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2019 (10) TMI 1440 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Financial Creditors/home buyers - considerable delay being caused by the CD in completion of the project and being faced with uncertainty of the Project - demand for refund of entire amount paid by the FCS along with the interest - existence of a 'financial debt' and a 'default' was admitted - extension of time was granted to Corporate Debtor to complete the project - maintainability of complaint under RERA - Time limitation - HELD THAT:- The admission of an application under the IBC results in the commencement of the corporate insolvency resolution process while a complaint under RERA could result in the adjudicating authorities imposing penalties on the promoter and an order for return of money to the home buyer with interest and compensation. The FCS have rightly argued that the period of default has commenced from the date when the CD was required to deliver possession of the respective units. In the present case, the flat buyer agreements in respect of all the applicants were executed in the year 2013. Accordingly, as per the Recital 'C' of the Agreement, the CD was required to deliver possession of the respective units latest by the year 2016 inclusive of grace period. Thus, the period of default has commenced latest by June 2016 for the applicants and is still subsisting whereas the present application was filed in January 2019. The contention of the CD is that it has been granted time till 2021 to complete the said project. It is found that the argument is completely fallacious, in as much as the same would not absolve the CD of its liability to honor the commitment made to the applicants herein as per the builder buyer agreement for the purposes of the Code. Merely because the builder has been provided a different time-line for completion of the project to the RERA would not cut any ice because IBC override RERA and secondly the financial creditor is not a party to any such transaction. Moreover, there is contravention of Recital 'C' of the Agreement. It is settled principle of law that wherever time is the essence of a contract in such types of construction contracts, the builder is required to adhere to the date of delivery mentioned in the builder-buyer agreement despite the presence of similar reservations in the contract. Learned Counsel for the applicant has rightly argued that all requirements of Section 7 of IBC for initiation of Corporate Insolvency Resolution Process (CIRP) by a FC stand fulfilled - There is overwhelming evidence to prove default. The Applicant has specified the name of the resolution professional (IRP) and has annexed Form 2, the consent of the proposed IRP to the application accordingly. This Tribunal finds that this is a fit case to be admitted in terms of Section 7 of IBC and thereby initiate CIRP as against the CD - Application admitted - moratorium declared.
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