TMI Blog2017 (8) TMI 1568X X X X Extracts X X X X X X X X Extracts X X X X ..... ed returns which was to be paid month to month till, the completion of the project! apartment - thus, the appellants in this case have also successfully proved that the money disbursed by them is against the consideration for the time value of money and for all purpose, they come within the meaning of 'Financial Creditor' as defined in Section 5(7) of the 'l B Code'. Matter remitted to Adjudicating Authority to admit the application preferred by appellants and pass appropriate order, if the application under Section 7 of the 'I B Code' is otherwise complete - appeal allowed by way of remand. - Company Appeal (AT) (Insolvency) No. 74 Of 2017 - - - Dated:- 2-8-2017 - Justice S.J. Mukhopadhaya, Chairperson And Balvinder Singh, Technical Member Vikas Tiwari and Neeraj Kr. Gupta, Advs. for the Appellant. ORDER 1. The appellants, who claimed to be 'Financial Creditor' filed an application under section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as I B Code) for initiation of insolvency process in respect of the Respondent- 'Corporate Debtor'. 2. Ld. Adjudicating Authority (National Company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that any observation made in the said order shall not be construed as an expression of opinion on the merit of the controversy as the Ld. Adjudicating Authority had refrained from entertaining the application at the initial stage. 4. Ld. Counsel for the appellant brought to our notice the decision of this Appellate Tribunal in Nikhil Mehta and Sons v. AMR Infrastructure Ltd dated 21st July, 2017 passed in Company Appeal (AT) (Insol.) No. 07 of 2017. It is submitted that the original judgment passed by Ld. Adjudicating Authority in Nikhil Mehta and Sons v. AMR Infrastructure Ltd has been referred in the impugned order dated 8th March, 2017, which has been ordered to be communicated to the appellant along with copy of the impugned order. 5. The aforesaid order passed by Ld. Adjudicating Authority in 'Nikhil Mehta Sons' was challenged before this Appellate Tribunal. In 'Nikhil Mehta Sons v. AMR Infrastructure Ltd', considering the agreement/ Memorandum of Understanding relating to purchase of shops and flats, this Appellate Tribunal, held as follows: - 20. From the aforesaid agreement/Memorandum Understanding it is clear that appellants are invest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellants. However, as the appellants were not required the monthly return till December 2008 i.e. for 9 months so the Respondent-Corporate Debtor undertook to make a consolidated payment of ₹ 99,600/- less TDS. For every calendar month the Corporate Debtor was liable to pay committee return w.e.f. January 2009 till the date of handing over of the possession to the appellants. Therefore, it is clear that the amount disbursed by the appellants was against the consideration of the time value of the money and the Respondent-Corporate Debtor raised the amount by way of sale - purchase agreement, having a commercial effect of borrowing. This is also clear from annual returns filed by Respondent and not disputed by the Respondent-Corporate Debtor in their annual returns, wherein the amount so raised/borrowed has been shown as 'commitment charges' under the head Financial cost . The financial, cost includes Interest of loans and other charges. Therefore, the 'commitment charge' which include interest on loan, shown against the head Financial cost having accepted by the Corporate Debtor in their. annual return, we hold that the appellants have successfu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount, where any of the abovementioned PDC's gets bounced on account of any reason whatsoever, and/or in case of non-payment of the balance amount on due date (as mentioned in this MOU) by the Allottee(s). The Flexi Payment Plan of the Allottee(s) shall change into Construction Linked payment Plan (CLP) without any notice to the Allottee(s) and after the change of payment plan into CLP, commitment Amount will not be paid by the Company to the Allottees(s). Further, the Allottee(s) is also liable to return to the Company 50% of the Commitment Amount already paid to the Allottee(s). If in any case Commitment Amount is not returned, Company may adjust the same by reducing the area allotted to the Allottee(s) or recover the amount with interest at any time as the Company deems fit and appropriate. The Allottee(s) knows and understands that Commitment Amount is applicable only in the case of Down Payment Plan and Flexi Payment Plan. 9. The appellants have enclosed the Balance Sheet of the Respondent Company as on 31St March, 2015 wherein against the 'current liabilities', apart from 'short term borrowings', the following liabilities have been shown: - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the balance amount on due date or any of the cheque has been bounced on account of any reasons. The respondent has also not denied the allegation that the 'commitment amount as mentioned in the agreement! Memorandum of Understanding has not been paid month to month and there is a default. 12. From the agreement/ Memorandum of Understanding, we find that the appellants are also investors and have chosen committed return plan like Nikhil Mehta and Sons v. AMR Infrastructure Ltd . Thereby we hold that the amount as is due to the appellants, come within the meaning of debt as defined in Section 3(11) of the 'II B Code'. 13. The Balance Sheet has been enclosed by the appellants, wherein the amount deposited by 'persons', including the appellants as shown also -11- suggest that the Respondent 'Corporate Debtor' treated the appellants as 'investors' and borrowed the amount pursuant to sale purchase agreement for their 'commercial purpose' treating the amount at par with 'loan' in their return. Thereby, the amount invested by appellants come within the meaning of 'Financial Debt', as defined in Section 5(8)(f) of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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