TMI Blog2020 (4) TMI 679X X X X Extracts X X X X X X X X Extracts X X X X ..... n support of first Option, the claim in question justified so as to take it as legally liable to pay. Therefore, the Petitioners failed to prove that they are entitled to recover Debt in question, in terms of Agreements in question. Whether the instant Petition is filed with an intention to recover alleged outstanding amount after receiving principle amount in question in full or to initiate CIRP on justified grounds? - whether the Respondent is insolvent/solvent Company; whether the Petitioners approached the Tribunal with clean hands with bona fide intention? - HELD THAT:- The Petitioners have admittedly received Principle amount in full with no element of interest mentioned in the Agreements in question. And the instant Petition is filed under the guise of provisions of Code, with an intention to recover the difference between principle amount and buy back payments as referred to in Agreements in question and also unilaterally imposing condition of interest for failure to pay difference of amount. It is settled position of law that provisions of Code cannot be invoked as a substitute for debt enforcement or recovery-proceedings. The Proceedings contemplated under the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ving its registered office 4th Floor, 'Orbis', PID No. 76-15-61, 2nd Cross, Residency Road, Bengaluru - 560 025. Its Authorised Share Capital is ₹ 5,00,00,000/- (Rupees Five Crores Only) and Paid-up Share Capital is ₹ 2,35,32,250/-(Rupees Two Crores Thirty Five Lakh Thirty Two Thousand Two Hundred and Fifty Only). (3) It is stated that one Smt. Munna Bai and others, the owners of the immovable property bearing Survey Nos. 47/1A, 47/2A, Corporation No. 47/48-4 and presently bearing New Municipal No. 4 with Unique property ID No. 64-139-4 measuring 1 Acre 27 guntas under the jurisdiction of BBMP, situated at 64th Ward, Madiwala Range, 9th Block, Jayanagar, Banneerghatta Road, Bangalore conferred the development rights of the aforesaid property to the Respondent vide and Agreement for Development and Marketing dated 15-5-2003 registered in the office of the Sub-Registrar, Bangalore (Urban) District. (4) When the Respondent was looking out for investors to fund/finance the project for the development of the aforesaid property, the Respondents after being convinced, decided to invest in the project with buy back promises and arrangements. Accordingly, the Petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 27-6-2015 for each of the apartment is mentioned below: Sl. No. Apartment Buy back Price 1 6C ₹ 3,75,36,000 2 6D ₹ 4,81,92,000 3 7C ₹ 3,69,24,000 Total Amount ₹ 12,26,52,000 (7) It is stated that the Petitioners, after completion of the 3 year waiting period stipulated under the buy back agreement dated 27-6-2015, have exercised the first option available to him under clause V (a) of the buy back agreements in the first week of August 2018, and made an offer to the Respondent Company to buy back the said apartments and pay the minimum reserved price as agreed for the said apartments. Due to repeated requests made by the Petitioners, the Respondent made a payment of an amount of ₹ 3,00,00,000/- (Rupees Three Crores only) on 1-1-2019 by way of RTGS with transaction reference No. 000000003245 at HDFC Bank, Kasturba Raod, Branch in the Account of the Petitioners i.e., Mr. R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dinary and imaginative spaces created out of deep customer focus and insight. (2) It is stated that the Code was further amended as per I B code (Amendment) Ordinance 2019 published on 28th December 2019. The said Ordinance came into force on 28th December 2019. Therefore, the Petition itself is not maintainable as they failed to satisfy the conditions mentioned in the said amendment. (3) It is solvent and profit-making entity and its revenue and profit over the last three years is as follows: Sl. No. Year (F.Y) Revenue (in INR) Profit before tax in INR) 1. 2016-17 2,78,89,711 96,16,532 2. 2017-18 1,60,44,607 1,05,93,491 3. 2018-19 6,57,64,421 1,89,13,161 The Respondent project is worth over ₹ 300 crore and it has fixed assets in the form of machinery and unsold inventory worth over 90 crore, and also has income yielding assets to meet its operational expenses. It has not taken any furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 6C ₹ 3,75,36,000/- 2 6D ₹ 4,81,92,000/- 3 7C ₹ 3,69,24,000/- It is stated the clause V (a) of the agreement states that the minimum buy back price is ₹ 1,62,36,928/- (Rupees One Crore Sixty Two Lakh Thirty Six Thousand Nine Hundred and Twenty Eight). Further stated that the Petitioners contended that the minimum buy back price for apartment 6D is ₹ 4,81,92,000/-. The difference between the two amount is ₹ 3,19,55,072/-. Accordingly, the claim of the Petitioners is also significantly reduced. It is alleged that the Petitioners have made a false and malicious claim with mala fide intention to cause deliberate harm to the Respondent. Subsequent to the return of ₹ 4,13,34,068/- the agreement to sell and constructions agreement are deemed to have been cancelled. Further stated that the Petitioners are not homebuyers. (8) It is stated that there is a significant dispute in the claimed amount, which can be determined and adjudicated only in a trial. The Petitioners are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate is undergoing a slump. All real estate companies are facing delays in completion and delivery of projects. The real estate sector is also facing severe financial crunch. The markets and the real estate industry in general is still coming to terms with the new regulatory regime. In light and despite these unfavourable circumstances and environment, the Respondent has been remarkably been able to complete most of the projects and is shortly expecting capital infusion into this project. The Petitioner No. 1 spent considerable time in various capacities in the finances and real estate sector. The Petitioner is on the Board of few well known real estate companies. He is very well aware of the market situation and the problems faced by the stakeholders. Knowing well about the business of Real Estate Sector, the Petitioners have initiated the instant proceedings against the Respondent with an ulterior intention and only to cause reputational damage to the Respondent. Therefore, they have urged the Adjudicating Authority to dismiss the Petition. 