2023 (8) TMI 13 - AT - Insolvency and Bankruptcy

Tribunal rules landowner not a financial creditor under IBC

Ashoka Hi-Tech Builders Pvt. Ltd. Versus Sanjay Kundra & Anr.

Ashoka Hi-Tech Builders Pvt. Ltd. Versus Sanjay Kundra & Anr. - TMI Issues:Appeal against removal from Committee of Creditors based on being a financial creditor.Analysis:The appellant, a landowner, filed a claim before the Resolution Professional and was inducted into the Committee of Creditors. However, an application by Home-Buyers led to the appellant's removal from the Committee. The appellant argued that as per the Development Agreement, he was entitled to a share of the construction. The Adjudicating Authority held that the appellant was not a financial creditor since no amount was disbursed for the time value of money, as required by Section 5(8)(f) of the IBC.The Adjudicating Authority referred to the judgment in 'Namdeo Ramchandra Patil and Ors. Vs. Vishal Ghisulal Jain' and emphasized the need for disbursement against the consideration for time value of money to qualify as a financial debt. The Authority also cited the Supreme Court's interpretation of 'disbursement' in the context of financial debt. The Tribunal concurred with the Authority's decision, stating that the appellant was a collaborator in the development agreement, not a financial creditor, as there was no disbursement for time value of money by the appellant.The Tribunal found that the issues were adequately addressed in the Namdeo Ramchandra Patil case and upheld the Authority's decision that the appellant was not a financial creditor. The terms of the development agreement indicated the appellant's role as a collaborator, not a financial creditor. Since no disbursement for time value of money occurred, the appellant did not meet the criteria under Section 5(8) of the IBC. Consequently, the appeal was dismissed.