AI Drafter 
Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter. 
TaxTMI 
TaxTMI 
2019 (12) TMI 1173
X X X X Extracts X X X X
X X X X Extracts X X X X
....Corporate Insolvency Resolution Process (CIR Process) was initiated against the Corporate Debtor on 13.07.2018 whereby Mr. T. V. Subramanian was appointed initially as the Interim Resolution Professional who was subsequently replaced by this Authority on 19.07.2018 with one Mr. Premachandran. 3. Consequent to the public announcement under Regulation 6 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons), Regulations, 2016, claims from the creditors seem to have been received by the Resolution Professional. After verification of the claims received, the Interim Resolution Professional constituted Committee of Creditors (COCs) on 18.08.2018. 4. It is evident from Form H that the 1^st meeting of the COC was held on 23.08.2018 and Mr. Sundaresan Nagarajan had been appointed as Resolution Professional on 20.09.2018. It is also evident on perusal of the Form H that the "Expression of Interests" (in short, "Eol") were issued thrice with the last one having been issued on 17.04.2019. At the instance of the COC, on 28.04.2019 the final list of eligible prospective Resolution Applicants were ascertained and the prospective Resolution App....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Certificate as issued by the Resolution Professional in terms of I&B Code, 2016 read with the attendant Regulations discloses that the Resolution Plan complies with all the provisions of the I&B Code, 2016, the CIRP Regulations and does not contravene any of the provisions of the law for the time being in force. 10. It is also brought forth that an Affidavit as required to be submitted by the Resolution Applicant viz., RCC E-Construct Private Limited has also been duly submitted in relation to the eligibility taking into consideration Section 29A of the I&B Code, 2016. 11. It is affirmed in terms of the table as given above that the Resolution Plan has been approved by the COC with 81.39% of voting share of Financial Creditors including Home Buyers have duly approved the Resolution Plan as submitted by the Resolution Applicant and that the voting was exercised in terms of electronic voting system which were kept open for 24 hours as per the Regulation 26 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. 12. From the averments made in the Application as well as in Form-H as filed by the Resolution Professional in relation to the procedur....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n view of the non-co- operative attitude of the persons in the management of the Corporate Debtor in making available of the records, an Advocate Commissioner viz., Mr. Dhanraj was appointed by this Authority vide its Order dated 11.09.2018 and that the said Advocate Commissioner took over the available records and also filed the report before this Tribunal. (iv) The Information Memorandum as circulated to the prospective Resolution Applicants also brings forth the fact that the Company owes by way of tax duties to the Income Tax Department as well as GST, VAT, Service Tax and other statutory dues details of which have also been given in the Information Memorandum in relation to which dues, proceedings seem to be pending by way of an Appeal before Hon'ble High Court of Madras. The composition of COC as on 07.04.2019 has also been disclosed at page 68 of the Resolution Plan from which it is seen that the COC had from time to time, by virtue of orders of this Tribunal undergone a change as compared to the one which was first constituted. 14. Based on the Information Memorandum which has been provided, the Resolution Applicant seems to have filed the Resolution Plan. T....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... final list of prospective resolution applicant after recording the reasons in the 8th COC meeting dated 28.04.2019. Only two Resolution Plan of viz., the successful Resolution Applicant and one M/S. Annai Builders Real Estates (P) Ltd. were taken up and was placed for consideration by the COC for determining /ascertaining the Resolution Plan filed on the basis by consideration of Evaluation Matrix in relation to the Resolution Plans as submitted by the two Resolution Applicants to the following effect: SL. NO EVALUATION PARAMETERS SCORE RCC ANNAI 1 Submission of Composite 50 50 2 Net Worth 10 50 3 Time Frame For Construction 75 100 4 Time Frame for Payment to Lenders 25 50 5 Additional Amount Demanded from Homebuyers 0 0 SR. NO EVALUATION PARAMETERS SCORE RCC ANNAI 1 Sunshine 0 30 2 Dreamz 20 25 3 Innova 0 0 4 Matrix 0 0 5 Icon 0 10 6 Upfront Payment to Lenders 0 0 7 Aggregate NPV 150 100 8 Funding Arrangement 100 0 9 Commitment to Pay Operational Credi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s of publishing advertisement for the Corporate Debtor and filed their claims with the RP and which have been accepted. As per the Resolution Plan, being the Liquidation value is NIL, the Resolution Applicant proposes to pay the Operational Creditors herein 1.5% of the admitted claim amount. Aggrieved by the said proposal, the applicants have filed the present MA. (ii) MA/878/2019 - (Themes Adz) The Applicant is an Operational Creditor who had rendered services of publishing advertisement for the Corporate Debtor and filed their claims with the RP and which have been accepted. As per the Resolution Plan, being the Liquidation value is NIL, the Resolution Applicant proposes to pay the Operational Creditors herein 1.5% of the admitted claim amount. Aggrieved by the said proposal, the applicants have filed the present MA. (iii) MA/879/2019 - (S. Rani) The Applicant is an Operational Creditor who had rendered services of publishing advertisement for the Corporate Debtor and filed their claims with the RP and which have been accepted. As per the Resolution Plan, being the Liquidation value is NIL, the Resolution Applicant proposes to pay the Operation....
