 measuring 2,50,0207.50 Sqm.
namely M/s Three C Green Developers Pvt.
Ltd. consisting of consortium member (1)
M/s Xanadu Estates Pvt. Ltd. - 62.5%, (2)
M/s Meriton Infotech Pvt. Ltd. - 18.50%,
(3) M/s Sutlej Agro Products Ltd. - 9.5%
(4) M/s Xanadu Infra Developers Pvt. Ltd. -
9.50%-2,50,027.50 Sqm., is approved for
execution of lease deeds.

Execution of lease deeds of
sub divided plot No.SC-01/A Sector79 in favour of relevant member
namely M/s Sequel Building Concepts
Pvt. Ltd. - 48,000 Sqm is approved.

Execution of lease deeds of
sub divided plot No.SC-01/B Sector79 in favour of relevant member
namely
M/s
Sequel
Building
Concepts Pvt. Ltd. - 48,000 Sqm. is
approved.

Execution of lease deeds of
sub divided plot No.SC-01/D Sector -
79 in the name of relevant member
M/s Kindle Developers Pvt. Ltd. -
1,00,000 Sqm. is approved.

Execution of lease deeds of
sub divided plot No.SC-01/E Sector -
79 in the name of relevant member
M/s Xanadu Realcon Pvt. Ltd. -
80,000 Sqm. is approved.

Execution of lease deeds of sub
divided plot No.SC-01 Sector - 79 in the
name of relevant member M/s Xanadu
Infratech Pvt. Ltd. - 14,272.50 Sqm. Which
is the part allotted area total 14519.00
sqmts of plot no.SC-01 Sector 78 Noida is
approved"
566 INDIAN LAW REPORTS ALLAHABAD SERIES

5. Thereafter, separate lease deeds
were executed between Noida Authority
and different members of the Consortium.
Accordingly, the Noida Authority executed
a lease deed in favour of M/s Sequel
Buildcon Pvt. Ltd.3 in respect of SC-01/A
Sector-79 admeasuring 1,00,000 sqr. mtrs.
of land for development of Group Housing
project under the Sports City Scheme on
24.10.2011. The NOIDA Authority had
also issued a possession certificate on
11.11.2011 in favour of the petitioner
company.

6. The petitioner company again
requested NOIDA Authority to further subdivide the plot of the petitioner company
into two parts of 50,000 square metre each,
plot no.SC-01/A1, was retained by the
petitioner company and plot no.SC-02/A2
was allotted to M/s Arena Super Structure
Pvt. Ltd., which is the 100% subsidiary of
the petitioner company. Accordingly, fresh
sub leases were executed by the authority
for those two companies admeasuring
50,000 square metre each.

7. The NOIDA Authority by now had
divided the entire sports city of Sector 78 &
79 into various plots and allotted the same
to various companies, which were 100%
subsidiaries of the allotted companies. An
integrated plan for development of the
sports city was filed by the allottees
together,
in
which
it
had
sports,
commercial as well as residential area to be
developed and was approved by the Noida
authority on 16.06.2014. Each sub lessees/
companies were separately assigned areas
for developing residential, commercial as
well as sports facilities. In the chart of the
approved map, obligation of various
companies for completion of residential,
commercial and sports facilities were
marked, which was as follows :-
2 All. M/s Sequel Buildcon Pvt. Ltd. Vs. State of U.P.& Anr.
567

8. As per the approved integrated map
of 16.6.2014, the obligation of the
petitioner company was on plot No.SC-01/
A-1 Sector 79 area of 50,000 sqm, with an
FAR of 1,37,500 sq. mts. with 30%
coverage for residential (15,000 sqm being
30% of the total land) and the sports
facility to be developed by them was 0.00
sqm. As such, 70% of the land was to be
left open for sports facility. The petitioner
company was neither allotted development
of any commercial area nor it was obliged
to develop sports facility.

