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Issues: (i) Whether the applicants, being landowners/allottees under the supplementary collaboration agreements, could be treated as financial creditors under the Insolvency and Bankruptcy Code, 2016 on the basis of the allotment of flats and the agreed project share arrangement. (ii) Whether the applicants were entitled to a direction for handing over possession of the apartments or the land despite the corporate insolvency proceedings.
Issue (i): Whether the applicants, being landowners/allottees under the supplementary collaboration agreements, could be treated as financial creditors under the Insolvency and Bankruptcy Code, 2016 on the basis of the allotment of flats and the agreed project share arrangement.
Analysis: Financial creditor status depends on the existence of a financial debt, and a financial debt must involve disbursal against the consideration for time value of money. The deeming fiction for amounts raised from an allottee under a real estate project applies only where money is raised from the allottee in the manner contemplated by the Code and the RERA definitions. On the admitted facts, the applicants had contributed land and development rights under the collaboration arrangements, the land remained with them, and the allotment of flats was in lieu of that arrangement rather than against money advanced to the corporate debtor. The agreement terms also showed that the applicants stood in the position of co-promoters rather than mere allottees.
Conclusion: The applicants were not financial creditors, and their claim to be included in the committee of creditors was rejected.
Issue (ii): Whether the applicants were entitled to a direction for handing over possession of the apartments or the land despite the corporate insolvency proceedings.
Analysis: The applicants had entered into a supplementary collaboration agreement under which the project was to be developed on their land and the contractual structure did not justify restoration of possession of the land or grant of the relief sought. Since their primary status-based claim as financial creditors failed, the consequential prayer for possession could not be granted. The arrangement placed them within the promoter-side of the project rather than in the position of creditors entitled to possession relief in the insolvency process.
Conclusion: The request for handing over possession of the apartments or land was rejected.
Final Conclusion: The applications were dismissed and the interim protection earlier granted was vacated, leaving the corporate insolvency process to continue in accordance with law.
Ratio Decidendi: A landowner under a real estate collaboration arrangement is not a financial creditor unless a financial debt is established through disbursal of money against the time value of money; allotment of constructed units in lieu of land rights does not by itself create such debt.
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