TMI Blog2022 (11) TMI 294X X X X Extracts X X X X X X X X Extracts X X X X ..... equence of the events and the various proceedings taken with regard to Project in question by the Homebuyers as well as by the Corporate Debtor, indicate that CIRP initiated by the Operational Creditor by filing Section 9 Application was for purposes other than for the resolution of insolvency. The reason given by Adjudicating Authority for rejecting argument of Section 10A was based on alleged acknowledgement letter dated 03.06.2021 received from the Corporate Debtor. When the date of default given by Operational Creditor in Section 9 Application is 31.03.2020, the mere fact that acknowledgement has been given by Corporate Debtor on 03.06.2021 accepting the debt, shall not change the date of default - the reasons given by the Adjudicating Authority that since acknowledgement is 03.06.2021, the date of default will become 03.06.2021 is not agreed upon. The Adjudicating Authority itself formed an opinion that it has prima facie satisfied that Application is barred by Section 10A and thereafter time was granted by the Adjudicating Authority to file additional affidavit. The additional affidavit gives only explanation of letter by the Corporate Debtor acknowledging the debt date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpada Livia Apartments was formed on 29.11.2018 Registration of Certificate was also obtained. (ii) There being delay in completion of the Project, Homebuyers of the Project approached the Real Estate Regulatory Authority (hereinafter referred as RERA ) under Real Estate (Regulation and Development) Act, 2016 by filing a complaint. RERA conducted an inspection of the Project site on 18.02.2019 and found that only 10% of the work has been started and from March 2016 work was abandoned. The erstwhile Promoter was lodged in jail since 04.01.2019. An email dated 04.08.2019 was sent by the Corporate Debtor addressing buyers that the Corporate Debtor has handed over the Project to M/s. Rudra Buildwell Constructions Pvt. Ltd. and has also transferred all the shares for expeditious completion of the Project. (iii) The RERA passed an order on 30.09.2019 after issuing a Show Cause Notice to the Corporate Debtor, cancelling the registration of the Project. The order contemplated further proceeding for completion of the remaining construction work. The RERA issued a public notice on 07.12.2019 calling upon Association of Allottees to submit a viable proposal for completion of the remain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he date of default mentioned in the Application was 31.03.2020. (vii) The Application came for consideration before the Adjudicating Authority on 12.01.2022. The Adjudicating Authority being prima facie of the view that date of default being 31.03.2020, the Application is hit by Section 10A, permitted the Counsel for the Operational Creditor to file an additional affidavit within two weeks. An additional affidavit was filed by the Operational Creditor. Thereafter, notice was issued to the Corporate Debtor. The Corporate Debtor neither filed any reply to Section 9 Application nor appeared before the Adjudicating Authority. The Adjudicating Authority proceeded ex-parte on 22.03.2022 against the Corporate Debtor. The Adjudicating Authority heard the Counsel for the Operational Creditor and vide order dated 18.04.2022 admitted Section 9 Application and appointed Mr. Prabhat Ranjan Singh as Interim Resolution Professional ( IRP ). (viii) The Company Appeal (AT) (Insolvency) No.642 of 2020 was filed by the Appellant challenging the order dated 18.04.2022. In the said Appeal, this Tribunal issued notice on 06.06.2022 and granted two weeks time to file reply. (ix) The IRP filed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same. Initiation of Corporate Insolvency Resolution Process ( CIRP ) by Operational Creditor was not for any purpose of insolvency resolution, but was with an object to defeat the rights of the Appellant. It is submitted that Application under Section 9 was not a genuine Application. The invoices filed in support of Section 9 Application were all cooked-up invoices manufactured for the purpose of the case. The entire transaction forming basis of Section 9 Application pertains to the period August 2019 to 31.5.2021, during which period Shri Raj Kumar, Chairman of the Operational Creditor had already joined the Board of Director of the Corporate Debtor and owned 99.75% shares of the Corporate Debtor. The Project having been de-registered by order dated 30.09.2019 and the