TaxTMI 
TaxTMI 
2022 (11) TMI 294
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....'s Welfare Association) Mr. Abhishek Anand, Mr. Nipun Gautam, Mr. Pathik Chaudhury, Advocates for R-1 Mr. Gaurav Mitra, CS Gaurav Joshi, Mr. Atul Bhatia, Advocates for R-2 Mr. Prabhjot Ranjan Singh for RP JUDGMENT ASHOK BHUSHAN, J. These two Appeal(s) have been filed by the same Appellant, challenges orders dated 18.04.2022 and 25.07.2022 passed the National Company Law Tribunal, New Delhi Bench, Court No.III in C.P. IB-11(ND)/2022. Both the Appeal(s) have been heard and are being decided by this common judgment. 2. Brief facts of the case necessary to be noticed for deciding these Appeal(s) are: (i) M/s PSA IMPEX Private Limited, the Corporate Debtor launched a House Building Project in the year 2012 to be completed within 36 months. The Appellant Registered Society of the Homebuyers and Allottees of Project Sampada 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 th....
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....t. Ltd. claiming to be an Operational Creditor filed an Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the "Code") being IB-461(ND)/2021, which Application was withdrawn on the submission of the Counsel for the Operational Creditor that Application is hit by Section 10A of the Code. The Adjudicating Authority vide order dated 29.11.2021 permitted the Operational Creditor to withdraw the Application, which Application was dismissed as withdrawn. (vi) Within a week from the withdrawal of the aforesaid Application, a notice under Section 8 of the Code was issued by the Operational Creditor M/s. Rudra Buildwell Constructions Pvt. Ltd. dated 06.12.2021 to the Corporate Debtor demanding payment of an unpaid operational debt of Rs.5,39,60,674/- including interest. The 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 affidavi....
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.... was stayed by this Tribunal. 4. We have heard Shri Abhijeet Sinha, learned Counsel for the Appellant, Shri Gaurav Mitra, learned Counsel for Respondent No.2 - M/s. Rudra Buildwell Constructions Pvt. Ltd., Shri Abhishek Anand, learned Counsel appeared for Corporate Debtor and Shri Saurabh Jain, learned Counsel has been heard for SLAB Home Buyer's Welfare Association, who was permitted to intervene in the Appeal(s). We have also heard learned Counsel appearing for the IRP. 5. The learned Counsel for the Appellant submits that insolvency proceedings were fraudulently initiated by the Operational Creditor in collusion with the Corporate Debtor. It is submitted that both the Corporate Debtor and Operational Creditor are controlled by the same person, i.e., Shri Raj Kumar and both entities are one and the 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 t....
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....flict with the order passed by the RERA and those of proceedings under IBC. The order passed by RERA handing over Project to the Appellant is an order by sectoral regulator and cannot be suspended or terminated on the grounds of insolvency. It is further submitted that according to averments made in Section 9 Application, the date of default being 31.03.2020, the Application was clearly hit by Section 10A and the mere fact that the acknowledgement was issued by the Corporate Debtor on 03.06.2021 shall not give any cause of action to the Operational Creditor to file Section 9 Application. The reasoning given by the Adjudicating Authority for rejecting argument based on Section 10A is untenable. 6. Shri Gaurav Mitra, learned Counsel appearing for Respondent No.2-M/s. Rudra Buildwell Constructions Pvt. 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 ....
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....dings under Section 9 have been initiated by Operational Creditor fraudulently and in collusion with Corporate Debtor. For appreciating such submission, we need to notice the sequence of the events and various proceedings undertaken with regard to Project in question. 10. While noticing the facts of the case, we have noticed that Project was announced in 2012 and it was to be completed within 36 months and when there was inordinate delay in completion of the Project, the complaints were filed before the RERA by the Homebuyers. On complaints filed by the Homebuyers, Show Cause Notice was issued by the RERA to the Corporate Debtor on 08.03.2019. After receipt of the complaints, inspection was got conducted by the RERA. In the inspection, Officials of the RERA found that no construction work 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 ....
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....ilding Norms and to get it registered under "GRIHA" or "IGBC". A revised construction schedule for each of the towers has been given by the new promoter." 11. The aforesaid facts clearly indicate that the Promoter case throughout was that entire Project was handed over to Mr. Raj Kumar, the owner of M/s. Rudra Buildwell Constructions Pvt. Ltd., who has taken over the Project. It is relevant to notice that order dated 30.09.2019 passed by RERA cancelling the registration, was challenged by the Corporate Debtor through Mr. Raj Kumar, the Authorised Representative both before U.P. Real Estate Appellate Tribunal and in Second Appeal before the High Court was by Mr. Raj Kumar. It is, thus, Raj Kumar who is contesting and challenging the proceedings of RERA before the U.P. Real Estate Appellate 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 clai....
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.... not be less than one lakh rupees, but may extend to one crore rupees." 13. The sequence 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, which we have noted above. When we further notice several other facts pertaining to Section 9 Application, our conclusion is re-emphasized that Section 9 Application was for purposes other than the insolvency resolution process. Following are the further facts, which lend support to our above conclusion: (i) When we look into the invoices which are basis of Section 9 Application, it is clear 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, val....
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....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 foundation work has been started for other towe....
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....me 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 Seventy four only) Date of default is 31.03.2020 16. When Application under Section 9 mentions date of default 31.0....
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....re 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 by Section 10A and thereafter time was granted by the Adjudicating Authority to file additional affidavit. The additional affidavit gives only exp....