2021 (4) TMI 1069 - Tri - IBC

Tribunal Rejects Insolvency Petition Citing Time Bar, Missing Parties, and Non-Compliance with IBC 2019 Amendments.

The tribunal dismissed the petition for initiating CIRP under Section 7 of the IBC on several grounds: the claim was time-barred, there was a non-joinder ... Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - financial creditors or not - Homebuyers - Tripartite agreement - fulfilling the threshold limit or not - existence of debt and dispute or not - HELD THAT:- As per the Insolvency and Bankruptcy Code, (Amendment) Ordinance, 2019 dated 28.12.2019 Financial Creditors who are homebuyers of Real Estate Project can file a Petition U/s 7 of the Code, 2016, jointly only if there are 100 of such homebuyers or if they are 10% of total homebuyers, whichever is less. However, in the instant Petition, only one Homebuyer has filed the case which neither amounts to 10% of the total class of Financial Creditors nor 100 Financial Creditors. The Petitioner, therefore, fails at the very threshold. It is also seen that in the instant case, as per the Construction agreement, the default has occurred on 01.07.2013. The CP is filed on 17.09.2019, i.e. almost 6 years after the cause of action and default. In the instant case the Petitioner is before this Tribunal mainly to execute its decree and hence would not be eligible to file a Petition for execution of the decree received from the NCRC. We may add that if home buyers who obtain decrees from other fora also, such as from RERA, are permitted to file petitions under the IBC, that would defeat the purpose of the above referred amendment in section 7 of the Code laying down the threshold of 100 or 10% home buyers, whichever is less - Hence, as per the decision in the case of Sushil Ansal [2020 (8) TMI 396 - NATIONAL COMPANY LAW APPEALLATE TRIBUNAL, NEW DELHI] while remedies are available to a home buyer elsewhere, as also under IBC (with the aforesaid threshold), once he receives a decree, the same cannot be brought for execution by invoking Section 7 of the IBC. We are also in agreement with the Respondent that since there is a Tripartite Agreement with the ICICI Bank Ltd. and the loan amount was disbursed by ICICI Bank Ltd., not only the cancellation can be done by the ICICI Bank but also the repayment can be done only to the ICICI Bank which would be the Financial Creditor in the instant case and not the Petitioner, as the Petitioner has handed over this right to this Bank as per the tripartite agreement. The ICICI Bank has not been made a party in the CP and the Petition suffers from non-joinder. Petition dismissed. Issues Involved:1. Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016.2. Timeliness and limitation of the claim.3. Principle of res judicata and pre-existing disputes.4. Non-joinder of necessary parties (ICICI Bank).5. Applicability of the IBC (Amendment) Ordinance, 2019 regarding the threshold for homebuyers.6. Execution of a decree under IBC.7. Arbitration clause in the agreement.Detailed Analysis:1. Initiation of CIRP under Section 7 of IBC:The petitioners, financial creditors, sought to initiate CIRP against the corporate debtor for defaulting on an amount of Rs. 49,24,359. The corporate debtor failed to deliver the possession of the apartment as per the agreements dated 05.09.2011 and subsequent extensions, leading to the financial creditors seeking a refund and filing a consumer complaint.2. Timeliness and Limitation:The respondent argued that the claim was time-barred as the default occurred on 01.07.2013, but the petition was filed on 17.09.2019, exceeding the limitation period. The tribunal noted that the default date was indeed 01.07.2013, making the petition filed almost six years later, beyond the permissible period.3. Principle of Res Judicata and Pre-existing Disputes:The respondent contended that the matter was already adjudicated by the State Consumer Dispute Redressal Commission and National Consumer Dispute Redressal Commission, making the present petition hit by res judicata. The tribunal acknowledged the existence of pre-existing disputes and the consumer court's order directing the corporate debtor to pay the claimed amount.4. Non-joinder of Necessary Parties (ICICI Bank):The respondent highlighted a tripartite agreement involving ICICI Bank, which financed the purchase. The petitioners had subrogated their rights to ICICI Bank, and any payment due was to be made to the bank, not the petitioners. The tribunal agreed that ICICI Bank was a necessary party, and its non-joinder rendered the petition defective.5. Applicability of IBC (Amendment) Ordinance, 2019:The tribunal noted that under the IBC (Amendment) Ordinance, 2019, a single homebuyer could not file a petition under Section 7 unless there were at least 100 homebuyers or 10% of the total homebuyers in the project. The petitioners did not meet this threshold, failing at the very threshold.6. Execution of a Decree under IBC:The petitioners, being decree holders, sought to execute the decree under Section 7 of IBC. The tribunal referred to recent NCLAT decisions, which clarified that a decree holder does not fall within the class of financial creditors and cannot initiate CIRP for decree execution. The tribunal emphasized that allowing decree holders to file petitions under IBC would defeat the purpose of the amendment requiring a threshold of homebuyers.7. Arbitration Clause in the Agreement:The respondent pointed out that the agreement for sale included an arbitration clause, which required disputes to be resolved through arbitration. The tribunal did not specifically address this issue in the final decision, given the dismissal on other grounds.Conclusion:The tribunal dismissed the petition on multiple grounds, including the timeliness of the claim, non-joinder of necessary parties, failure to meet the threshold under the IBC (Amendment) Ordinance, 2019, and the ineligibility of decree holders to initiate CIRP under Section 7 of IBC. The tribunal allowed the petitioners to seek other remedies available under the law. No order as to costs was made.