2020 (12) TMI 1325 - Tri - Insolvency and Bankruptcy

Supreme Court: Financial Creditors Must Comply with Allottee Requirements

The Supreme Court emphasized the necessity for Financial Creditors to comply with the Ordinance by including 100 Allottees or 1/10th of total allottees ... Issuance of status-quo order in relation to the pending Applications filed under Section 7 of IBC - HELD THAT:- The Hon'ble Supreme Court has not issued any Stay on the Ordinance. The financial creditors in class want to fulfill the requisites of the Ordnance. The Corporate debtor did not place any record on its Website and claims privacy. The information which could be available on Website of the RERA is not sufficient for the Financial Creditors in Class to fulfil the requirement of the Ordinance. Consequently, the right to the property of the Financial Creditor in Class cannot be protected, as the officious remedy available to them will be curtailed. The Corporate Debtor is directed to provide the information about the 100 number of Allottees or 1/10th of total number of the Allottees of the project, whichever is less, excluding those with whom settlement has happened. The information to be provided by the CD to the financial creditors in class shall include the names, address, Telephone/Mobile numbers/e-Mails of the allottees of the project, which is the subject matter of the application - List the matter on 18.2.2021. Issues:1. Compliance with the Ordinance dated 28th Dec, 2019 by Financial Creditors in Clause.2. Obligation of Corporate Debtor to provide information to fulfill requirements of the Ordinance.3. Directive for Corporate Debtor to provide information about Allottees to Financial Creditors in Clause.4. Timeline for Corporate Debtor to provide information and file compliance affidavit.Analysis:1. The judgment revolves around the compliance requirement of the Ordinance dated 28th Dec, 2019 by the Financial Creditors in Clause. The Hon'ble Supreme Court has emphasized the necessity for the Petitioners/Financial Creditors in Clause to fulfill the requirements within 30 days by including 100 Allottees or 1/10th of the total allottees of the project, whichever is less, as petitioners. It is crucial for the Financial Creditors in Clause to adhere to these stipulations to maintain their rights.2. The judgment addresses the obligation of the Corporate Debtor to provide essential information to facilitate compliance with the Ordinance by the Financial Creditors in Clause. Despite the Corporate Debtor's claim of privacy and lack of information on its website, the Tribunal has ruled that the Corporate Debtor holds the necessary details and must disclose them to enable the Financial Creditors in Clause to meet the Ordinance requirements. This disclosure is deemed essential to safeguard the property rights of the Financial Creditors in Clause.3. A directive has been issued to the Corporate Debtor to furnish information regarding 100 Allottees or 1/10th of the total allottees of the project, excluding those with whom settlements have been reached, to the Financial Creditors in Clause. The information to be provided includes names, addresses, telephone/mobile numbers, and emails of the relevant allottees. The Corporate Debtor is mandated to share this information within a specified timeline to facilitate compliance by the Financial Creditors in Clause.4. In terms of timelines, the judgment outlines a structured process for the Corporate Debtor. The Financial Creditors in Clause, along with their counsels, are required to communicate with the Corporate Debtor for the necessary information within three weeks. Subsequently, the Corporate Debtor must provide the requested information within the next three weeks. Following the provision of information, the Corporate Debtor is obligated to file a compliance affidavit within a week. The matter is scheduled to be listed for further proceedings on 18.2.2021, indicating a timeline for the next steps in the case.