TMI Blog2020 (2) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... cumstances of the case, we are not imposing such penalty on 1st and 2nd Respondents, who even in presence of this Appellate Tribunal refused to accept the money in terms of the Agreement and also refused to take possession of the flat. The application preferred by 1st and 2nd Respondents under Section 7 of the I B Code is dismissed - The appellant Corporate Debtor (company) is released from all the rigours of Moratorium and is allowed to function through its Board of Directors from immediate effect. - Company Appeal (AT) (Insolvency) No. 864 Of 2019 - - - Dated:- 22-1-2020 - S.J. Mukhopadhaya, Chairperson, A.I.S. Cheema, Judicial Member And Kanthi Narahari, Technical Member Salman Khurshid, Abhijeet Sinha, Saurabh Kalia, Ms. Amna Darakhshan, Ms. Saloni Purohit, Saikat Sarkar, Kamesh Ved, Rohan Mazumdar and Aditya Shukla, for the Appellant. Arvind Nayar, Arunav Patnaik, Ms. Mahima Sinha, Ms. Shikha, Ms. Anandini Kumar, Neeraj Sharma, Samarjit, Rohan, Ms. Malika, Ms. Bomita Singh, Ms. Aparjita, Piyush Singh, Aditya, Sanajeet Patnaik, Setyan Chaturvedi, Vikas, Sumit Malhotra, Sukrit Kapoor, Advs. and Arvind Nayar, for the Respondent. JUDGMENT Sudhansu J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ite of repeated request to take possession, the allottees have refused to take possession. 7. It was also brought to the notice of the Adjudicating Authority (National Company Law Tribunal) that the Corporate Debtor had filed a Writ Petition before the Hon ble Supreme Court of India challenging the onstitutional validity of explanation to Section 5(8)(f), Section 7, Section 21(6A)(b) and Section 25A of the I B Code , Raheja Developers Limited Anr. v. Union of India Ors. [W.P. (Civil) No. 173 of 2019] . It was filed against the Company Petition preferred by allottees in CP No. (IB) 1321 (PB) of 2018. The said Writ Petition was listed before the Hon ble Supreme Court on 18th February, 2019 on which date, the Hon ble Supreme Court while issued notice stayed further proceedings before the Adjudicating Authority. 8. In spite of the same and without taking into consideration the decision of the Hon ble Supreme Court in Pioneer Urban Land and Infrastructure Limited Anr. v. Union of India Ors. (2019) SCC OnLine SC 1005 , the impugned order was passed on 20th August, 2019. 9. The Corporate Debtor brought to the notice of the Adjudicating Authority that as per the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondents to which the Respondents have kept silent before the Adjudicating Authority. 14. Along with the notice of possession dated 15th November, 2016, the Corporate Debtor also annexed a Demand Letter seeking payment of an outstanding amount of ₹ 8,62,851/- which they defaulted to pay and was deliberately suppressed by the Respondents before the Adjudicating Authority. 15. The aforesaid fact was brought to the notice of the Adjudicating Authority. However, the allottees sought for a refund of the entire amount of ₹ 86,62,691/- along with an interest at the rate of 18% p.a. making the total amount of interest comes to ₹ 87,32,108.05/- which was even higher than the actual principal amount paid by the Respondents- allottees. 16. It was further submitted that the Judgment was pronounced by the Hon ble Supreme Court on 9th August, 2019, staying the order of the Adjudicating Authority. Till 20th August, 2019, the Adjudicating Authority had not passed final order in view of the stay of the Hon ble Supreme Court. Thereafter, no hearing and argument ever took place between the order dated 21st February, 2019 passed by the Adjudicating Authority and the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per annum whereas Clause 5.2 relates to Compliance of Rules, Regulations and By-laws . 23. As per Clause 4.1 of Article-4, which is Condition-precedent , the Allottee shall before taking possession of the Apartment must clear all the dues towards the allotted Apartment and have the Conveyance Deed for the said Apartment executed in his favour after paying Registration fee/ charges, stamp duty and other charges/ expenses. 24. Clause 4.2 of Article-4, as noticed above, deals with possession time and compensation which is subject to Force Majeure as stated in Clause 4.4. 25. As per Clause 4.4 of Article-4 ( Force Majeure ), construction/ continuation/ completion of the building/ complex is subject to Force Majeure Conditions which inter alia include delay on account of non availability of steel and/ or cement or other building materials or water supply or electric power or slow down, strike, lock out or due to any dispute with the construction agency employed by the Company, nonavailability of necessary infrastructure facilities being provided by the Government for carrying development activities, pollution clearances, court injunction, civil commotion or by reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall be entitled to obtain the information relating to sanctioned plans, layout plans along with the specifications, approved by the competent authority and such other information as provided in this Act or the rules and regulations made thereunder or the agreement for sale signed with the promoter. (2) The allottee shall be entitled to know stage-wise time schedule of completion of the project, including the provisions for water, sanitation, electricity and other amenities and services as agreed to between the promoter and the allottee in accordance with the terms and conditions of the agreement for sale. (3) The allottee