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2024 (2) TMI 872 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHIRejection of section 7 application - Existence of financial debt or not - status of allottee for sale of plots (real estate project) - what is the nature of transaction between the parties whether the transaction can be held to be financial debt within the meaning of Section 5(8) of the Code? - HELD THAT:- On accepting the submission of the Appellant that appellant is an allottee, application under Section 7 was required to be complied with the provisions of Section 7(1) as amended by Act 1/2020, thus Application has to be filed by not less than 100 of such creditors in a class or not less than 10% of total number of such creditors. Appellant having not filed the application as allottee has not even pleaded that the Application under Section 7 which was filed on 29th July, 2021 fulfils the conditions as provided in section 7(1) thus even if we accept that Appellant as an allottee within the meaning of Section 2(d) of the RERA, there being no compliance of Section 7(1), the Application under Section 7 cannot succeed on the ground that Appellant is an allottee in the Real Estate Project. Thus the submission of the Appellant that Appellant is an allottee does not render any benefit to the Appellant and on the said submission the application filed as an allottee cannot be admitted and was liable to be rejected due to non-compliance of Section 7(1) of the Code. Submission of the Appellant that transaction in question falls within the definition of Section 5(8)(f) of the Code - HELD THAT:- All transactions which are covered under Section 5(8) which has to be treated as a financial debt, has to be necessarily disbursal against the consideration for the time value of money. Agreement entered between the parties was for sale and purchase of the land on consideration fixed in the agreement i.e. 21,000 per sq. m. The Appellant who was to bring allottees in whose favour the leases were to be executed by the Respondent, it was open for the Appellant to sell the land at any price i.e. even higher to the amount fixed between the parties and the excess amount on which any lease is executed by the Respondent shall be treated as commission of the Appellant - The transaction was thus clearly transaction for sale and purchase of the assets and it cannot be said that disbursal was for time value of money. The transaction between the parties does not fall under Section 5(8)(f) of the Code - also held that application filed by the Appellant cannot be sustained under Section 7 as an allottee of the real estate project as the Appellant being allottee of Real Estate Project thus under Section 5(8)(f) claim of the Appellant as Real Estate Project allottee is unsustainable. The Adjudicating Authority in the Impugned Order has come to the conclusion that transaction as described in MoU / Agreement to Sale / Addendum is essentially in the form of arrangement of selling, marketing , promoting and bringing prospective allottees to the Respondent Radiant Hotels Pvt. Ltd. The Adjudicating Authority has also rightly come to the conclusion that obligation of payments of money under the agreement of sale by no stretch of imagination can be construed as a financial debt - the finding of the Adjudicating Authority while rejecting the application filed under Section 7 of the Code agreed upon. Thus, no error has been committed by the Adjudicating Authority in rejecting the Section 7 Application filed by the Appellant. There is no merit in the Appeal - The Appeal is dismissed.
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