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TMI Blog2023 (3) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... sadh TS Srinivasan , Priya Rajeev Shivdasani, Rajesh Kantilal Jain , Raju Sethi (HUF) Kart Raju Sethi , Rama Venkatesh , Ravindra Bohra , Sanaa Rahman, Sanjeev Chakravarthy, Sharmila Chandan , Shruti Praveen Rege, Shyamal Sarkar , Sonika Lakhera, , Sreenath Nagaraja , Subrahmanya Manjunatha , Subramanyam Kotharu , Sunil Kumar V, Swatantra Roa , V. Ananthakrishnan , Vaishali Khandekar , Vidya Krishna , Vikram Dhawan, Visvesvaraya Appala Pentakota Versus Mirador Constructions Pvt. Ltd. And Sujata Shekhar Shah, Anand Purandare, Avnish Jagdish Mody, Bharat Laljee Shah, Saroj Bharat Shah, Sudha Naren Sheth, Suman Sudhir Purandare, Sudhr Dattatraya Purandare, Sudhir Dattatraya Purandare HUF Versus Mirador 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 ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not respond to that offer. Be that as it may disregarding the contentions of both sides, the issue that falls for consideration is; Whether the above company petition filed by 14 individual flat allottees in a real estate project is maintainable in view of the recent amendment? Admittedly, all the above petitioners are investors in the real estate project namely "Oasis Avani" launched by the Corporate Debtor. The company petition was filed on 27th May, 2019. Subsequently, Section 7 of the code was amended through amendment which was published in Official Gazettee dated 13.03.2020 prescribing minimum 100 allottees or not less than 10 percent of the total number 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 continu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Near Laxmi Nagar. Ghatkopar (East) Mumbai - 400075 (hereinafter referred as 'MC*), which expression shall unless it be repugnant to the context or meaning thereof be deemed to mean and include its successors or successor in interest and assigns of the ONE PART; AND Anant Raniwala, Indian Inhabitant residing at Flat No. 603, Vivarea Tower, B-1, Sano Guruji Marg, Mahalakshmi Circle, Jacob, Mumbai (hereinafter referred as the "AR*) PAN No. AIGPV6305B, which expression shall, unless it be repugnant to the context or meaning thereof, be deemed to mean and include his/her heirs, representatives. executors, administrators, successors, 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-D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made available to the AR @ Rs. 600/- (Rupees Six Hundred only) per sq. ft. ("Secured Premises") and the area of the said Secured Premises shall be equivalent to the amount invested by the AR, to secure the sums advanced by AR to MC. VIII. In order to further ensure the Secured Amount as envisaged in clause VII hereinabove, an additional area equivalent to Secured Premises shall be kept reserved by MC as an by way of additional performance guarantee for the sum advanced by AR to MC. It is expressly agreed between the Parties that the said additional area is just to additionally secure AR and 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 here ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of anyone whether by way of trust or by way of any claim for maintenance whatsoever till the time the entire Secured Amount and other moneys due and repayable by MC to AR in terms of this Agreement are fully repaid or deemed to have been repaid in the manner envisaged in this Agreement. (g) Neither Owner / MC have received any notice for acquisition or requisition of the said property and/or the Secured Premises or any portion thereof. (h)Neither the said property nor the Secured Premises are the subject matter of any pending suit or litigation or attachment 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sustained by AR arising from or out of or in connection with or in relation to the transaction contemplated in this MOU. 8 Any notice and other communications provided for in this Agreement shall be in writing and shall be first transmitted by facsimile transmission and then confirmed by postage, prepaid registered post with acknowledgement due or by internationally recognized courier service, in the manner as elected by the Party giving such notice, at the addresses first hereinabove mentioned and shall be marked 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... similar separate investment agreements were entered into between other appellants and Respondent/Corporate Debtor. It is further case of the appellant that as per investment agreement within 24 months the invested amount was to be returned and also periodically during intervening period interest at specific rate was to be given to the appellants by the Respondent/Corporate Debtor. It is further clear that some interest was paid. However, subsequently on failure on the part of the Corporate Debtor 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judices the petition, already preferred by some of the Appellants herein, before the Ld. Adjudicating Authority, against the Corporate Debtor, even though the same has been filed in compliance with the amended Section 7 of the Code. Since the agreements as entered into between the Appellants and the petitioners before the Ld. Adjudicating Authority are identical, the interpretation as given by Ld. Adjudicating Authority, has a direct bearing on the rights of the Appellants. C. The Ld. Adjudicating 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in light of the law as laid down by the Hon'ble Apex Court in Innoventive Case (Supra). is that the Petition under Section 7 is liable to be allowed by the Adjudicating Authority. J. The Corporate Debtor itself has recognised the Appellants herein as the creditors of the Company in the Audited Books of Accounts of the Corporate Debtor (@pg. 74, Appeal). K. The Ld. Adjudicating Authority has further failed to appreciate that the default clause as relied 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest was also paid which is evident from para 4(j) of the affidavit in reply of the Corporate Debtor in Company Appeal (AT)(Ins) No.314/2021. It has been specifically stated that the Respondent Company has paid the interest from time to time and performed its part of contract. It is further clear from stand taken by the Corporate Debtor in para 4(g) that as per instructions of the Karvy, the Respondent Company through its director had entered into 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /Corporate Debtor in para 4(j) of it affidavit in reply. The investment agreement was unambiguous for 24 months and in lieu charge was created to the plots. In such situation there was no reason for the adjudicating authority to treat the appellants as allottees. We are of the opinion that the Adjudicating Authority has further misunderstood the observation of the Hon'ble Supreme Court in Manish Kumar case (Supra). It is evident that the fact remains 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 Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Code on 19.12.2019. I.A. No.32869 of 2020 WP(C) No.53 of 2020 is filed by the allottees who have filed the same for impleadment. They have filed application under Section 7 on 17.9.2019. I.A.No. 15425 of 2018 in WP (C)No.26 of 2020 is filed by a corporate debtor for impleadment. All the above IAs are disposed of in terms of the judgment as aforesaid. 450. We however make it clear that the directions we have issued 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 ti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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