Project having been handed over to the Appellant vide order dated 26.06.2020, there was no occasion for Corporate Debtor entering into any transaction with the Operational Creditor and all claims by the Operational Creditor of supplying material and security were fictitious and non-existent. The Operational Creditor has not filed any GST invoices along with Section 9 Application. The proforma invoices filed do not m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Ltd., opposing the submission of learned Counsel for the Appellant contends that Application under Section 9 was for genuine debt. The Operational Creditor has supplied materials, security services and plant machinery for which proforma invoices and gate passes have been filed. It is submitted that proforma invoices are issued at the time of work being carried out and thereafter while raising final invoices, GST payments are made. Non-mention of GST number and amount is inconsequential. The Sainik Security Bureau has given acknowledgement for receipt of amount of Rs.28,23,000/- from the Operational Creditor relating to security services provided from April 2019 to June 2021 at the site of Corporate Debtor, which are supported by Bank transactions, proforma invoices. Regarding materials supplied and gate passes invoices have been filed along with Section 9 Application, which prove the genuine debt claimed by the Operational Creditor. Ledger of M/s PSA IMPEX Private Limited as maintained by M/s. Rudra Buildwell Constructions Pvt. Ltd. has also been filed, which mentions closing balance of Rs.3,41,22,413/-. It is submitted that Appellant has no locus to challenge the order admittin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was going on and also only 10% structural work was completed. In compliance of the order passed by RERA, the Chief Executive Officer, Greater Noida Authority got conducted audit of the project, where Report was submitted that diversion of Rs.47 crores was made by the Promoter, out of funds received from the allottees. Before the RERA, the Promoter in explanation has stated that they have managed to get association of M/s. Rudra Buildwell Constructions Pvt. Ltd., who is going to get the Project complete. A finding was recorded by RERA in its order dated 30.09.2019 that funds deposited by the allottees were used elsewhere and forgery has been found to be committed by the Promoters. RERA vide its order dated 30.09.2019 has cancelled the registration of the Project. Against the order passed by RERA dated 30.09.2019, an Appeal was filed by the Corporate Debtor through its Authorised Signatory. The Authorised Signatory, who filed the Appeal is none else than Mr. Raj Kumar, through whom Section 9 Application was filed by the Operational Creditor. After dismissal of the Appeal by the RERA Appellate Authority, Second Appeal was filed in the High Court by Corporate Debtor through Mr. Raj Kum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellate Tribunal and the High Court. The orders passed by RERA for handing over Project to the Appellant was also challenged by the Corporate Debtor and the Corporate Debtor failed to assail the order passed by the RERA by which registration was cancelled and Project was handed over to the Appellant. Mr. Raj Kumar, the owner of M/s. Rudra Buildwell Constructions Pvt. Ltd. filed Section 9 Application claiming unpaid debt. 12. The facts of the present case make it amply clear that object of filing Section 9 Application by the Operational Creditor was not for resolution of insolvency of Corporate Debtor, but was an attempt to stop the implementation of RERA order and to take back the Project from the Appellant. Mr. Raj Kumar, the Director of M/s. Rudra Buildwell Constructions Pvt. Ltd. has been challenging the orders passed by the RERA in First Appeal and Second Appeal on behalf of the Corporate Debtor. The Operational Creditor, thus, Mr. Raj Kumar, who has filed Section 9 Application as Director of M/s. Rudra Buildwell Constructions Pvt. Ltd. has clearly identified himself with the Corporate Debtor and was espousing the cause of the Corporate Debtor by challenging the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lear that the invoices, which have been filed are only proforma invoices, claimed to be prepared on one day, i.e. 31.03.2020 bears the date of 31.03.2020 and contains the particulars of various materials supplied from 25.08.2019 to 19.01.2020. Proforma invoices are prepared in one day. The proforma invoices do not contain any GST number. The Central GST Act, 2017 requires to issue tax