X X X X Extracts X X X X
X X X X Extracts X X X X
....st the principle as laid down by Hon'ble NCLAT in Binani and in Central bank of India v. RP of Sirpur Paper Mills. Profit to be earned by the Resolution Applicant is 89 Crores, whereby only 1.5% of the dues of OC's are being settled, which is nothing but unjust enrichment. Hence prayed not to approve the Resolution Plan. (vi) MA/629/2019 - (Sai Trading & Interiors) Same facts as stated in MA/625/2019, and in addition being unsuccessful in filing the Resolution Plan, sought relief to declare the resolution made during the 8th COC, dropping the applicant from the final list of prospective resolution applicants as illegal, unjust and unconstitutional and to direct the RP to treat the applicant on par with the financial creditor in settlement of the claim. (vii) MA/630/2019 - (B. Akhilandeswari) The Applicant viz. B. Akhilandeswari, is a work contractor and she was engaged by the Corporate Debtor in the project "Dreamz". The RP has admitted the Claim of the Applicant to the tune of Rs. 1,54,12,142/-. As per the Resolution Plan, being the Liquidation value is NIL the Resolution Applicant proposes to pay the Operational Credit....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... refund earlier, his flat was sold to a third party, who has also lodged a claim. Aggrieved by the same, the present MA has been filed. (xi) MA/819/2019 - (V. Sampath Kumar) The applicant is a land broker and arranged land to the Corporate Debtor for construction of flats and entered into three different agreements with the Corporate Debtor for payment of land Brokerage Commission. The applicant claims to be a Financial Creditor, submitted a claim to the tune of Rs. 60,87,045 to the RP on 14.12.2018, however it was rejected. Aggrieved by the same, the present MA has been filed. (xii) MA/627/2019 - (S.R. Mahendran) The applicant is a home buyer in one of the projects of the Corporate Debtor viz. "Innova". The Applicant submitted a claim to the Resolution Professional for a sum of Rs. 21,15,915/- and the Resolution Professional admitted the claim only to the extent of Rs. 3,85,608/-. Aggrieved by the same, the present MA has been filed. (xiii) MA/436/2019 - (Mrs. Manjula) The applicant is a home buyer in one of the projects of the Corporate Debtor viz. "Innova". The Applicant submitted a claim to the Resolution Professional for a ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eration of the objections as raised above by way of Application or otherwise, it would be appropriate to consider the Resolution Plan per se to which the approval is sought for. 21. ANALYSIS OF THE RESOLUTION PLAN - MA/554/2019 21.1. This Tribunal is duty bound to examine the Resolution Plan within the contours of Section 30(2) of the IBC, 2016. A comparison vis-å-vis with the Mandatory compliance under the IBC and the Compliance made under the Resolution Plan is captured hereunder; MANDATORY COMPLIANCE UNDER IBC CODE AND REGULATIONS COMPLIANCE UNDER RESOLUTION PLAN S. 30(1) - Resolution Applicant to submit an affidavit stating that he is eligible under Sec.29A of the code, 2016 The Affidavit of the Resolution Applicant (RA) is placed on record and the RP in Form H has certified that the RA has submitted an affidavit and the said affidavit is in order. S. 30(2)(a) - Payment of Insolvency and Resolution cost in the manner specified by the Board Form H has stated that 4.2 and 4.10 of the Resolution Plan satisfies this condition, The CIRP Cost is arrived at Rs. 1.5 Crores as stated in Annexure - 2A at page 182. S. 30(2)(b) - Payment of debts of Operati....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tation d) it has provisions for approval required and the timeline for the same e) the resolution applicant has the capability to implement the resolution plan Clause 3.5 of the Resolution Plan address the default as multiple preferential, undervalued and fraudulent transactions, also the books of accounts have not been maintained in proper manner for last 3 to 5 years. Infusion of funds from various stakeholders might not have been adequately invested in the assets of the Corporate Debtor. Clause 3.6 states about Source of Funds Clause 2.11 (d) has provisions for approvals required and timeline for the same. S. 30(2)(e) - Does not contravene any of the provisions of the law for the time being in force In Clause 2.6 of the Resolution Plan, the RA states that the Plan is in Contravention of the not provisions of any law. S. 30(4) - Committee of Creditors approve the Resolution Plan by not less than 66% of voting share of Financial Creditors, after considering its feasibility, viability and such other requirement as specified by the Board Approved by 81.39% of voting in the 11th COC Meeting held on 28.05.2019. 16.07% - Dissented 2.54% - Abstained 2....