shall be entitled to claim the possession of apartment, plot or building, as the case may be, and the association of allottees shall be entitled to claim the possession of the common areas, as per the declaration given by the promoter under sub-clause (C) of clause (I) of sub-section (2) of section 4. (4) The allottee shall be entitled to claim the refund of amount paid along with interest at such rate as may be prescribed and compensation in the manner as provided under this Act, from the promoter, if the promoter fails to comply or is unable to giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordance with the terms of agreement for sale or due to discontinuance of his business as a developer on account of suspension or revocation of his registration under the provisions of the Act. 30. As per sub-section (6) of Section 19 of the RERA, every allottee, who has entered into an agreement or sale to take an apartment, plot or building, as the case may be, under Section 13, is responsible to make necessary payments in the manner and within the time as specified in the said agreement for sale and is also required to pay at the proper time and place, the share of the registration charges, municipal taxes, water and electricity charges, maintenance charges, ground rent, and other charges, if any. 31. In terms of sub-section (7) of Section 19 of the RERA, the allottee shall be liable to pay interest, at such rate as may be prescribed, for any delay in making payment towards any amount or charges to be paid under sub-section (6). 32. In terms of sub-section (10) of Section 19 of the RERA, it is also the duty of the allottee to take physical possession of the apartment, plot or building as the case may be, within a period of two months of the occupancy certificate issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RERA, but wants to jump ship and really get back, by way of this coercive measure, monies already paid by it. Given the above, it is clear that it is very difficult to accede to the Petitioners contention that a wholly onesided and futile hearing will take place before the NCLT by trigger-happy allottees who would be able to ignite the process of removal of the management of the real estate project and/or lead the corporate debtor to its death. 34. As per the aforesaid decision of the Hon ble Supreme Court, the Corporate Debtor can refer to Section 65 and point out that insolvency resolution process has been invoked fraudulently, with malicious intent, for any purpose other than the resolution or insolvency. 35. The Real Estate developer may do so by pointing out, for example, that the allottee who has knocked at the doors of the NCLT is a speculative investor and not a person who is genuinely interested in purchasing a flat/ apartment. The Developer can also point out that in a Real Estate market which is falling, the allottee does not, in fact, want to go ahead with its obligation to take possession of the flat/ apartment under RERA, but wants to jump ship and really ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnment as noticed by the Adjudicating Authority, for that the Corporate Debtor cannot be made responsible. The occupation certificate by the Government/ Central Government/ Competent Authority not given within time as specifically pleaded by the Appellant and the Corporate Debtor before the Adjudicating Authority and not denied by the 1st and 2nd Respondent, it squarely comes within Clause 4.4 of the Flat Buyer s Agreement (Force Majeure). 43. Learned counsel for the Appellant submitted that there was order of stay passed by the National Green Tribunal for which the Corporate Debtor cannot be blamed if there is a delay in non-completion. 44. All the facts aforesaid clearly show that the 1st and 2nd Respondents, in spite of offer of flat, wanted refund of the amount with more interest and refused to take the actual amount in terms of agreement. 45. The aforesaid facts also make it clear that the 1st and 2nd Respondents filed the application under Section 7, fraudulently with malicious intent for the purpose other than for the resolution or liquidation and they knocked at the doors of the Adjudicating Authority for refund of money and not for the Flat/ premises and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Judgment, it is desirable to refer some of the development. 50. Taking into consideration the fact that many of the allottees are filing applications under Section 7 fraudulently or with malicious intent for any purpose other than for the resolution of insolvency, or liquidation, the Hon ble President of India has recently promulgated an Ordinance further making amendment in the Insolvency and Bankruptcy Code, 2016 by published in the Gazette of India extraordinary Part II- Section 1 dated 28th December, 2019. 51. In Section 7 of the principal Act, in sub-section (1), before the Explanation, the following provisos have been inserted:─ Provided that for the financial creditors, referred to in clauses (a) and (b) of sub-section (6A) of section 21, an application for initiating corporate insolvency resolution process against the corporate debtor shall be filed jointly by not less than one hundred of such creditors in the same class or not less than ten per cent. of the total number of such creditors in the same class, whichever is less: Provided further that for financial creditors who are allottees under a real estate project, an application for initiati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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