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TMI Blog2019 (9) TMI 1616X X X X Extracts X X X X X X X X Extracts X X X X ..... ts (India) Private Limited, who is stated to be the corporate debtor. 2. The Petitioners are an allottee of a real estate project. The petitioners are ex-facie financial creditors in terms of the provisions of Section 5(8)(f) and explanation inserted by the Second Amendment Act, 2018 w.e.f. 06.06.2018. The challenge to the aforesaid amendment has been repelled by Hon'ble the Supreme Court in the judgment rendered in the case of Pioneer Urban Land and Infrastructure Limited and Another v. Union of India & Ors. (Writ Petition (Civil) No. 43 of 2019, decided on 09.08.2019). Therefore, no doubt is left that the petitioners are Financial Creditors. 3. The Respondent company-the Corporate Debtor, Rajesh Projects (India) Private Limited (CIN U45201DL1999PPC101984) was incorporated on 14.10.1999 under the provisions of the Companies Act, 1956. The registered office of the respondent corporate debtor is situated at 1601, RG Trade Tower, Plot No. B7, Netaji Subhash Place, Pitampura, New Delhi-110034. Its authorized share capital is Rs. 16,00,00,000/- and the paid up share capital is Rs. 10,58,24,000/- which is based on the details given in master data placed before us (Annexure P- 12). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2015 and Tower A, F & M by 31st March, 2016, which may vary by + 3 months. Thereafter, the Company shall offer the possession of the said Apartment to the Allottee, subject to the terms and conditions of this Agreement. In case of delay except due to Force Majeure conditions and due to the reasons mentioned in Clause 11 (b) and (c), herein below in completion of the construction of the said Apartment, the Company shall pay compensation @ Rs. 10/- per sq. Ft. per month of the built up area of the said Apartment to the Allottee, which both the parties agree a just ad equitable estimate of the damages that the Allottee, which both the parties agree a just and equitable estimate of the damages that the Allottee may suffer. The Allottee agrees that he shall have no other rights/ claims whatsoever, provided that Allottee is not in breach of any of the term of this Agreement. The adjustment of such compensation shall be done at the time of execution of the Sub-Lease deed." 7. However even after expiry of sufficient long time possession of the said Residential Apartments have not been handed over to the petitioners. Copies of statement of bank accounts of the Financial Creditors where de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. The other argument raised by Mr. Kohli is based on definition of expressions 'default', 'debt' and 'claim' as given in Section 3 (6), 3 (11) & 3 (12) of the Code. According to the learned counsel 'default' would mean non-payment of a debt whole or any part or instalment of the amount of debt, which means a liability or obligation in respect of a claim which is due from any person. According to the learned counsel expression 'claim' would necessarily mean a right to payment or right to remedy for breach of contract. The argument seems to be that firstly there is no debt and it was a transaction of sale and purchase of apartment. The argument is wholly unfounded because for Corporate Insolvency Resolution Process Part-II (chapter-I) has been carved out and in Section 5 (8) (f) of the Code the expression 'financial debt' has been defined to mean a debt along with interest, which is disbursed against the consideration for the time value of money and includes any amount raised under any other transaction including the sale or purchase agreement, which has commercial effect of a borrowing. The explanation has clarified that any amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... then the principle of harmonious construction, as laid down in the Pioneer Urban Land and Infrastructure Limited (supra), has to be applied and the timeline given by Authorities under RERA has to be respected. In that regard reliance has also been placed on Rules 15 and 16 of the Real Estate (Regulation and Development) Rules as quoted by Hon'ble the Supreme Court in para 50. However, we find that the aforesaid argument lacks content and the obligation undertaken in the Apartment Buyer's Agreement dated 04.11.2012 could not be abrogated. The obligation assumed under the Apartment Buyer's Agreement required that the construction was to be completed in Tower A, F & M by 31.03.2016. There was an addition of three months which would bring it to June, 2016. Mr. Kohli argued that the expression 'endeavour' used in clause 1 1 (a) which provide for Schedule to deliver possession of the Apartment would not mean that there is a positive commitment and a reasonable construction has to be adopted. According to the learned counsel time is also not essence of the contract for sale of immovable property and has placed reliance on the Constitution Bench judgment of Hon'bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lvency Resolution Process by a Financial Creditors stand fulfilled and other conditions prescribed by Rule 4 (1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. It is further submitted that the details of default along with its dates have been clearly stated in part IV along with all the minute details. There is overwhelming evidence to prove default. The name of the resolution professional has also been specified. 15. We may now examine the provisions of Section 7 (2) and Section 7 (5) of IBC which read as under:- "Initiation of corporate insolvency resolution process by financial creditor. 7 (1) .................................... 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. 7 (3) .................................... 7 (4) .................................... 7 (5) Where the Adjudicating Authority is satisfied that - (a) a default has occurred and the application under sub-section (2) is complete, and there is no disciplinary proceedings pending against the proposed resolution professional, it may, by order, admit such applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are imposed which must be followed by all and sundry: "(a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; (b) transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein; (c) any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; (d) the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor." 21. It is made clear that the provisions of moratorium shall not apply to (a) such transactions which might be notified by the Central Government in consultation with any financial regulator; (b) a surety in a contract of guarantor to a Corporate Debtor. Additionally, the supply of essential goods or services to the Corporate Debtor as may be specified i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithin three days from the date of receipt of this order by the Financial Creditors. The amount however be subject to adjustment by the Committee of Creditors. The amount must be accounted for by Interim Resolution Professional and shall be paid back to the Financial Creditors. 25. Before parting we must notice the complaint made against Financial Creditors in the form of discrepancies in the statement of account. We cannot in summary proceedings determine the amount due. This function is required to be performed by the Information Utility which is not yet fully functional. Therefore, Resolution Professional may ask the ex-promoter/ director of the Corporate Debtor for any such correction if need be and act accordingly by placing it before the Financial Creditors as it is only fair to do so. 26. The office is directed to communicate a copy of the order to the Financial Creditors, the Corporate Debtor, the Interim Resolution Professional and the Registrar of Companies, NCR, New Delhi at the earliest 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 admissi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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