9. Yet again, the petitioner company
requested NOIDA Authority to sub divide
its Plot No.SC-1/A1 in Sector 79, into two
plots bearing SC-01/A-1 ALPHA, Sector79, Noida measuring 30,000.00 sqm, which
was retained by the petitioner company,
and SC-01/A1-BETA, Sector-79, NOIDA,
measuring 20,000.00 square metre, which
was later on transferred in favour of M/s
Pinnacle Superstructures Pvt. Ltd. The
Noida Authority executed a separate lease
deed in its favour on 11.12.2014 on the
same
terms
of
allotment
and
lease
conditions.

10. On 02.02.2015 the petitioner
company submitted an application for
sanction of building plan for plot no. SC01/A1- ALPHA, which was 30,000.00 sqm
and
allotted
to
the
petitioner.
On
13.03.2015
the
building
map
was
sanctioned with the condition that the
sanctioned map would be valid for a period
of five years (i.e. till 12.03.2020).

11. As per sanctioned map, the
petitioner was supposed to make seven
towers of 27 floors. The approved plan of
these towers as well as current situation of
completion of the project by the petitioner
company is as follows:-
568 INDIAN LAW REPORTS ALLAHABAD SERIES
Sl.
No.
Plot no.
Are
a
(Sq.
m.)
Name of
Allottee
Appr
oved
tower
Constr
ucted
tower
Current
status of
construc
tion
of
sports
activity
2.
SC-01/A1
(ALPHA)
/79
300
00
M/S
SEQUEL
BUILDCON
PVT. LTD.
07
Towe
rs
A=S+
27
B=S+
25
C=S+
23
D=S+
21
E=S+
24
F=S=
26
G=S+
28
21
Villas
07
Towers
S+17
S+17
S+19
S+19
S+1
S+5
S+6
Not
Constru
cted
Open
Area
is
part
of
Sports
Activity
which is
not
develope
d

12. The petitioner company had
proposed to make seven towers consisting
of 660 flats, out of which they sold 342
flats. Although the petitioner company was
supposed to complete the project in time
but due to certain reasons cited by them,
they did not complete the project. On the
other hand, the petitioner company, in spite
of collecting money from the homebuyers,
chose not to pay the dues to Noida
Authority.

ZERO PERIOD

13. There were certain issues about
delay in handing over the clear possession
of the land, hence, the allottees requested
Noida Authority to grant Zero period as
Noida Authority failed to provide the actual
physical possession, because of which the
builders could not start construction.

14. After due deliberation, the Noida
Authority agreed to grant benefit of Zero
period till 31.01.2017 for certain area, and
thereafter handed over the land with new
payment plan by which payment was
extended till 31.01.2025.

15. It transpires that there were some
report of scam in development of sports
city, hence, the entire issue was referred to
Comptroller and Auditor General4. The
CAG thoroughly evaluated the matter and
submitted a report. The report given by the
CAG was shocking and unearthed the
entire scam. The report contains as to how
the
Noida
Authority
and
the
State
Government had suffered a huge loss
amounting to Rs.9000/- crores, as Noida
Authority while making the scheme has
done wrong pricing of the Sports City.

16.
As
per
the
brochure
only
residential and commercial plots could
have been divided but the Noida Authority
sub-divided the entire plots, which were
earmarked for Sports City as well. The bids
of the allottees were not screened and the
turnover of the candidates were also not
considered before allotting the plot. The
Lead Member having the highest share was
completely ousted from the project and
thereafter, the allotment was done to
various other companies, who individually
could not have qualified in the financial bid
evaluation. This dubious methodology
adopted by the Noida Authority had
resulted in allotment of plots to those, who
were
not
even
entitled
to
apply
individually. The Noida Authority did not
2 All. M/s Sequel Buildcon Pvt. Ltd. Vs. State of U.P.& Anr.
569
even bother to collect the installments dues
and no efforts were made by them in this
regard, which gave an undue and illegal
advantage to the allottees. The finance
department of NOIDA has issued a fresh
payment plan considering each allottee
company as a fresh allottee. The transfer
charges for second and third transfer were
not
even
collected.
In
some
cases
occupancy certificate has been issued even
without development of sports facilities.
The lease rent was also not recovered by
the NOIDA.

17. As a knee jerk reaction of the CAG
report, the NOIDA Authority held its Board
meeting on 18.01.2021 (201st Board
Meeting) in which it has been resolved that
in order to complete the sports facilities in
the Sports City, a Committee should be
formed, which would look into the situation
and put-forth a report in the next Board
meeting and stayed any further steps to be
taken
in
the
Sports
City
including
revalidation of the maps.

