TMI Blog2021 (7) TMI 985X X X X Extracts X X X X X X X X Extracts X X X X ..... ting Authority accepted that Dr. Tandon and others were not financial Creditors and that their claim was time-barred, the Adjudicating Authority could not have directed the Resolution Professional to return the money as has been directed - HELD THAT:- It is claimed in state of Madhya Pradesh in view of Section 17(1) clause f added Registration Act, 1908 document which purports or operates to effect any contract for sale of any immovable property is required to be compulsorily registered. Under Section 49 such document cannot be received as evidence of any transaction affecting the property. Dr. Tandon and others did not show copy of registered sale-deed to show that it was executed by authorized representative and thus they were not allottees of Real Estate Project. It is argued that Dr. Tandon and others could not be treated as Financial Creditors. The Adjudicating Authority erred in not considering such documents and it came to the wrong conclusion that Dr. Tandon and others could not be treated as Financial Creditors. As per the amended definition of Section 5(8) which added the Explanation, Dr. Tandon and others were required to be treated as allottees to Real Estate Proj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ady litigation was raised before the District Consumer Redressal Forum - the Adjudicating Authority rightly directed these Appellants to file their claims before the Liquidator. Appeal stands disposed with direction to the Liquidator to receive the claims made by these Appellants (if not already made) and treat the same appropriately under the provisions of law. Company Appeal (AT) (Ins.) No. 1176 of 2019 Seeking direction to set aside Liquidation order - HELD THAT:- Impugned Order shows that Section 7 of IBC Application in the matter was admitted on 14.09.2017. The Liquidation Order has been passed on 20th September, 2019. Clearly much more period than what Section 12 of IBC prescribes was consumed. The prayer of the Appellant to set aside the Liquidation Order for reasons stated against the Resolution Professional/Liquidator cannot be granted as in the set of facts Liquidation is the necessary consequence if in the time prescribed under Section 12 of IBC Resolution Plan has not become possible - As regards, averments made against the Resolution Professional/Liquidator, as IBBI which is the regulatory authority for Resolution Professionals has already been ceased of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 113/7/NCLT/AHM/2017 against the Corporate Debtor. The Application was admitted by Adjudicating Authority (National Company Law Tribunal, Ahmedabad Bench, Ahmedabad) vide Order dated 14.09.2017 and Mr. Devendra Padamchand Jain was initially appointed as Interim Resolution Professional. He later become Resolution Professional when CoC was constituted on 16.10.2017. CIRP proceeded. Later in 4th CoC Meeting held on 22.02.2018, CoC resolved for Liquidation and Application under Section 33(1) of IBC was filed by the Resolution Professional having I.A. No. 82 of 2018 for Liquidation. Vide Order dated 17th April, 2018, Adjudicating Authority directed if the parties concerned were interested they could come up with concrete proposal. CoC in 5th CoC Meeting decided to request for extension of CIRP Period for further 90 days beyond 180 days. 4. Considering above the I.A. 82 of 2018 by the Adjudicating Authority, the same was dismissed as infructuous and period of CIRP was extended. In 9th CoC Meeting dated 10.09.2018, as plans received were not viable CoC again decided to file for Liquidation and I.A. No. 376 of 2018 was filed by Resolution Professional on 25th September, 2018. I.A. N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be issued by Competent Court in pending litigation filed by the Dr. Tandon and others against the suspended management. 6. This order is challenged by J.M. Financial in Company Appeal (AT) (Ins.) No. 1219 of 2019 claiming that when the Adjudicating Authority accepted that Dr. Tandon and others were not financial Creditors and that their claim was time-barred, the Adjudicating Authority could not have directed the Resolution Professional to return the money as has been directed. 7. The Appellants in Company Appeal (AT) (Ins.) No. 1327 of 2019 are Dr Anil Kumar Tandon, Dr. Ankit Tandon and Smt. Sumati Tandon (Dr. Tandon others). These Appellants claim that the Corporate Debtor had executed Agreement to sell dated 31.03.2012 (Annexure A-3 in their Appeal). They paid entire sale consideration of ₹ 2.17 Crores to the Corporate Debtor and also paid ₹ 15,00,000/- out of which ₹ 5 Lakhs was adjusted against assured lease rental for internal financing. Their Appeal gives details of the payments made through RTGS to the Corporate Debtor between the dates of 12th March, 2012 till 31st July, 2012. Copy of Statement from State Bank of India depicting the payments, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Appeal of Dr. Tandon and others further states that when Application under Section 7 of IBC was admitted on 14.09.2017 thereafter the Corporate Debtor through promoter/director still claimed on 21.09.2017 before RERA that the Sale-deed was forged and that Mr. Amresh Pandya has no authority. The document is pointed out in the Appeal as Annexure A-14. 