TMI Blog2020 (1) TMI 237X X X X Extracts X X X X X X X X Extracts X X X X ..... the respondent corporate debtor - Since the amount has been raised from the petitioner/allottee under a real estate project, petitioner being allottee/home buyer is regarded as a financial creditor in terms of Section 5(8)(f) of the Code. Petitioner gave advance to the real estate developer and thereby financed the real estate project at hand. Money that is disbursed is no longer with the allottee, but is with the real estate developer who is legally obliged to give money's equivalent back to the allottee. Not only the debt has a commercial effect of borrowings and come within the scope of 'financial debt' but also the petitioner clearly comes within the definition of 'financial creditor'. It is reiterated that the Form-1 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. It is further seen that no disciplinary proceeding is pending against the proposed IRP. Whether respondent corporate debtor has committed default in payment of the financial debt? - HELD THAT:- In the facts and as per available records, it appears that the respondent cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nagar Extension, Uttar Pradesh. 4. Believing upon the presentation by the directors of the corporate debtor, applicant made an initial payment of ₹ 1,00,000/- via cheque number 002766 dated 16.10.2015 drawn on Allahabad Bank to the respondent for booking an under-construction flat in their project 3 Dimension . 5. Subsequently the financial creditor made a further payment of ₹ 3,50,000/- for booking the under-construction flat in the project 3 Dimension , there by the total amount paid was ₹ 4,50,000/-. 6. Copy of cheques and receipts have been placed on record to show that a total sum of ₹ 4,50,000/- was disbursed to the respondent as per the following details: I. ₹ 1,00,000/- via Cheque No. 002766, dated 16.10.2015 drawn on Allahabad Bank. II. ₹ 1,00,000/- vide Cheque No. 002767, dated 05.11.2015 drawn on Allahabad Bank, Khasra No. 368, Near Bus Stand, Khera, Najafgarh, New Delhi - 110043. III. ₹ 1,50,000/- vide Cheque No. 002768, dated 02/12/2015 drawn on Allahabad Bank, Khasra No. 368, Near Bus Stand, Khera, Najafgarh, New Delhi - 110043. IV. ₹ 1,00,000/- vide Cheque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeared on 02.05.2019. The respondent was directed to deposit a sum of ₹ 20,000/- in the account of the applicant in lieu of the expenses for the substituted service and was also directed to file reply within 10 days. 13. However, respondent preferred neither to pay cost nor to file reply and even did not put in appearance on 22.05.2019. Accordingly, respondent was proceeded ex parte. On the next two dates of hearing no one appeared on behalf of the respondent. Consequently, the arguments of the petitioner were heard in the absence of respondent and the matter was reserved for orders. As the matter was uncontested, the contentions and the documents relied upon by the petitioner remained unrebutted. 14. It is pertinent to mention here that 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. 15. 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 C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrowing and (II) The expressions, allottee and real estate project shall have the meanings respectively assigned to them in clauses (d) and (zn) of Section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016) (g) 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.' (Emphasis Given) 17. Clause (8) of Section 5 of the Code has been amended by the Insolvency and Bankruptcy (Second Amendment) Act, 2018 with effect from 6th June, 2018. In view of the explanation inserted in the revised definition, it has been abundantly made clear that any amount raised from an allottee under a real e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luding the details of flat have been furnished in the application. The Allotment Agreement dated 22.05.2016 executed with the petitioner has been placed on record. Petitioner has also placed on record copies of cheques and receipts given by the respondent; in support of the disbursement of the amount to the respondent corporate debtor. 21. Since the amount has been raised from the petitioner/allottee under a real estate project, petitioner being allottee/home buyer is regarded as a financial creditor in terms of Section 5(8)(f) of the Code. Petitioner gave advance to the real estate developer and thereby financed the real estate project at hand. Money that is disbursed is no longer with the allottee, but is with the real estate developer who is legally obliged to give money's equivalent back to the allottee. Not only the debt has a commercial effect of borrowings and come within the scope of 'financial debt' but also the petitioner clearly comes within the definition of 'financial creditor'. 22. As a sequel to the aforesaid discussions the petitioner being a financial creditor can invoke Corporate Insolvency Resolution Process under Section 7 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se (b) of sub-section (5), give a notice to the applicant to rectify the defect in his application within seven days of receipt of such notice from the Adjudicating Authority. (6) The corporate insolvency resolution process shall commence from the date of admission of the application under sub-section (5). (7) The Adjudicating Authority shall communicate- (a) the order under clause (a) of sub-section (5) to the financial creditor and the corporate debtor; (b) the order under clause (b) of sub-section (5) to the financial creditor, within seven days of admission or rejection of such application, as the case may be. 24. Dealing with the ambit and scope of Section 7 of the Code in the case of Innovative Industries Ltd. v. ICICI Bank Ltd. [2017] 84 taxmann.com 320/143 SCL 625, the Hon'ble Supreme Court has observed as under: 28. When it comes to a financial creditor triggering the process, Section 7 becomes relevant. Under the explanation to Section 7(1), a default is in respect of a financial debt owed to any financial creditor of the corporate debtor - it need not be a debt owed to the applicant financial creditor. Under Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... karsh Kashyap, for appointment as Interim Resolution Professional having registration number IBBI/IPA-001/IP-P00566/2017-18/11042, resident of D-3, LGF, Lajpat Nagar Part-1, New Delhi-110024 with email-id akashyap2002@yahoo.com. Mr. Akarsh Kashyap has agreed to accept the appointment as the interim resolution professional and has signed a communication 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 proceeding is pending against him in Insolvency and Bankruptcy Board of India or elsewhere. In addition, further necessary disclosures have been made by Mr. Akarsh Kashyap as per the requirement of the IBBI Regulations. Accordingly, he satisfies the requirement of Section 7(3)(b) of the Code. 27. It is reiterated that the Form-1 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. It is further seen that no disciplinary proceeding is pending against the proposed IRP. 28. The next question comes for consideration is whether respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Code stand fulfilled. 32. As a sequel to the above discussion and in terms of Section 7(5)(a) of the Code, the present application is admitted. 33. Mr. Akarsh Kashyap, having registration number IBBI/IPA-001/IP-P00566/2017-18/110042, resident of D-3, LGF, Lajpat Nagar Part-1, New Delhi-110024 with email-id akashyap2002@yahoo.com is appointed as an Interim Resolution Professional. 34. We direct the applicant Financial Creditors to deposit a sum of ₹ 2 Lakhs with the Interim Resolution Professional namely Mr. Akarsh Kashyap to meet out the expenses to perform the functions assigned to him in accordance with Regulation 6 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Person) Regulations, 2016. The needful shall be done within three days from the date of receipt of this order by the Financial Creditor. The said amount however be subject to adjustment towards Resolution Process cost as per rules and shall be paid back to the Financial Creditor. 35. In pursuance of Section 13(2) of the Code, we direct that public announcement shall be made by the Interim Resolution Professional immediately (3 days as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cooperation to the Interim Resolution Professional as may be required by him in managing the day to day 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 would be at liberty to make appropriate application to this Tribunal with a prayer for passing an appropriate order. The Interim Resolution Professional shall be under 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, Rules and Regulations. 39. The office is directed to communicate a copy of the order to the Financial Creditor, the Corporate Debtor, the Interim Resolution Professional and the Registrar of Companies, NCT of Delhi Haryana at the earliest possible but not later than seven days from today. The Registrar of Companies shall update its website by updating the status of 'Corporate Debtor' and specific mention regarding admission of this petition must be notified to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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