TMI Blog2019 (1) TMI 1687X X X X Extracts X X X X X X X X Extracts X X X X ..... record, which reveals that the principal amount has been paid by the Petitioners and has been received by the Respondent Corporate Debtor - Since the arnount has been raised from the petitioners/ allottees under a real estate project, not only the debt has a commercial effect of borrowings and come within the scope of 'financial debt' but also the petitioner comes within the definition of 'financial creditor' - Therefore, petitioner being a 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. The Form-I filed in the present case under Section 7 of the Code read with Rule 4 of the Rules, shows that the Form is complete in all respect and there is no infirmity in the same. Whether Respondent Corporate Debtor has committed default in payment of the financial debt? - HELD THAT:- In the present case Financial debt is outstanding since the year 2016. The Corporate Debtor has not denied the claim of Petitioners and has itself tried to settle the matter and the arnount of default exceeds much more than 1 lakh. In view of Section 4 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs-Petitioners namely Manjula Khullar, Satish Chander Khullar and Aanchal Khullar are allottees under a 'real estate project'. 4. The Petitioners have proposed the name of Mr. Anil Tayal, CA, for appointment as Interim Resolution Professional having registration number IBBI/IPA00I/IP-P01118 /2018-19/11818 resident of 1028, Routs Tower, District Centre, Laxmi Nagar, Delhi-110092 with email-id caaniltayal@gmail.com. Mr. Anil Tayal, CA has agreed to accept appointment as the interim resolution professional and has signed a written communication dated 30th August, 2018 in Form 2 in terms of Rule 9(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. There is a declaration made by him that no disciplinary proceedings are pending against him in Insolvency and Bankruptcy Board of India or elsewhere. In addition, further necessary disclosures have been made by Mr. Anil Tayal as per the requirement of the IBBI Regulations. Accordingly, he satisfies the requirement of Section 7 (3) (b) of the Code. 5. It is the case of the Petitioners that in the month of January 2012, the Corporate Debtor had launched its group housing project ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the Petitioners requested the Corporate Debtor vide email dated 16.07.2018 to refund their aforesaid deposited amount. The Respondent Corporate Debtor vide email dated 23.07.2018 asked the Petitioners to visit their office for meeting. The Financial Creditors through their representative had a meeting at the office of the Corporate Debtor on 25.07.2018. However, the Corporate Debtor refused to refund the deposited money to the Financial Creditors. 10. It is submitted that the Corporate Debtor has defaulted in re-paying the deposited sum of ₹ 1,85,92,093/- to the Petitioners together with interest and compensation despite repeated requests and demands. 11. In support of the claim the petitioners have placed on record the following documents: Copy of the allotment letter dated 30.08.2012. Copy of Apartment Buyer Agreement dated 27.02.2013. Copies of various demand letters and receipts issued by the Corporate Debtor. Copy of the email dated 16.07.2018. Copy of reply e-mail dated 23.07.2018. 12. The Corporate Debtor has filed its reply and raised few objections against the admission of the present a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clause 10 of the Agreement b) any circumstances not anticipated and beyond the reasonable control of the seller. c) Any restraints / restrictions from any courts/ authorities. d) And most importantly subject to the Purchaser(s) having complied with all the terms and conditions of this agreement and not being in default under any of the provisions of this agreement. 17. It is submitted that the financial creditors have suppressed material facts and without disclosing the fact that they have purchased a unit under the construction linked plan and have made several payments beyond the due dates and owes ₹ 51,74,898/- (Rupees Fifty One Lakhs Seventy Four thousand Eight Hundred Ninety Eight only) to the Corporate Debtor as interest on the said delayed payments. Moreover, the Financial Creditor has also failed to pay the instalments in respect of the 17th Floor Slab and 19th Floor Slab cumulatively amounting to ₹ 39,80,563/- (Rupees Thirty-Nine Lakhs Eighty Thousand Five Hundred Sixty Three only). 18. It is further alleged that the Petitioners are barred on the one hand for claiming benefit of clause 3.1 to claim refunds of the am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and except and take the possession of the Apartment within 30 (Thirty) days of the Notice of Officer of Possession, the Purchaser(s) shall be deemed to be custodian of the Apartment from such due date indicated in the Notice of Offer of Possession and the Apartment shall be held by the seller solely at the risks and costs ofthe Purchaser(s) including but not limited to applicability of the appropriate Holding Charges as defined in Clause 3.3 below and interest. The obligation of the Seller to offer possession to the Purchaser under this Clause shall be subject to Force Majeure. 