9. Dr. Tandon and others claimed that on 26.09.2017 they filed claims with the Resolution Professional in Form C claiming to be Real Estate Allottees for ₹ 5.53 Crores (Annexure A-15 of the Appeal) but the Resolution Professional did not communicate with them. Dr. Tandon and others claimed that Corporate Debtor and CoC moved before RERA seeking closure of proceedings due to moratorium and when RERA asked the Corporate Debtor to state on affidavit under which head money was collected the Corporate Debtor claimed thereafter that it was advance of ₹ 2.17 crores against booking in Mall from the applicants but added that the amount was received against lease of the area. Copy of the Affidavit has been filed by Dr. Tandon and others at Annexure A-16, Page 295. The Appeal of Dr. Tandon and others claims that the Adjudi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thus claim they were not clear regarding the status of their claims filed. 10. We have heard Learned Counsel for the parties. Parties in both the Appeals i.e. Company Appeal (AT) (Ins.) No. 1219 of 2019 and Company Appeal (AT) (Ins.) No. 1327 of 2019. Learned Counsel for J.M Financial claimed and argued that the Agreement of Sale dated 31st March, 2012 could not have been executed by the Corporate Debtor as there was already mortgage in favour of HUDCO and Dena Bank. The Agreement was neither sufficiently stamped nor registered document. J.M. Financial is relying on the stand taken by the Corporate Debtor before RERA that the Agreement was not signed by Authorized Representative and that the same was forged. The land was of AURA Mall mortgaged to the Financial Institution and was given to the Corporate Debtor on 30 years lease and the sale deed could not be executed; that there was only an Agreement of Sale and not a sale deed. It is claimed in state of Madhya Pradesh in view of Section 17(1) clause f added Registration Act, 1908 document which purports or operates to effect any contract for sale of any immovable property is required to be compulsorily registered. Under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty (See para 9 of Impugned Order) that J.M. Financial had communicated to the Resolution Professional that Dr. Tandon and others would not fall in the definition of Financial Creditors. Resolution Professional had placed on record extract of opinion which was given by J.M. Financial and the same has been reproduced by the Adjudicating Authority in Paragraph 9 of the Impugned Order of which Para 3.1 needs to be reproduced. The same reads as under: 3. Whether Tandons can be considered as financial creditor under the Insolvency and Bankruptcy Code, 2016. 3.1 Since the Aura Mall building was commissioned some time during December 2014, the Real Estate Regulation and Development Act, 2016 ( RERA ) would not be applicable in the present case. In view thereof, claim of Tandons to be treated as financial creditors on the basis of the explanation appended to Section 5(8)(f) of the Insolvency and Bankruptcy Code, 2016 ( IBC ) would not be sustainable as it pre-supposes the applicability of RERA (Emphasis Supplied) 14. After referring to such cases put before the Adjudicating Authority by the parties Adjudicating Authority held in para 11 of the Impugned Order that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty, must observe in the present matter that the receipt of amount by the Corporate Debtor company as an advance from the applicants, which is reflected in the balance sheet as advance to the extent of ₹ 2.17 crore does not form part of the assets of the Corporate Debtor company, because it is improper receipt of payment in the corporate Debtor company s account under a disputed Agreement to sell or without executing proper sale deed. Hence, such improper receipt of money amount to unjust enrichment or may tantamount also to crime proceed, if criminal complaints are lodged or criminal proceedings are pending against the Corporate Debtor company. Hence, the RP/Liquidator is not expected to appropriate such money to some other heads and in some other account. Hence, we are of the considered view that such amount needs to be refunded at the earliest to the proper person concerned/eligible claimant, through proper channel and it needs to be returned through the same channel and source it was received. (xiii). As there is some pending litigation between the applicant and the suspended management of the Corporate Debtor company, the RP or Liquidator to act as per the order/dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so the agreement of sale should be treated as forged. If the management can resist the RP and CoC and suppress documents and Corporate Debtor lands in stage of Liquidation and such order as above was required to be passed, we would not believe such erstwhile management and will not ignore documents being put up by Dr. Tandon and others. 