invoices with description of quantity, value of goods and tax charged thereon. The Rules framed under Central GST Act also require mentioning of particulars of name and address and goods and services tax identification number of the supplier and the invoices are required to be issued within a period of 30 days of supply of service. Similar are the provisions of UP GST Act. The invoices are not claimed to have been issued within one month from the date of supply of goods, material or services and also not mentions the GST number or amount of tax, which proves the contention of the Appellant that they have been prepared for the purposes of the case. (ii) The ledgers of Corporate Debtor maintained by M/s. Rudra Buildwell Constructions Pvt. Ltd. indicate that ledgers are not prepared in an ordinary cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional Creditor has claimed the amount from August 2019 to May 2021. When work of the Corporate Debtor was found stopped in February 2019 and the complaints were filed before RERA that no work is being undertaken since 2018 and thereafter inspection was conducted, we are inclined to accept the submission of the Appellant that neither any material was supplied by the Operational Creditor to the Corporate Debtor nor any work was undertaken by the Corporate Debtor during the period, when it is claimed that materials were supplied and services were provided. Inspection Report dated 21.02.2019 have been brought on record, which is at Annexure A-16 in Company Appeal (AT) (Insolvency) No.905 of 2022. It is useful to extract the conclusion of Inspection Report, which is to the following effect: Conclusion As per the inspection, Site has been shut since a long time and there was only one watchman present at the gate. Though the site office was available, it seems to be closed from many days (Mostly Years). The construction work was started and then left in the midst of the work, it seems to be only 10-15% of the construction works has been started. A tower was raised and basic fou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that Section 9 Application was filed earlier by the same Operational Creditor being IB No.461(ND)2021, which was dismissed as withdrawn by order dated 29.11.2021, which is to the following effect: Counsel for the Operational Creditor is present. However, there is no representation on behalf of the Corporate Debtor. Counsel for the Operational Creditor submits that in view of the default in the present case being on 31.03.2020, he wants to withdraw the present Petition as the same is hit by Section 10A of the IBC 2016. Permission as sought for is granted and the Petition is dismissed as withdrawn. 15. After one week of the aforesaid withdrawal order, notice under Section 8 was issued on 06.12.2021 by the Operational Creditor to the Corporate Debtor. In the Notice, which is brought at page 291, it is mentioned that date of default is 31.03.2020 . Section 9 Application filed was dated 24.12.2021, in Part-IV of which, following has been mentioned at Sl. No.2: 2 AMOUNT CLAIMED TO BE IN DEFAULT AND THE DATE ON WHICH THE DEFAULT OCCURRED Rs.5,39,60,674/- (Rupees Five Crore Thirty Nine Lakh Sixty thousand Sixty Hundred Seve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .06.2021 received from the Corporate Debtor. When the date of default given by Operational Creditor in Section 9 Application is 31.03.2020, the mere fact that acknowledgement has been given by Corporate Debtor on 03.06.2021 accepting the debt, shall not change the date of default. We, thus, do not agree with the reasons given by the Adjudicating Authority that since acknowledgement is 03.06.2021, the date of default will become 03.06.2021. The date of default and acknowledgement are two different events and date of default is not dependent on acknowledgement of debt. Hence, the Application filed under Section 9 was also liable to be rejected being hit by Section 10A, especially when on the same ground of date of default, i.e., 31.03.2020 earlier Application filed under Section 9 was dismissed as withdrawn one week before giving fresh Section 8 Notice. In Section 9 Application, which was filed by the Operational Creditor on 24.12.2021, there was not even mention of earlier proceedings initiated by Operational Creditor being IB-461(ND)/2021. As noted above, on 12.01.2022, the Adjudicating Authority itself formed an opinion that it has prima facie satisfied that Application is barred ..... X X X X Extracts X X X X X X X X Extracts X X X X
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