18. The next Board's meeting was
held on 26.07.2021, wherein it was
resolved that no further sub division of
plots in the sports city would be carried out,
and further the matter was referred to the
State
Government
for
direction
and
guidance.

19. After the CAG report, looking into
the gravity of the situation a Public
Accounts
Committee5
comprising
of
members of Legislative Assembly was
constituted to look into the issue. During
the hearing, PAC decided that it will not
venture on the issues, which are pending
before the High Court and National
Company Law Appellate Tribunal6.

20. Since nothing was happening after
the Board Meeting and no decision was
taken by the State Government, and
because of the stalemate the promised flats
could not be delivered to the allottees, so
some of the flat owners chose to file a
Petition under Section 7 of Insolvency and
Banking Code, 20167 before NCLT, Delhi,
(Mr. Neerav Bhatnagar & Ors. vs. M/s.
Sequel Buildcon Private Limited and
Anr.) which was admitted on 16.06.2023
and moratorium period was declared in
terms of Section 14 of the IBC, 2016 and
one Mr. Amar Pal was appointed as Interim
Resolution Professional8.

21. The suspended Director of the
petitioner-company filed an appeal before
the NCLAT being Appeal No.823/2023
seeking 'Reverse Corporate Insolvency
Resolution Process' wherein it was stated
that an understanding has been arrived
between the builder/promoter as well as the
Home Buyers Association, wherein the
petitioner has agreed to arrange for interim
finance and project may be continued in the
supervision of the IRP. On his request, the
appeal was entertained and constitution of
'Company of Creditors'9 was stayed till the
next date of hearing.

22. Thereafter, on 12.07.2023, the
MOU was executed in between IRP,
homebuyers, petitioner and third party M/s
Eka Life Limited, who had agreed to bring
interim finance and infuse it into the
project.

23. Learned NCLAT passed an order
in terms of the MOU arrived between the
parties in which it was provided that Rs.20
crores will be deposited by the third party
M/s Eka Life Limited in the RERA
approved escrow account and further held
that moratorium will continue to operate on
the Corporate Debtor and the IRP will
continue to keep the Corporate Debtor and
will submit his report on the project
progress with the executing authority on a
quarterly basis.
570 INDIAN LAW REPORTS ALLAHABAD SERIES

24.
On
28.07.2023,
the
Interim
Resolution Professional requested NOIDA
for providing details of pending dues so
that the possibility of making payments can
be ascertained. On the request, the Noida
authority had given a break up of the
outstanding dues of the petitioner.

25. It was on 01.08.2023, the IRP
requested NOIDA for map revalidation and
extending the same till February, 2026 so
that the order of NCLAT could be
complied with.

26. On 16.10.2023, the NCLAT again
passed an order directing all concerned
stakeholders to take steps. Relevant part of
the said order is quoted hereunder :-

"(iii) All concerned to take steps
to act in pursuance of our order dated
25.07.2023. IRP with the assistance of
promoter to take steps for renewal of
registration of the project and obtain all
other necessary permission to start the
construction which may be completed
within
30
days
from
today.
The
construction of the project may commence
immediately thereafter."

27. The NOIDA gave a letter on
30.10.2023 stating that, in the Sports City
the CAG has raised certain objections and
the Board of NOIDA had recommended the
matter to the State Government for its
orders and directions, which is still
pending. It was further stated that the issue
is also pending before the PAC. It is only
after their decision any action will be taken
on the revalidation of the map.