21. The scheme of the Code provides for triggering the insolvency resolution process by three categories of persons namely, a) Financial creditor b) Operational creditor, and c) Corporate Debtor itself. 22. The procedure in relation to the Initiation of Corporate Insolvency Resolution Process by the Financial Creditor is delineated under Section 7 of the Code, wherein only Financial Creditor / Financial Creditors can file an application. As per Section 7 (1) of the Code an application could be maintained by a Financial Creditor either by itself or jointl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price and for calculating the value of any derivative transaction, only the market value of such transaction shall be taken into account; h) any counter-indemnity obligation in respect of a guarantee, indemnity, bond, documentary letter of credit or any other instrument issued by a bank or financial institution; i) the amount of any liability in respect of any of the guarantee or indemnity for any of the items referred to in sub-clauses (a) and (h) of this clause. 24. Clause (8) has been amended by the Insolvency and Bankruptcy (amendment) Ordinance, 2018 with effect from 6 th June, 2018. In view of the revised definition, any amount raised from an allottee under a real estate project shall be deemed to be an arnount having the commercial effect of a borrowing and thus will come within the definition of 'Financial Debt' under the Code. Definition of 'Financial Debt' has been amended to specifically include dues of home buyers. Amendment Act recognizes home buyers as Financial Creditor . Accordingly, the home buyers c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lt has occurred. Explanation.- For the purposes of this subsection, a default includes a default in respect of a financial debt owed not only to the applicant financial creditor but to any other financial creditor of the Corporate Debtor. (2) The financial creditor shall make an application under sub-section (1) in such form and manner and accompanied with such fee as may be prescribed. (3) The financial creditor shall, along with the application furnish- (a) record of the default recorded with the information utility or such other record or evidence of default as may be specified; (b) the name of the resolution professional proposed to act as an interim resolution professional; and (c) any other information as may be specified by the Board. (4) The Adjudicating Authority shall, within fourteen days of the receipt of the application under sub-section (2), ascertain the existence of a default from the records of an information utility or on the basis of other evidence furnished by the financial creditor under sub-section (3). (5) Where the Adjudicating Authority is satisfied that- (a) a default has occurred an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rporate Insolvency Resolution Process under the Code is maintainable. There is sufficient material on record to conclude that Respondent Corporate Debtor has committed default in repayment of the financial debt. 32. Under sub-section 5 (a) of Section 7 of the code, the application filed by the applicant financial creditor has to be admitted on satisfaction that: 1. Default has occurred. 2. Application is complete, and 3. No disciplinary proceeding against the proposed IRP is pending. 33. As a sequel to the aforesaid discussion it is seen that the applicant being a home buyer comes within the definition of Financial Creditor. The material placed on record further confirms that applicant financial creditor had disbursed the money to the Respondent Corporate Debtor as consideration for purchase of three flats. A considerable long period has since lapsed and even the principal amount disbursed has not been repaid by the Respondent Corporate Debtor. It is accordingly reiterated that Respondent Corporate Debtor has committed default in repayment of the outstanding financial debt which exceeds the statutory limit of rupees one Lakh. Besides it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 38. It is made clear that the provisions of moratorium shall not apply to transactions which might be notified by the Central Government or the supply of the essential goods or services to the Corporate Debtor as may be specified, are not to be terminated or suspended or interrupted during the moratorium period. In addition, as per the Insolvency and Bankruptcy Code (Amendment) Act, 2018 which has come into force w.e.f. 06.06.2018, the provisions of moratorium shall not apply to the surety in a contract of guarantee to the corporate debtor in terms of Section 14 (3) (b) of the Code. 39. The Interim Resolution Professional shall perform all his functions contemplated, inter-alia, by Sections 15, 17, 18, 19, 20 21 of the Code and transact proceedings with utmost dedication, honesty and strictly in accordance with the provisions of the 'Code', Rules and Regulations. It is further made clear that all the personnel connected with the Corporate Debtor, its 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 Profes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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