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2018 (11) TMI 1410
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....India) Private Limited (CIN U70109DL2008PTC174131) against whom initiation of Corporate Insolvency Resolution Process has been prayed for, was incorporated on 18.02.2008 under the provisions of the Companies Act, 1956. Respondent Nos. 2 and 3 are directors of respondent No. 1 company. The registered office of the respondent corporate debtor is at 4, Jagriti Enclave, Vikas Marg Extension, New Delhi-110092. Since the registered office of the respondent corporate debtor is in Delhi, this Tribunal having territorial jurisdiction over the place is the Adjudicating Authority in relation to the prayer for initiation of Corporate Insolvency Resolution Process in respect of respondent corporate debtor under sub-section (1) of Section 60 of the Code. 3. It is the case of the petitioner that the respondent company is engaged in developing and constructing a Group Housing Project in the land measuring approximately 196272 sq. Meter situated at Ahinsa Khand - II, (Near DPS School) Indirapuram, Ghaziabad under the project name of "ANGEL JUPITER'. 4. Petitioner had booked three flats in the said project of the respondent company, the details of which are as follows: "(i) Flat b....
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....5 C-2206 for 1575 sq. feet in Angel Jupiter Project 48% 01.01.16 10 7. It is submitted that the Corporate Debtor had acknowledged the amounts paid by the Financial debtor and has issued the receipt of respective payments to the Financial Creditor, the details of which are as follows: 1. Receipt dated 18th March, 2015 for an amount of Rs. 39,74,000 (Rupees Thirty Nine Lakhs Seventy Four Thousand Only) For Flat bearing No. C-2103. 2. Receipt dated 15th March, 2015 for an amount of Rs. 39,74,000 (Rupees Thirty Nine Lakhs Seventy Four Thousand Only) for Flat bearing No. C-2004. 3. Receipt dated 25th June, 2015 for an amount of Rs. 45,00,000 (Rupees Forty Five Lakhs Only) for Flat bearing No. C-2206. 8. Besides Corporate Debtor has further acknowledged the payments made by petitioner Financial Creditor and issued cheques for the said principal amount, the details of which are as follows: 1. Cheque No. 223218 dated September 15, 2015 amounting to Rs. 39,74,000 (Rupees Thirty Nine Lakhs Seventy Four Thousand Only) favouring Mr. Narender Kumar for Flat bearing No. C-2103. 2. The Cheque No. 223217 dated August 31, 2015 amounting....
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....of debtor and creditor. It is stated in the reply that the amount paid by the applicant is not the amount of debt granted but it is consideration paid for purchase of flats. 13. It is submitted that the nature of transaction is also confirmed through service tax levied and deposited against the amount received by respondent. The service tax payment for the real estate transactions is the conclusive proof for the fact that the transaction was never financial in nature. It is also stated that even after getting payment through cheques the applicant has not presented them for months and now the same payment is being claimed through present application which is unsustainable. 14. Further it is stated that the essential nature of the contract is agreement to sale of residential flats in the nature of real estate transaction and the return amount is just an incidental part of the real estate transaction. In no way the nature of payment falls within the meaning of debt in terms of Section 3(11) of the Insolvency and Bankruptcy Code, 2016. It is alleged that neither the debt is a 'financial debt' nor the petitioner can be termed as financial creditor'. 15. It is the ca....
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.... surrendered." 17. In compliance of the order dated 13.06.2018 the petitioner has filed affidavit dated 09.07.2018 inter alia affirming that Corporate Debtor had provided the post-dated cheques for the principal amount and assured return but the Corporate Debtor time and again requested the Financial Creditor through Mr. Devendra Aggarwal, the person mentioned as Arbitrator in Clause 22 of the Buy-Back Agreement cum Guarantee Agreement, not to deposit the said post-dated cheques as there was no balance in the Bank Account of the Corporate Debtor. It is submitted that Mr. Devendra Aggarwal is a very senior Chartered Accountant and was the main instrumental in negotiating and finalising the Buy-Back Agreement cum Guarantee Agreement between the Financial Creditor and the Corporate Debtor. Thus on the various request of the Corporate Debtor the said post-dated cheques were not deposited by the Financial Creditor as the Corporate Debtor had been giving false assurances to the Financial Creditor but the same has not been received till date. It is submitted that the various communications between the Corporate Debtor and Mr. Devinder Aggarwal were not reduced to writing and were made ....
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....y the Financial Creditor. 20. In support of the contention for not depositing the postdated cheques, the petitioner has placed the affidavit of Mr. Devendra Aggarwal, which is cited below: "That I am a very good friend and neighbour of both the Directors of Corporate Debtor and also my name is mentioned as Arbitrator in Clause 22 of the Buy-Back Agreement cum Guarantee Agreement dated March 18, 2015. That the corporate debtor has times and again made various verbal communications with me for requesting the financial creditor for not depositing the said post dated cheques and had been giving false assurances that the payments will be made within 10-15 days but the same has not been received till date." 21. We have heard the parties and have perused the case records including the counter affidavit of respondent filed on 26.07.2018. 22. The scheme of the Code provides for triggering the insolvency resolution process by three categories of persons namely, a) Financial creditor b) Operational creditor, and c) Corporate debtor itself. 23. The procedure in relation to the Initiation of Corporate Insolvency Resolution Process by the ....