28. Aggrieved by the action of Noida
Authority, the petitioner company has
preferred the instant writ petition seeking
following reliefs:-

"I. Issue a writ, order or direction
in the nature of certiorari or setting aside
the decision of the respondent no.2 taken
on 201st Board Meeting of respondent no.2
dated 18.01.2021 qua to stop/put on hold
sanction/re-validation of building plans
and other approvals in respect of Sports
City Plot; and

II. Issue a writ, order or direction
in the nature of mandamus directing
respondent no.2 to grant approval in
respect of application for revalidation of
map/building plans submitted by the
petitioner on 25.06.2021 for the purpose of
construction and development of a groud
housing project namely "Belvedere" on
plot no.SC-01/01 A, admeasuring 30000 sq.
meters located in the sports city plot
No.SC-01-01,
Section
78/79,
Noida
Gautam Budh Nagar, U.P. and

III. Issue a writ, order or
direction in the nature of mandamus
directing respondent no.2 to grant zero
period with regard to the payment of lease
premium, annual lease rent, interest,
installment, and time extension charges in
respect of the Subject Plot for the period
commencing from 25.06.2021 i.e. date on
which
the
petitioner
applied
for
approval/sanction/revalidation of maps/
building plans and other approvals in
respect of the said plot till the date on
which the respondent no.2 issues approvals
in respect Application for Revalidation of
map/building plans submitted by the
petitioner in respect of the Subject Plot;
and

IV. Issue a writ order or direction
in the nature of mandamus directing the
respondent no.2 to grant an extension of
time with regard to the time period
stipulated in the Lease Deed for completion
of the project commencing from the period
commencing from 25.06.2021 i.e. date on
which the Board of respondent no.2 has
suspended
the
approval/
sanction/
2 All. M/s Sequel Buildcon Pvt. Ltd. Vs. State of U.P.& Anr.
571
revalidation of map/building plans and
other approvals in respect of the sports city
plots in Noida till the date on which the
respondent no.2 issues approvals in respect
of Application for Revision of Building
Plans submitted by the petitioner in respect
of the Subject Plot; and

V. Issue a writ, order or direction
in the nature of mandamus directing the
respondent no.2 to not issue any demand
notice or any further or subsequent default
notices till the time the Application of the
Petitioner for revalidation of map/building
plans in respect of Subject Plot is not
approved by the respondent no.2; and

VI. Issue a writ, order or
direction to award compensation to the
petitioner for not considering the approval
of maps, re-validation of maps as per the
applicable laws in the requisite time plans;
and

VII. Issue another order or
direction which the Hon'ble C ourt may
deem fit and proper in the circumstances of
the case;"

29. In reply to the contents of said writ
petition, NOIDA has filed a detailed
counter affidavit, in response to which a
rejoinder has also been filed by the
petitioner.
ARGUMENTS ON BEHALF OF THE
PETITIONER

30. Sri Anil Tiwari, learned Senior
Counsel appearing for the petitioner
company submitted that the petitioner is
IRP representing the company. He further
submitted that Noida Authority in its 201st
Board meeting held on 18.01.2021 had
resolved that in order to ensure completion
of sports facilities for the Sports City
project, a Committee should be formed and
the said Committee, after considering all
the facts and circumstances, shall place
revised sports city proposal in the next
meeting and till then, no approval for the
building plan would be accorded to any of
the builder/allottee in the Sports City.
Thereafter, in the second Board meeting the
Noida Authority referred the matter to the
State Government to seek instructions and
directions but till date, no action has been
taken by them and because of the inaction
of the Noida Authority/State Government,
the petitioners are suffering a huge loss.

31. Learned Senior Counsel for the
petitioner submitted that out of the 23
divisions made in the sports city of Sector
78-79, the maps have been approved only
on 12 plots and out of which the
construction has started only on 11 plots,
hence more then 70% of of the land is still
vacant on which the sports facilities can be
developed by the companies, which have
been assigned with the responsibility of
developing the sports facility in the sports
city.

32. He further submitted that the way
sports city has been bifurcated, it is
difficult to develop the sports facilities as
mentioned in the scheme and the brochure.

33. He next submitted that because of
the inaction of the respondent nos.1 & 2,
the petitioner company could not complete
the project and hence, once the debtor had
initiated Insolvency Proceedings against
the petitioner company, Noida Authority
went to the extent of issuing default notice
on 24.03.2023 calling upon the petitioner to
pay Rs.16,61,73,510/- as arrears regarding
the said plots, which was due till
31.03.2023. The National Company Law
Tribunal10 vide order dated 16.06.2023 had
directed
for
initiation
of
Corporate
Insolvency
Resolution
Process11
and
appointed Mr. Amar Pal as Interim
572 INDIAN LAW REPORTS ALLAHABAD SERIES
Resolution Professional and also declared
moratorium.

