TMI Blog2023 (3) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... was filed before the Supreme Court and Hon ble Supreme Court by its order dated 13.01.2020 while issuing notice directed to maintain status quo with respect to pending applications. Though the Hon ble Supreme Court finally upheld the amendment, the Hon ble Supreme Court further extended time to cure the defects within two months from the date of order of Hon ble Supreme Court. On examination of the aforesaid direction of the Hon ble Supreme Court it is clear that the impugned order of the Adjudicating Authority fortfeits the right of the appellant to cure the defect in compliance with the order of Hon ble Supreme Court. It is not in dispute that before amendment under Section 7 was brought by the Govt of India, the application under section 7 filed by the appellant was pending and during pendency of the said application the amendment travelled upto the Hon ble Supreme Court. Initially Hon ble Supreme Court directed to maintain status quo and finally on 19.01.2021 while upholding the amendment provided two months time from the date of the order of Hon ble Supreme Court for curing the defect. However, the Adjudicating Authority before expiry of two months has passed the impugned o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dor Constructions Pvt. Ltd. ( Justice Rakesh Kumar ) Member ( Judicial ) And ( Dr. Alok Srivastava ) Member ( Technical ) For the Appellant : Ms. Sharmistha Ghosh , Ms. Palak Nenwani , Ms. Aditi Sinha , Advocates For the Respondents : Mr. Dilip Annasaheb Taur , Advocate For the Appellant : Mr. Himanshu Chaubey , Advocate For the Respondents : Mr. Dilip Annasaheb Taur , Advocate JUDGEMENT JUSTICE RAKESH KUMAR, MEMBER (JUDICIAL) In both the appeals same and similar order was assailed and as such both the appeals were tagged together and after hearing learned counsel for the parties, judgement was reserved on 18.01.2023. In both the appeals an order dated 23.02.2021 passed in CP(IB) No.2054/2019 has been assailed. By the impugned order learned National Company Law Tribunal, Mumbai Bench, Mumbai (hereinafter referred to as the Adjudicating Authority ) rejected the application filed under Section 7 of the Insolvency Bankruptcy Code, 2016 (hereinafter referred to as IBC) as dismissed as withdrawn considering the appellants as allottee on not meeting the required minimum number. Since the order impugned was rejected primarily on the ground of not mee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umber of such allottees under the same real estate project whichever is less for filing petition under Section 7 of the Code. Liberty is also given to single applicant in the pending company petitions which are pending for admission to bring the required number of remaining applicants and continue the company petition within 30 days from the date of amendment came into force. Admittedly, the petitioners are less than 100 members in the present case and they have not brought the required number of minimum allottees for continuing and admission of the above company petition. In the light of the above legal position, this tribunal is left with no option except to dismiss the above company petition as withdrawn for want of required minimum number of allottees as per the amendment. Even otherwise as rightly contended by the respondent the alleged disputes raised by the petitioners are purely contractual disputes which cannot be decided by this Tribunal under Section 7 of the Code in a summary proceedings. For the foregoing reasons, the above company petition stands dismissed without costs on both the counts. However, the above order does not preclude the petitioner from i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uccessors, and permitted assigns of the OTHER PART. MC and AR are hereinafter individually referred as Party and collectively referred as *Parties WHEREAS: 1. Mr. Ganesh Pandurang Raut( Owner ) is well and sufficiently entitled to and is seized and possessed of all the ownership right, title and interest in the immovable property, being pieces or parcels of Non Agricultural Lands bearing Survey nos. 212. 2/4. 215 and 2/6 admeasuring 4H - 27A - 8P equivalent to 42,708 sq. mrs, lying and situated at Revenue Village Bendecon, within the Registration Sub-District of Shahapur, District Thane and more particularly described in the SCHEDULE hereunder written and which property is hereinafter referred to as the said property . II. The Owner hereinabove has purchased and acquired the said property with an intention to float and launch N. A. Plot Scheme thereon and have obtained all requisite permissions, sanctions, consents, grants, approvals, etc., including but not restricted to Non Agricultural Permission, from such appropriate statutory of regulatory authority(s). III, MC is a Company engaged inter alia in the business of buying and selling of land, cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d shall be released by AR, after the expiry of the term of this agreement without any charge, claim and demur. IX. Acceding to the request of MC and relying on the representations and declarations of MC. AR has agreed to advance to MC an amount of Rs. 18,00,000/- (Rupees Eighteen Lakhs only) against the provision of such security and on the terms and conditions as set out in this Agreement. NOW THEREFORE , in consideration of the promises, mutual covenants and agreements set forth herein, the parties hereto agree as follows: 1. Relying on the representations and declarations of MC. AR hereby advances to MC an amount of Rs. 18,00,000/- (Rupees Eighteen Lakhs Only) vide cheque no. 327651 dated 15.04.2016 drawn on Axis bank (hereinafter referred as the Secured Amount) on the terms and conditions as set out herein. MC hereby accepts and acknowledges receipt of the Secured Amount from Rs. 18,00,000/-. 