4. Heard Mr. Sanjay Nair, learned Counsel for the Petitioners, and Mr.Shyam Sundar.H.V., learned Counsel for the Respondent. We have carefu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... smiss the instant Petition. 7. Before adverting the issue of debt and default question, it is necessary to refer relevant terms mentioned in three Agreements even dated 27-6-2019, Clause V; It is clearly agreed to between the parties that as on 5th August 2018, in spite of the fact whether the project has achieved the practical completion or not, the Second Party shall have the absolute discretion to exercise the following options: a. Option to offer the Schedule B property and the Schedule C Residential Apartments to the First Party for a buy back after completion of three (3) years from the date of commencement of the project, at a minimum price (hereinafter referred to as the minimum buy back price) of ₹ 3,75,36,000/- in which event, the First Party shall be bound to accept the offer made by the Second Party and effect as a one-time payment for the same within a period of 60 days from the date of offer made against which, the said agreements to sell and the constructions agreements will be cancelled or assigned in favour of person/s identified by the First Party. b. It is further agreed to between the parties that in case the Second Party exercise the option ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rence of buy back price in the absence of mentioning about payment of interest. Moreover, once the Respondent exercised first Option, the Sale Agreements in question also stands cancelled and any dispute arise out of first option, the Party has to invoke provisions of Specific Performance Act, 1963 as per clause VIII to enforce the terms of Agreements in question. 8. As per general clause V of the Agreements in question, one of the options available to the Petitioners is to offer the scheduled Property to the Respondent to Buy Back the Flats in question at minimum price mentioned therein. In the event, the Petitioner exercise first option, the Respondent is bound to accept the offer and thus pay such amount as a one-time payment within a period within a period 60 days from the date of offer and resultantly the Constructions Agreements and Agreements to sell in question stand cancelled or to be assigned in favour of persons identified by the Respondent. And as per clause VI of the Agreements, Agreements to sell and Constructions should be ready together for interpretation. However, the Petitioners have not placed any document(s) to show that they have exercised such option except ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... you chose to speak to me when I have done no wrong. Ou please ask yourself on your heart whether I deserve such a treatment. (b) Email dated 5-3-2019 (Page 187 Annexure -0) reads as under: Dear Mr. Bhaskar, I am referring to my mail of 14th January on the above subject. You are kindly aware of that the discussions we are having on the above subject. You are also aware that I spoke to you on the subject and you requested for some more time. Finally unilaterally decided that you will pay the amounts that were due as per options in respect of two flats, first one on Jan 2nd 2019 and the second one on 2nd March 2019. You have paid so far only 3 crore and the balance is yet to be paid. Now as per your commitment you have to pay all the amount due in respect of two flats by 2nd March 2019. What is the status? Last time when we spoke, you had mentioned that you will clear all the amounts due well before 2nd march as you have finalized the sale of your office. I have not heard anything from you so far. I am sure you may receive the sale proceeds of your premises. It nearly 9 months that the amounts have become overdue and I greatly appreciate if you please arrang ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -2019. Admittedly, there is no interest mentioned in the Agreements in question. However, the Petitioners added interest too unilaterally. Another material blunder committed in making claim in the instant Petition is that though buy back price mentioned in the Agreement for Residential Apartment bearing 6 D was mentioned as ₹ 1,62,36,928/, it was wrongly claimed ₹ 4,81,92,000/which is the price fixed for second option. There is no mention of interest either in the Agreements or Agreement to sale and Development Agreement. However, interest for ₹ 12,19,768/- was claimed @ 18 p.a without mentioning it in Agreements and unilaterally. So the claim made in the Petition is not made even as per Agreements in question and debt itself is disputed. The Petitioners have not exercised their option in the first instance to claim further amounts that too after accepting principal amount in total. Even as per Agreements in question, there are two options for the Petitioners either to offer Flats to Respondent itself or to any other third party subject to agreed price or to get registered the Flats in question in their names. There is no rationale in fixing buy back price and it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such dispute? If any one of aforesaid conditions is lacking, the application would have to be rejected. 12. As stated supra, the Respondent Company is admittedly solvent and profit and reputed Company, having successfully executed 25 projects across South India, and the Project B B Opulent Spire, the current project of the Respondent Company, in which the Petitioners have invested three Flats, as detailed, is stated to be one of the most innovative and ambitious real estate projects in. Bengaluru, constructed at the heart of one of the busiest and hi-profile areas in Bangalore. The project is a 24-storey structure with 86 apartments that embodies every nuance of an elite lifestyle. And the project is almost completed and the structure of the building is complete and interiors are ongoing to be completed. Therefore, the Petitioners have the second option to get Flats registered in their name as per the Sale Agreement. However, the Petitioners choose to receive Principle amount in full and raising various claims contrary to what they are legally entitled as per the Agreements in question and that too without following the terms and conditions of Agreements in question. Moreov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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