17. If AURA Mall got commissioned in 2014, the agreement dated 31st March, 2012 could not be said to have been for agreement to purchase in a completed project. The contents of the Agreement to sell if perused clearly show that it related to Mall which was under consideration. The said document cannot be said to be back-dated as there are Bank Entries showing payments to the Corporate Debtor in 2012. It is surprising that before the Adjudicating Authority contents in the Financial Statements submitted by Chartered Accountant in audit of the Corporate Debtor have been ignored which clearly stated that it was application money for space booking in Aura Mall by Dr. Ankit Tandon . It is argued that under Section 17 of State of Madhya Pradesh added clause f to Sub-Section 1 require that any document which purports or operates having effect in cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under Section 5(8) by IBC (2nd Amendment Act, 2018) with effect from 06th June, 2018. Dr. Tandon and others are banking on such Agreement supported by Bank entries and entries in the audited financial statements of the Corporate Debtor. We would rely on the Application of such applicants like Dr. Tandon and others and treat Agreement to Sell as evidence lending weight to their claim made that they are allottees. While referring to the case of Dr. Tandon and others we have purposely referred in some details the averments made in the Appeal and the documents and to call back Annexure A-12 where Mr. Amresh Pandya who signed the agreement of sale sent letter to the secretary of RERA that he resigned from the services of the Corporate Debtor with effect from 26th February, 2016. The present Agreement being of 31ST March, 2012, we would discard the stand taken by the J.M. Financial and the Resolution Professional which is based on what the directors stated before RERA that Mr. Amresh Pandya was not an authorized signatory. Even Annexure A-16 shows the Company Secretary of Corporate Debtor filing affidavit before RERA that there was an advance of ₹ 2.17 Crores already appearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esolution Professional outright refused to look into the document of Agreement to Sell which was coupled with huge amounts admittedly received in accounts of Corporate Debtor and reflected in Audited Returns. We hold that the Appellants in Company Appeal (AT) (Ins.) No. 1327 of 2019 should have been treated as Financial Creditors and their claim should have been admitted by Resolution Professional who is now Liquidator. We are not reversing any of the stages of the CIRP or Liquidation. The Liquidator (then Resolution Professional) will treat the Appellants of Company Appeal (AT) (Ins.) No. 1327 of 2019 as Financial Creditors in view of the definition under Section 5(8) Explanation of IBC. The Appellants in Company Appeal (AT) (Ins.) No. 1327 of 2019 are at liberty to request the Liquidator to act on the claim as they had filed during the period of CIRP or they may submit their fresh updated claim with the Liquidator under Regulation 18 of Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. The Liquidator is directed to receive the same and act according to law. 22. For the above reasons, the Impugned Order dated 18.09.2019 in Company Appeal (AT) (In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the shop to the Appellant No. 2 and Appellant No. 2 had sought refund of the advance given as security deposit. Appellant No. 2 filed dispute in District Consumer Redressal Forum and the Forum directed refund of the advance made with costs of the complaint. Appellant No. 2 also claims that on initiation of CIRP on suggestion of Respondent No. 2 RP/now Liquidator asked her to file claim as Operational Creditor. Thereafter Appellant No. 2 claims to have filed I.A. 483 of 2019 before the Adjudicating Authority to treat her as Financial Creditor under Section 5(8)(f) of the IBC which was I.A. 483 of 2019 copy of which is filed at Annexure A-6. Appellant No. 2 also claims that without deciding the I.A. 479 of 2019, the Impugned Order of Liquidation was passed. 25. Appellant No. 3- Mr. Laxman Narayan claims that Corporate Debtor entered into a registered lease deed dated 21st February, 2011 with the Appellant No. 3 and the lease-deed was for 30 years. Appellant No. 3 paid premium of ₹ 21 Lakhs for the shop and the document of lease deed is at Annexure A-7. Even this Appellant states that the Corporate Debtor then required the Appellant No. 3 to lease back the shop to Corporate D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Allottee under the RERA we have already reproduced above. Considering the definition of allottee, we are unable to accept Appellant Nos. 1 and 3 as Financial Creditors. As regards the Appellant No. 2, it is only a claim for return of security deposit for which already litigation was raised before the District Consumer Redressal Forum. 27. For such reasons, it appears to us that the Adjudicating Authority rightly directed these Appellants to file their claims before the Liquidator. 28. Company Appeal (AT) (Ins.) No. 1203 of 2019 stands disposed with direction to the Liquidator to receive the claims made by these Appellants (if not already made) and treat the same appropriately under the provisions of law. Company Appeal (AT) (Ins.) No. 1176 of 2019 29. This Appeal has been filed by the Appellant claiming to be Operational Creditor of the Corporate Debtor-Sandhya Prakash Ltd. The Appeal has been filed against the Impugned Order dated 20.09.2019 passed in I.A. 376 of 2018 in CP (IB) 113/7/NCLT/AHM/2017 vide which Liquidation of the Corporate Debtor was ordered by the Adjudicating Authority as mentioned above. The whole Appeal has various particulars making out grievanc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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