TMI Blog2019 (1) TMI 728X X X X Extracts X X X X X X X X Extracts X X X X ..... ccept its offer and fixed the date for hearing on 05.12.2018. However, on 05.12.2018 there was no whisper of settlement. We further granted time to the Corporate Debtor to do so and fixed the date for hearing on 02.01.2019. However, again on 02.01.2019 there was no whisper of settlement. Corporate Debtor did not appear to argue the matter. We heard the arguments and reserved the order. During the previous interregnum period between 23.10.2018 to 02.01.2019 and again after lapse of four days no meaningful results have followed. The object of the 'Code' is to resolve the insolvency issue which cannot be achieved unless the petition is admitted. The resolution as against liquidation would only be possible if the Corporate Insolvency Resolution Process is triggered and efforts in that direction are made. The admission of the petition cannot be successfully resisted on such a flimsy ground. Therefore, we have no hesitation to reject the defence raised on behalf of the Corporate Debtor. Discussion and the material placed on record it is confirmed that applicants-financial creditors had disbursed the money to the respondent corporate debtor as consideration for purchase of a reside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of sub-section (1) of Section 60 of the Code. 3. The 'Financial Creditors'-Petitioners have proposed the name of Resolution Professional, Shri Yash Jeet Basrar, A-71, Golf View Apartments, Sapatparni CGHS Ltd., Plot No. 4, Sector 19B, Dwarka, ybasrar@gmail.com. He has New Delhi-110075, email id registration No. IBB1/1PA-002/1P-N00275/2017-18/10833. A written communication sent by him in terms of Rule 9(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 has also been placed on record [Annexure-C (colly)l. There is a declaration made by him that no disciplinary proceedings are pending against him in Insolvency and Bankruptcy Board of India or Indian Institute of Insolvency Professionals of ICSI-IPA. In addition, further necessary disclosures have been made by Mr. Basrar, as per the requirement of the IBBI Regulations. Accordingly, he satisfies the requirement of Section 7 (3) (b) of the Code. It is the case of the petitioners that they had purchased a 4. constructed residential flat bearing No. T-18-VI in Tower No. T-18 at Khyber Pass, Delhi having an area admeasuring 9945 sq.ft. approximately for the total consideration of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le to pay an amount of ₹ 24,73,42,927/- (Rupees Twenty Four Crores Seventy Three Lakhs Forty Two Thousand Nine Hundred and Twenty Seven Only) to the petitioners. 8. On 02.01.2019 when the matter came up for arguments, the proxy counsel for the Corporate Debtor stated that the arguing counsel is not available. We heard the arguments of the petitioner's counsel, reserved the order and opportunity for filing written submissions within three days was given. Despite giving opportunity to file written submission, the Corporate Debtor did not choose to submit the same. Learned counsel for the Corporate Debtor has opposed the 9. admission of the application and has advanced the following arguments by way of reply as well as additional affidavit of Mr. Madan Dogra, authorized representative of the Corporate Debtor dated 28.12.2018 filed on 31.12.2018:- (i) The present application is not maintainable under Section 7 of the Code because there is no default on the part of the respondents in terms of Section 3 (12) of the Code and further there is no debt due and payable within the meaning of Section 3 (11) of the Code. (ii) There is a mis-joinder of parties as Directors o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... highlighted that in view of the abovesaid facts the delay in completion of the project is totally beyond the control of the Respondent company. Copies of the letters issued by the authorities, Minutes of the Meeting dated 09.06.2017 of DMRC and Minutes of Meeting dated 30.08.2018 have been placed on record [Annexure R-2 (colly), R-3 R-4]. (v) Comprehensive disputes exist in the present case which warrants an elaborate trial and the same cannot be decided by this Tribunal with the limited jurisdiction of Section 7 of the Code. (vi) The IBC proceedings are not in the nature of recovery proceedings. The Financial Creditor in the garb of proceedings under IBC is seeking recovery of its alleged dues which is legally impermissible. 10. A rejoinder to the reply has been filed by the Financial Creditors reiterating the submissions made in the application and controverting the assertions in the reply. 11. Now we deal with the submissions made on behalf of the Petitioners. 12. Learned Counsel for the petitioners has argued that all requirements of Section 7 of the Code for initiation of Corporate Insolvency Resolution Process by a Financial Creditors stand fulfilled. In that regar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is covered by the definition of 'Financial Debt' under the Code. Definition of 'Financial Debt' has been amended to specifically include dues of home buyers i.e. Real Estate (Residential). The amendment also recognizes home buyers as Financial Creditor . Accordingly, the home buyers can initiate Corporate Insolvency Resolution Process against defaulting builder or developer, as Financial Creditor in terrns of Explanation to Section 5 (8) (O of the Code with effect from 06.06.2018. Therefore, the submission made to the contrary by respondent would not require any serious consideration. 16. It is pertinent to mention that on 01.10.2009 a flat buyer agreement was executed between the Petitioners Corporate Debtor whereby the petitioners were allotted by ear marking flat no. T-18-VI in Tower No. T-18 at Khyber Pass, Delhi having an area admeasuring 9945 sq.ft. under the aforesaid project of the Corporate Debtor. In the light of the said agreement, the petitioners have paid the total amount of ₹ 10,13,70,052/- to the Corporate Debtor which is almost the total sale consideration. According to the terms of the agreement, the Corporate Debtor was to handover ph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings under the Code are not in the nature of recovery. In the present application the Financial Creditors are seeking initiation of Corporate Insolvency Resolution Process by making prayer that all the Financial Creditors, Operational Creditors and others may raise their claims and if Corporate Financial Restructuring is possible then within the stipulated period it may be explored failing which the due process of law is to take its course. Therefore, by initiation of Corporate Insolvency Resolution Process the Financial Creditors are only highlighting the default committed by the Corporate Debtor with respect to its inability to pay. The same is required to be remedied. Therefore, it cannot be concluded that the filing of the present petition would amount to recovery of the debts by the Financial Creditor. 20. On 23.10.2018, we have granted time to the Corporate Debtor to come forward and prevail upon the Financial Creditors to accept its offer and fixed the date for hearing on 05.12.2018. However, on 05.12.2018 there was no whisper of settlement. We further granted time to the Corporate Debtor to do so and fixed the date for hearing on 02.01.2019. However, again on 02.01.2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the moratorium flows from the provisions of Section 14 (1) (a), (b), (c) (d) and thus the following prohibitions are imposed which must be followed by all and sundry: (a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; (b) transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein; (c) any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; (d) the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor. 26. It is made clear that the provisions of moratorium shall not apply to (a) such transactions which might be notified by the Central Government in consultation with any financial regulator; (b) a surety in a contract of gu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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