2 MC doth hereby represent, declare and undertake as under: (a) MC have good right, full power and absolute authority to enter into this Agreement and there is no impediment or restraint or injunction against the MC from being able to do so; (b) The title ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttachment before or after judgment. (i) There are no prohibitory orders or any attachment orders or any litigation of or otherwise any liabilities in respect of the Property or any part thereof, whereby the rights of AR to deal with the Secured Premises, are in any way affected or jeopardized. (j) This Agreement duly and validly executed and delivered by MC and AR, would constitute legal, valid and binding obligation, enforceable against MC and AR in accordance with its terms. 3 The Secured Amount is advanced by AR to MC based solely on the representation and undertaking of MC that the Secured Amount has been invested by AR for a period of two years and that upon the completion of the said period, the MC would be liable to return back the Secured Amount as follows: a. Half yearly return on the principal amount of Rs. 18,00,000/- @ 21% per annum in form of post dated Cheques; b. Upon the expiry of the period as stipulated hereinabove. AR will be given a choice either to take the entire Secured Amount of Rs.18,00,000/- (Rupees Eighteen Lakhs Only)or to purchase any plot under the N.A. Plot Scheme @ 600/- (Rupees Six Hundred only) per sq. ft. If AR agrees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the attention of Mr. Vijay Pawar in the case of MC and in case of AR marked to the attention of Anant Raniwala. All notices shall be deemed to have been validly given on (i) the business transmitted by facsimile transmission, or (i) the expiry of seven days after posting it sent by registered post, or (ill) the business date of receipt, if sent by courier. 'Any party may, from time to time, change its address or representative for receipt of notices provided for in this Agreement by giving to the other not less than fifteen (15) days prior written notice. 9 All disputes and difference between the parties in any way arising out of or relating to this MOU or any subsequent writing in terms of or in furtherance of this MOU shall be referred to arbitration of Miss. Swati Sagvekar, Advocate, having his / her office at Building No. 35, 2n Floor, Ambalal Doshi Marg, Opp. Hamam House, Near Dena Bank, Fort, Mumbai - 400 023, for adjudication thereof. The arbitration proceedings shall take place in accordance with the provisions contained in the Arbitration and Conciliation Act, 1996 or any statutory modification thereof. The arbitration proceedings shall be held at Mumbai and sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in payment of interest and also refund of the invested amount after 24 months despite repeated requests by the appellants, the appellants were constrained to file an application under Section 7 of the IBC before the Adjudicating Authority. On examination of the application filed before the Adjudicating Authority, copy of which has been brought on record as Annexure 6, it is evident that during the period between February 2016 till 2017 the appellants/financial creditors had invested in the project to the tune of Rs.4,57,00,000/-. The said debt was not cleared by the Respondent/Corporate Debtor and as such as on 5th May, 2019 the amount payable by the Corporate Debtor i.e. principal amount alongwith interest had raised to about Rs.6,58,66,874/- (Rupees six crores fifty eight lakhs sixty six thousand eight hundred seventy four only). It is further case of the appellant that as per financial statement of the Corporate Debtor about 311 investors were shown under the column of short term borrowing and all the borrowers had charge over the virtual premises whereas the plan as approved by the Town Planning Authority in relation to project under construction was only in relation to 81 plot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... djudicating Authority, erroneously held that the non-payment of dues by the Corporate Debtor to its creditors, is a Contractual dispute and thereby beyond the jurisdiction of the Tribunal. D. The order as passed by the L.d. Adjudicating Authority is in contravention of the statutory rigors of the Code and the law laid down by the Hon'ble Supreme Court of India, with respect to the scope and extent of enquiry as can be made by the Ld. Adjudicating Authority in a petition under Section 7 of the Act. In a petition filed under Section 7 of the Code the adjudicating authority has to merely satisfy itself that a default has occurred, even if the default is disputed so long as it is due i.e. payable unless interdicted by some law or has not yet become due in sense that is payable at some future date. The moment the Adjudicating Authority is satisfied