Home Case Index All Cases Insolvency and Bankruptcy Insolvency and Bankruptcy + AT Insolvency and Bankruptcy - 2022 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (4) TMI 206 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Appellant invested in the Real Estate Joint Venture Project in the capacity of a Promoter - Financial Creditors or not - existence of debt and dispute or not - Section 5(7) of the IBC - HELD THAT:- The Appellant is classified as a ‘Promoter’ who seeks to develop the said Plot and construct the studio apartment, club, jogging track, shops, dormitory, children park on the said plot and has entrusted the Project to the Respondent who is arrayed as the ‘Developer’ in the said Memorandum of Understanding. In fact, the Joint Venture Project in the name and style of ‘Valley View Apartments Project’ was to be launched and promoted in the name of Appellant herein. Clause 15 of the Memorandum of Understanding specifies that ‘promoter’ shall be entitled to raise loans in its own name from banks/financial institutions for the project. There shall be no liability on the Developer for re-payment of the loans or interest.” A careful perusal of the Memorandum of Understanding and also the Joint Venture Agreement entered into between the parties on 28.09.2011 and 27.02.2012 respectively shows that the relationship between the Appellant and Respondent is that of land owner and developer and furthermore viewed from any angle the amount invested by the Appellant towards the completion of the Project cannot be termed to be a ‘Financial Debt’ as defined under Section 5(8) of the Code. Having regard to the nature of the transactions between the Appellant and the Respondent this Tribunal is of the earnest view that the Appellant does not fall within the definition of term ‘Allottee’. Having regard to the terms and conditions of the Memorandum of Understanding and the Joint Venture Agreement entered into between the parties, this Tribunal is of the considered view that the amount invested in the ‘Joint Venture Project’ by the Appellant herein in his capacity as a ‘Promotor’ and ‘Investor’ does not fall within the ambit of the definition of ‘Financial Debt’ as defined under Section 5(8) of the Code - Appeal dismissed.
|