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TMI Blog2019 (3) TMI 196X X X X Extracts X X X X X X X X Extracts X X X X ..... ompanies Act, 1956. The registered office of the respondent corporate debtor is situated at 306-308, Square One, C2, District Centre, Saket, New Delhi-110017. Its authorized share capital is Rs. 60,00,00,00,000/- and the paid-up share capital is Rs. 912,62,00,000/- which is based on the details given in master data obtained from the official website of Registrar of Companies (Annexure 1/B). Since the registered office of the respondent corporate debtor is in Delhi, this Tribunal being Adjudicating Authority has territorial jurisdiction in respect of respondent corporate debtor as per the provisions of sub-section (1) of Section 60 of the Code. 3. The 'Financial Creditor'-Petitioner has proposed the name of Resolution Professional, Shri Manoj Kumar Anand, Office No. 202, 2, Community Centre, Naraina, New Delhi-110028, email id - [email protected]. He has registration No. IBBI/IPA-001/IP-P00084/2017-18/10180. 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-II). There is a declaration made by him that no disciplinary proceedings are pending again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one of the parties to a contract, cannot be held responsible in case the other party has also defaulted in obligations cast upon them under the same contract. (ii) The real intent and spirit of the legislature in bringing about the special Act namely the Real Estate Regulation Act, 2016 was to include homebuyers in the list of creditors, should any Company go into insolvency process so that they could get their monies back in case the resolution process failed and liquidation was the only recourse left. (iii) The present application is not maintainable under Section 7 of the Code because there is no debt due and payable within the meaning of Section 3 (11) of the Code. The amount has already been invested in the Project and that the Unit is virtually complete as Occupation Certificate is expected to be received by December, 2018 and immediately thereafter, the possession would be offered. (iv) The applicant has wilfully defaulted in making timely payments of instalments as per the Construction Linked Payment Plan opted by him and a delayed payment charge of Rs. 17,885/- has been debited to his account. (v) The relief which has been sought for by the petitioner in the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roximately, with the sole purpose of completing all the various projects that had been undertaken by the erstwhile merged entity. The Corporate Debtor has been and is still willing to relocate the applicant to a similarly situated 'ready to move' in unit in the same project if the applicant accepts such an offer. On account of the fact that the Corporate Debtor has undergone a demerger process which was allowed by this Tribunal on 16.07.2018 (Annexure R/2), post which, the management of the Corporate Debtor has been completely revamped and the parent company of Dubai being Emaar Properties PJSC has taken over the reins to deliver the projects that have been delayed due to unavoidable circumstances. It is again asserted that the unit in question is complete in all respects and the Occupancy certificate has already been applied and it is expected that the said certificate may be issued by the authority concerned anytime now and the offer of possession would be made immediately thereafter. 10. Now we deal with the submissions made on behalf of the applicant-Financial Creditor. 11. Before embarking upon the legal issues, we deem it appropriate to first refer to the material clauses o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eement. The argument seems to be that in the absence of express termination of the agreement the Financial Creditor-allottee would not have any right to claim that default has occurred. 13. The aforesaid argument suffers from a basic fallacy. The period of thirty six months plus three months came to an end in the July, 2014 and possession of the unit was required to be delivered. A reasonable period of delay of six months to one year might be acceptable. However, the facts in the present case shows that the project is not complete and the occupation certificate has not been obtained till date. In construing the terms of such like contract, it must be remembered that the Financial Creditor-allottee enjoy hardly any bargaining power to negotiate a clause in the agreement and these are standard form. The principles of reasonableness are implied in such like contract. There is extraordinary delay of about five years in delivering the possession and the Financial Creditor-allottee cannot be put to ransom by strict construction that the contract is not determined. A host of factors like the bargaining power of the parties, the choice available to the Financial Creditor-allottee and his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authority) Rules, 2016, read with Section 7 of the Code. We are satisfied that a default amounting to lacs of rupees has occurred. As per requirement of Section 4 of the Code if default amount is one lac or more then the CIR Process would be issued. The application under sub-section 2 of Section 7 is complete; and no disciplinary proceedings are pending against the proposed Interim Resolution Professional. 16. It is pertinent to mention here that clause (8) of Section 5 of the Code has been amended by the Insolvency and Bankruptcy (amendment) Ordinance, 2018 with effect from 6th June, 2018. In view of the revised definition, any amount raised from an allottee under a real estate project is deemed to be an amount having the commercial effect of a borrowing and thus is covered by the definition of 'Financial Debt' under the Code. Definition of 'Financial Debt' has been amended to specifically include dues of homebuyers i.e. Real Estate (Residential). The amendment also recognizes homebuyers as "Financial Creditor". Accordingly, the homebuyers can initiate Corporate Insolvency Resolution Process against defaulting builder or developer, as "Financial Creditor" in terms of Explanation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... real estate project. In such a situation not only the debt has a commercial effect of borrowings and come within the scope of 'financial debt' but also the petitioner is covered by the definition of expression 'financial creditor'. 19. Therefore, petitioner being financial creditor can invoke Corporate Insolvency Resolution Process under Section 7 of the code against the respondent corporate debtor in case of default in repayment of financial debt. 20. It is true that the proceedings under the Code are not in the nature of recovery. In the present application the Financial Creditor is seeking initiation of Corporate Insolvency Resolution Process by making prayer that all the Financial Creditor, Operational Creditor 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 Creditor is 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ussion and the material placed on record it is confirmed that applicant-financial creditor had disbursed the money to the respondent corporate debtor as consideration for purchase of a residential flat. Though a considerable long period has lapsed even the principal amount disbursed has not been repaid by the respondent corporate debtor as per the provision of the Flat Buyer's Agreement. It is accordingly held that respondent corporate debtor has committed default in repayment of the outstanding financial debt which exceeds the statutory limit of rupees one Lakh. Thus, the application warrant admission as it is complete in all respects. 24. Accordingly, in terms of Section 7 (5) (a) of the Code, the present application is admitted. 25. Shri Manoj Kumar Anand, Office No. 202, 2, Community Centre, Naraina, New Delhi-110028, email id [email protected], Registration No. IBBI/IPA-001/IP-P00084/2017-18/10180 is appointed as an Interim Resolution Professional. 26. In pursuance of Section 13 (2) of the Code, we direct that Interim Insolvency Resolution Professional to make public announcement immediately with regard to admission of this application under Section 7 of the Code. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctors, promoters or any other person associated with the Management of the Corporate Debtor are under legal obligation under Section 19 of the Code to extend every assistance and cooperation to the Interim Resolution Professional as may be required by him in managing the affairs of the Corporate Debtor. In case there is any violation committed by the ex-management or any tainted /illegal transaction by ex-directors or anyone else the Interim Resolution Professional/Resolution Professional would be at liberty to make appropriate application to this Tribunal with a prayer for passing an appropriate order. The Interim Resolution Professional/Resolution Professional shall be under a duty to protect and preserve the value of the property of the 'Corporate Debtor' as a part of its obligation imposed by Section 20 of the Code and perform all his functions strictly in accordance with the provisions of the Code. 30. We direct the Financial Creditor to deposit a sum of Rs. 2 lacs with the Interim Resolution Professional namely Mr. Manoj Kumar Anand to meet out the expenses to perform the functions assigned to him in accordance with Regulation 6 of Insolvency and Bankruptcy Board of India (I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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