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2021 (8) TMI 545 - AT - Insolvency and BankruptcyMaintainability of petition - Service of Notice - compliance of Rule 38 of NCLT Rules, 2016 - Allottee is a speculative investor or not - Whether the transaction between the Allottee and the ‘Corporate Debtor’ is clarified to be treated as ‘Financial Debt’ under Section 5(8) of the Code? - HELD THAT:- In the instant case, it is needed to be seen if the allottee has entered into any ‘lucrative Agreement’ based on the facts of this case. The clauses of the Agreement clearly stipulate that there is a buy-back Agreement, there is an assured return of 25% per annum at the end of 24 months or at the issuance of the final LTC by the Competent Authority (whichever is earlier). Right from the date of receipt of the booking amount from the Applicant, the word “investment” is consistently used. It is also stated that in consideration for the investment, the Company has agreed to earmark a unit in the project, give an assured return of 25% per annum and at the end of 24 months which is the minimum period of investment, it is also stated that the return assured would be given through the re-sale of apartment only. In Clauses 2(f) & (g) of the Agreement, the Home Buyer herein is given a choice to retain the apartment or to sell the earmarked unit. In a regular Builder Buyer Agreement, the Home Buyer does not have this option of exercising his choice of taking or not taking the possession of the subject unit. In a normal Builder Buyer Agreement if the Buyer does not accept the possession, the EMD is forfeited. In this case, the Buyer gets his money plus 25% assured return even if he chooses not to retain the apartment. This Agreement is only a camouflage of actually financing the construction of the flat. Though the Respondent has denied that the Respondent’s son had entered into a Settlement Agreement with the ‘Corporate Debtor’ for return of the principal amount, it is noted that the Learned Counsel on instructions has submitted that they are ready to settle the matter and return the principal amount - the Order of Admission under Section 7 is set aside. Appeal allowed.
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