34. Learned Senior Counsel submitted
that the erstwhile management of the
petitioner company, who had all the
intention to complete the project and hand
over the flats to the home buyers, in the on
going proceedings under the IBC, 2016,
moved an application for initiating reverse
IRP as that was the only way to make his
company survive and also to finish the
project and handover the flats to the flat
owners. To complete the project the former
Directors
had
arranged
for
interim
financing, and for that it had entered into
Memorandum of Understanding12 between
the homebuyers and the Company through
the IRP and the third party, M/s Eka Life
Limited, who was ready to infuse funds in
the project for its completion.

35. He submitted that the NCLAT,
Delhi, after verifying the contents of the
MOU and the other documents available on
record, was satisfied that in the best interest
of the company, homebuyers and the other
Corporate Debtors, reverse CIRP had to be
initiated and, accordingly, allowed the
reverse CIRP and directed the IRP to take
all the necessary steps for completion of the
project.

36. In this backdrop, he submitted that
the instant petition is filed by the IRP,
which, in compliance of the order of
NCLT,
had
approached
the
Noida
Authority to revalidate the map, so that
further construction could be carried out
and the project may be completed and
handed over to the homebuyers. Since,
revalidation
was
refused
by
Noida
Authority
on
frivolous
grounds,
the
petitioner was left with no other alternative
but to file the instant writ petition.

37. He further submitted that the
petitioner company is governed by the
conditions of the lease deed executed
between the petitioner company and Noida
Authority, and further, it had to carry out
construction as per the sanctioned layout
plan by Noida Authority. As per the
sanctioned
map/approved
plan,
the
petitioner was not obliged to develop any
sports facility in the sports city. There was
no deviation in the plan and further there
was no reason for Noida Authority for not
revalidating the layout plan.

38. It was submitted that since Noida
Authority was a party before the NCLT and
NCLAT, all the orders passed by NCLT &
NCLAT are binding on it. The Noida
Authority was well aware that revalidation
of the map was a part of the resolution
process plan and by not revalidating the
map they are virtually putting spoke in the
wheel in revival of the company and are
openly flouting the orders/directions passed
by NCLT and NCLAT.

39. He further submitted that NCLT
had taken cognizance on the report of the
IRP and held that because of inaction of
Noida Authority in revalidation of the
layout plan, the construction could not start
in absence of sanction of the layout plan.
The NCLT has clearly directed that "Be
that as it may", the restoration of the
registration of the project with the RERA
and sanction of the NOIDA are necessary
conditions for starting any construction in
the project. Matter being pending before
the relevant authorities i.e. NOIDA, RERA
and the State Government, the NCLT was
of the view that the concerned authorities
may take expeditious steps, and the IRP
was directed to file further Status Report
bringing
subsequent
development
on
record.
2 All. M/s Sequel Buildcon Pvt. Ltd. Vs. State of U.P.& Anr.
573

40. He further submitted that as per
the clarification letter of Noida Authority,
the construction of sports facilities in the
Sports City was assigned to only two
companies (i.e. M/s Three C Green
Developers Pvt. Ltd. and Xanadu Infratech
Pvt. Ltd). As a matter of fact, the entire
Sports City in Sector-78 & 79 were divided
in 24 parts (companies), and all the other
companies
were
not
assigned
the
responsibility of setting up the Sports City.
However, the allottees were assigned to pay
for
the
sports
facilities,
hence,
the
petitioner company has no obligation to
develop the sports facilities, but has to pay
for development of such facilities as
directed by Noida Authority, for which the
petitioner company is ready and willing to
pay.

41. He further submitted that the
MOU/Master Agreement, entered between
the homebuyers, the petitioner company
and the IRP dated 19.09.2023, clearly
shows that M/s Eka Life Limited is a
statutory partner, who has agreed to infuse
funds to the extent amount of Rs.75 crores
as per Clause 4.1 of the MOU. As per
Clause 4.1.1 of the agreement, a sum of
Rs.20 crores shall be disbursed by M/s Eka
Life Limited upon completion of the
condition precedent as set out in Annexure
No.1 of the MOU and upon its fulfilment
only, another tranche of Rs.55 crores would
be infused as an interim funding. As per
Clause A(I) and rules and responsibilities
of the MOU, it is clear that the promoter
would get all the permissions from the
Noida Authority within a period of four
months (with a grace period of three
months).