that a Default has occurred, the Application must be admitted (Innoventive Industries Ltd. v. ICICI Bank Ltd. reported in (2018) 1 SCC 407, para 28 and 31: E.S. Krishnamurthy Ors. v. Bharath Hi-Tecch Builders Pvt. Ltd. reported in (2022) 3 SCC 161, para 31 and 32). E. The interpretation of the terms of the Investment Agreeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon by the Corporate Debtor only deals with the contingency of non-payment of Secured Amount. Secured Amount has been defined in Clause 1 of the Agreement as the principal amount invested by the investor (@) pg. 41, Appeal). Even on assuming. though not admitting, that transfer of the Secured Premises in favour of the investors will absolve the Corporate Debtor of its obligation to repay the Principal Amount, its obligation to pay the assured returns still remains, which admittedly has not been paid, thereby establishing the default as contemplated under the Code. L. The finding of the Ld. Adjudicating Authority that any petition against the Corporate Debtor ought to have been filed by 100 such investors, is contrary to the language of the statute itself and is therefore liable to be set aside. 5. In both the appeals Respondent/Corporate Debtor has appeared and filed almost similar reply. Learned Counsel for the Respondent/Corporate Debtor opposing the appeals has argued that the Learned Adjudicating Authority has committed no error in dismissing the application filed under Section 7 of the IBC by the appellants. Learned Counsel for the Respondent by way of referring to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o an investment agreement with the appellants who had invested money as secured in Respondent(Corporate Debtor) for two years and upon expiry of the said period the appellant were in choice either to take the entire secured amount or to take secured premises. It has also been admitted that Corporate Debtor had handed over post dated cheques towards the payment of accrued interest and principal amount. Whereas it is specific case of the appellant that since some post cheques were dishonoured it was financial debt for which the appellants being financial creditor filed application under Section 7 of the IBC jointly for total outstanding debt which was more than Rs.4 crores. 8. Learned counsel for the appellant has also argued that even though the application was not required to be dismissed by the Adjudicating Authority on the ground of not meeting the minimum number, the Adjudicating Authority has committed serious error in not granting time to remove the error, if any, in the light of judgement of the Hon ble Supreme Court in Manish Kumar Vs Union of India reported in (2021) Volume V SCC Page 1. It was submitted by the learned counsel for the appellant that application under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mains that after the amendment in section 7 was introduced appeal was filed before the Supreme Court and Hon ble Supreme Court by its order dated 13.01.2020 while issuing notice directed to maintain status quo with respect to pending applications. Though the Hon ble Supreme Court finally upheld the amendment, the Hon ble Supreme Court further extended time to cure the defects within two months from the date of order of Hon ble Supreme Court. For better appreciation it is apt to reproduce the relief which was granted by the Hon ble Supreme Court in Manish Kumar case (Supra) which are as follows: Relief: 447. We uphold the impugned amendments. However, this is subject to the following directions, which we issue under Article 142 of the Constitution of India: 447.1. If any of the petitioners move applications in respect of the same default, as alleged in their applications, within a period of two months from today, also compliant with either the first or the second proviso under Section 7(1), as the case may be, then, they will be exempted from the requirement of payment of court fees, in the manner, which we have detailed in the paragraph just herein before. 447 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued under Article 142 regarding court fees and about condonation of delay will apply to the applicants who are allottees. 10. On examination of the aforesaid direction of the Hon ble Supreme Court it is clear that the impugned order of the Adjudicating Authority fortfeits the right of the appellant to cure the defect in compliance with the order of Hon ble Supreme Court. It is not in dispute that before amendment under Section 7 was brought by the Govt of India, the application under section 7 filed by the appellant was pending and during pendency of the said application the amendment travelled upto the Hon ble Supreme Court. Initially Hon ble Supreme Court directed to maintain status quo and finally on 19.01.2021 while upholding the amendment provided two months time from the date of the order of Hon ble Supreme Court for curing the defect. However, the Adjudicating Authority before expiry of two months has passed the impugned order on 23.02.2021. Accordingly there is no reason to allow the impugned order to continue. 11. In so far as other ground taken by the Adjudicating Authority for rejection of the application in the impugned order is concerned i.e. contractual dispu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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