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2024 (4) TMI 478 - AT - Insolvency and BankruptcyRejection of Section 7 Application filed by the Appellant (homebuyers) on the ground of non-compliance of Section 7, sub-section (1), 2nd Proviso - decree-holder is class of Financial Creditor or not - HELD THAT:- The judgment of the Hon’ble Supreme Court in Kotak Mahindra Bank [2022 (6) TMI 13 - SUPREME COURT] itself clearly provides that a person, who has a recovery certificate, which is akin to Decree, is entitled to file Section 7 Application as Financial Creditor. Whether the debt is fructified in a Decree or not, if debt is a financial debt it gives right to Financial Creditor to initiate proceedings under Section 7. The judgment of the Hon’ble Supreme Court in Vishal Chelani [2023 (10) TMI 949 - SUPREME COURT] has been relied by the Adjudicating Authority. It is relevant to notice the facts and ratio of the judgment of Vishal Chelani, which has been relied by the Adjudicating Authority. Vishal Chelani and other were Homebuyers, who had filed their claim on the basis of order passed by UPRERA. They filed claim in Form-CA in the category of Homebuyers. The RP informed the Appellants that they should file their claims in Form-C as a Financial Creditor. The Appellants filed an Application before the Adjudicating Authority, claiming that they should be treated as Homebuyers and they be permitted to file claim in Form-CA, which Application was rejected. The allottees in Vishal Chelani’s case were Applicants, who had also got order in their favour from RERA, but it was held by the Hon’ble Supreme Court that their status as a ‘Financial Creditor’ does not change and they were entitled to file their claim in Form-CA as a ‘Financial Creditor’. The above judgment of the Hon’ble Supreme Court, which was relied by the Adjudicating Authority, clearly supports the submission of learned Counsel for the Appellant. The Appellant cannot be said to go out of the definition of ‘allottees’ merely because they have an order in their favour by RERA and the Appellants’ submission that they should be treated in a different category, i.e., category of ‘Decree Holder’ and are not required to comply with Section 7, sub-section (1), 2nd Proviso cannot be accepted - Thus, Homebuyers, whether they have an order or Decree from the RERA or who do not have any Decree or order from RERA, belong to same category of allottees and no distinction can be made on the said ground. The Appellants are ‘allottees’ within the meaning of the Code and as a Financial Creditor, when they have filed the Application under Section 7, they were required to comply with Section 7, sub-section (1), 2nd Proviso and Adjudicating Authority did not commit any error in rejecting their Application due to non-compliance of Section 7, sub-section (1), 2nd Proviso. There is no merit in the Appeal and the Appeal is dismissed.
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