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....vables sold on non-recourse basis; f) any amount raised under any other transaction, including any forward sale or purchase agreement, having the effect of a borrowing; Explanation - For the purposes of this sub-clause- (I) Any amount raised from an allottee under a real estate project shall he deemed to be an amount having the commercial effect of a borrowing and (II) The expressions, "allottee" and real estate project shall have the meanings respectively assigned to them in clauses (d) and (zn) of Section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016); (g) any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price and for calculating the value of any derivative transaction, only the market value of such transaction shall be taken into account; (h) any counter-indemnity obligation in respect of a guarantee, indemnity, bond, documentary letter of credit or any other instrument issued by a bank or financial institution; (i) the amount of any liability in respect of any of the guarantee or indemnity for any of the items referred ....
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....39,74,000/- (Rupees Thirty Nine Lakhs Seventy Four Thousand Only) for Flat hearing No. C-2004. iii. Receipt dated 25th June, 2015 for an amount of Rs. 45,00,000/ - (Rupees Forty Five Lakhs Only) for Flat bearing No. C-2206. 29. Since the amount has been raised from the petitioner/allottee under a real estate project, not only the debt has a commercial effect of borrowings and come within the scope of 'financial debt' but also the petitioner comes within the definition of 'financial creditor'. 30. Therefore, petitioner being a financial creditor can invoke Corporate Insolvency Resolution Process under Section 7 of the code against the respondent corporate debtor in case of default in repayment of financial debt. 31. Initiation of Corporate Insolvency Resolution Process by Financial Creditor is regulated by the provision engrafted in Section 7 of the Code, which reads as under: "7. Initiation of corporate insolvency resolution process by financial creditor. - (1) A financial creditor either by itself or jointly with other financial creditors may file an application for initiating corporate insolvency resolution process against a cor....
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....5) to the financial creditor, within seven days of admission or rejection of such application, as the case may be." 32. Dealing with the ambit and scope of Section 7 of the Code in "Innoventive Industries Ltd. Vs ICICI Bank and Ors". Reported in (2018) 1 SCC 407, the Hon'ble Supreme Court has observed as under: "28. When it comes to a financial creditor triggering the process, Section 7 becomes relevant. Under the explanation to Section 7(1), a default is in respect of a financial debt owed to any financial creditor of the corporate debtor - it need not be a debt owed to the applicant financial creditor. Under Section 7(2), an application is to be made under sub-section (1) in such form and manner as is prescribed, which takes us to the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. Under Rule 4, the application is made by a financial creditor in Form 1 accompanied by documents and records required therein. Form 1 is a detailed form in 5 parts, which requires particulars of the applicant in Part I, particulars of the corporate debtor in Part II, particulars of the proposed interim resolution professional in part III, particulars of th....
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....him that no disciplinary proceeding is pending against him in Insolvency and Bankruptcy Board of India or elsewhere. In addition, further necessary disclosures have been made by Mr. Ashok Kumar Juneja as per the requirement of the IBBI Regulations. Accordingly, he satisfies the requirement of Section 7(3)(b) of the Code. 35. It is reiterated that the Form-1 filed in the present case under Section 7 of the Code read with Rule 4 of the Rules, shows that the Form is complete in all respect and there is no infirmity in the same. 36. The next question conies for consideration is whether respondent corporate debtor has committed default in payment of the financial debt. 37. In this connection respondent corporate debtor has taken a stand that in terms of the buy-back agreement for three flats respondent gave post-dated cheques which was not encashed by the petitioner. It is accordingly contended that the respondent has already cleared the amount within the due date as per the buy-back agreement cum guarantee deed. Therefore, the essential requirement of 'default' for triggering the CIR Process under Section 7 has not been made out. 38. In this regard the precise conte....
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....f the financial debt. 43. Under sub-section 5 (a) of Section 7 of the code, the application filed by the applicant financial creditor has to be admitted on satisfaction that: 1. Default has occurred. 2. Application is complete, and 3. No disciplinary proceeding against the proposed IRP is pending. 43.1 Hon'ble Supreme Court in the case of Mobilox Innovations Private Limited V. Kirusa Software Private Limited reported in AIR 2017 SC 4532 4532 at Para 19 has observed that: "Once the adjudicating authority/Tribunal is satisfied as to the existence of the default and has ensured that the application is complete and no disciplinary proceedings are pending against the proposed resolution professional, it shall admit the application. The adjudicating authority/Tribunal is not required to look into any other criteria for admission of the application." (Emphasis given) 44. As a sequel to the aforesaid discussion it is seen that the applicant being a home buyer comes within the definition of Financial Creditor. The material placed on record further confirms that applicant financial creditor had disbursed the money to the respondent corporate d....
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....ity interest created by the corporate debtor in respect of its property including any action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; (d) the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor." 49. It is made clear that the provisions of moratorium shall not apply to transactions which might be notified by the Central Government or the supply of the essential goods or services to the Corporate Debtor as may be specified, are not to be terminated or suspended or interrupted during the moratorium period. In addition, as per the Insolvency and Bankruptcy Code (Amendment) Act, 2018 which has come into force w.e.f. 06.06.2018, the provisions of moratorium shall not apply to the surety in a contract of guarantee to the corporate debtor in terms of Section 14(3)(b) of the Code. 50. The Interim Resolution Professional shall perform all his functions contemplated, inter alia, by Sections 15, 17, 18, 19, 20 & 21 of the Code and transact proceedings with utmost dedication, honesty and strictly in accordance with the provisions of th....