42. The learned Senior Counsel
assertively submitted that there has been
endless shortcomings on the part of Noida
Authority and its officers, hence, it is high
time that just like lifting the corporate veil,
the administrative veil has to be lifted to
find out the real perpetrators of this large
scale bungling/scam.

43. To buttress his arguments, learned
Senior Counsel has placed reliance on the
following judgments passed by Hon'ble
Supreme Court in the matter of M.C.
Mehta v. Kamalnath13. Thereafter, in
M.I.Builders v. Radheyshyam Sahu14,
Rajiv
Suri
v.
Delhi
Development
Authority15, Reliance Natural Resources
Limited v. Reliance Industries Limited16,
Center for Public Interest Litigation v.
Union
of
India17,
Manmohan
Lal
Chaddha v. Union of India18.

44. He submitted that in order to
preserve the integrity of administrative law
and to avoid any further damage, and in
furtherance to the development of the
sports city, the compliance to the orders
passed by NCLT/ NCLAT has to be
adhered to in toto, and the maps are ought
to be revalidated.

Doctrine or Repugnancy Article 254
- Inconsistency between law made by
Parliament and laws made by the State
Assembly.

45. Learned Senior Counsel further
submitted that in the event of a conflict
between the Union law and a State law in
concurrent field, the former prevails over
the latter. In the present case, also the order
to stop any further development of the
sports city taken in 201st Board Meeting by
the NOIDA directly clashes with the orders
passed by NCLT and NCLAT.

46. He submitted that by virtue of
Section 238 of the IBC, 2016 and Article
254 of the Indian Constitution, no State Act
or Rule can stand in the way of corporate
574 INDIAN LAW REPORTS ALLAHABAD SERIES
insolvency resolution process under the
Code in the compliance of learned
NCLAT's orders, which is paramount.
Since the very lease deed and brochure of
the Sports City Scheme is governed by U.P.
Industrial Area Development Act, 197619,
and the orders of the NCLT being passed
under the Insolvency and Bankruptcy
Code, 201620 i.e. a Central Act, hence, the
orders of NCLT and NCLAT will prevail
over any order passed under the Act, 1976.

47. He further submitted that Section
238 of the IBC, 2016 clearly lays down that
the provisions of IBC would override
anything contained in any other law in
force or any instrument having effect by
virtue of such law. This provision clearly
accords supremacy to the provisions of
IBC, 2016, if it is inconsistent over any
other law.

48. To buttress his argument, learned
counsel for the petitioner has placed
reliance
on
the
judgement
in
Commissioner of Income Tax v. Monnet
Ispat and Energy Ltd.21 wherein Hon'ble
Supreme Court has held that the IBC, 2016
would
override
anything
inconsistent
contained in any other enactment, including
the Income Tax Act, 1961.

49. He had also placed reliance on the
judgement in the matter of Innoventive
Industries Ltd. v. ICICI Bank &
Another22 in which Hon'ble Supreme
Court has held that if any Act is repugnant
to the IBC, and if there is a direct clash
between moratoriums under the two
Statutes. The non-obstante clause of the
IBC will prevail over the non-obstante
clause of the State Act. In the matter of M/s
Embassy Property Developments Pvt.
Ltd. v. State of Karnataka & others23,
Hon'ble Supreme Court has observed that
it is clear that the IBC is a complete code in
itself. It is an exhaustive code on
insolvency in relation to corporate entities
and others. It is also true that the IBC is a
single unified umbrella code, covering all
law relating to insolvency resolution of
corporate persons and others in a timebound manner.

50. He had placed reliance on the
judgement in the matter of Pioneer Urban
Land and Infrastructure Ltd. and
another v. Union of India & others24 in
which Hon'ble Supreme Court has held
that RERA is to be read harmoniously with
the Code, as amended by the Amendment
Act.