X X X X Extracts X X X X
X X X X Extracts X X X X
....itors - Sanchit Sales and SSP Industries It is stated in the Resolution Plan that Sanchit Sales and S.S.P. Industries, the facilities were provided against a particular project i.e. Panchvarna Project. The list of assets of the CD as provided by the RP does not include any inventory of Panchvarna Project as asset of CD, so it is assumed by the RA that entire inventory has been sold off and no security interest is available, hence they are treated as unsecured FCS and are being paid 10% of the principal admitted claim amount. (iii) Financial Creditors - Home Buyers a. Principal amount admitted by the RP has been treated as the amount received for the Sale of Unit. The amount to be recovered from the Home Buyers is the difference between the Principal admitted and Agreement value. In addition to that amount, the Home buyers are required to pay an additional amount, the project-wise details of amount payable are as follows; PROJECT Incremental Demand Per Sq. ft. (excluding Taxes Innova For units sold at Rs. 2400 per sq.ft. above Rs. 710 For units sold at Rs. 2400 per sq.ft. below Rs. 1235 Matrix For uni....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lability of cash flow. Further, it has been stated that upon effective date, all the existing employees of the Company shall stand terminated and the Resolution Applicant shall be entitled to recruit fresh personnel. (vi) Statutory dues; it has been stated in the Resolution Plan that the statutory Departments have not filed any claim with the RP and therefore they are not treated as OC. However, 1.5% of the admitted claim is being paid, and the same shall be paid after payment of operational creditor and financial creditor from the balance surplus available after payment of minimum amounts provided of financial creditors and operational creditors. Payment details in Lakhs (INR) Payout H1 H2 H3 H4 H5 H6 H7 H8 H9 H10 Total CIRP cost 150 150 Operational Creditors 20 20 Employees 47 47 Statutory Dues 35 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ess. 22. OBJECTIONS RAISED BY THE OPERATIONAL CREDITORS 22.1. The Operational Creditors have filed 8 Applications viz. MA/877/2019, MA/878/2019, MA/879/2019, MA/625/2019, MA/626/2019, MA/629/2019, MA/630/2019 and MA/798/2019 objecting to the approval of the Resolution Plan. Except MA/626/2019 and MA/629/2019, the facts and the relief sought for in other MA's are similar. Hence the other 6 MA's viz. MA/877/2019, MA/878/2019, MA/879/2019, MA/625/2019, MA/630/2019 and MA/798/2019, filed by the Operational Creditors are first taken up for consideration. 22.2. In relation to the 6 MA's filed by the Operational Creditors, the main contention raised by them is that the claim which they have filed before the Resolution Professional has been accepted in toto, however, the Resolution Applicant, in the Resolution Plan has proposed to pay only 1.5% of their admitted claim. It has been further contended by the Ld. Counsels for the Applicants that they are also liable for its creditors for the goods supplied /services rendered to it and if such a haircut is approved then it would cause an irreparable loss not only to the Applicant but also to its creditors. In support of the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ld have better rights if the corporate debtor was to be liquidated rather than a resolution plan being approved. This would defeat the entire objective of the Code which is to first ensure that resolution of distressed assets takes place and only if the same is not possible should liquidation follow". Again in para 56 and 57, it was held as follows; "56. . ...The amended Regulation 38 set out in paragraph 77 again does not lead to the conclusion that financial and operational creditors, or secured and unsecured creditors, must be paid the same amounts, percentage wise, under the resolution plan before it can pass muster. Fair and equitable dealing of operational creditors' rights under the said Regulation involves the resolution plan stating as to how it has dealt with the interests of operational creditors, which is not the same thing as saying that they must be paid the same amount of their debt proportionately. Also, the fact that the operational creditors are given priority in payment over all financial creditors does not lead to the conclusion that such payment must necessarily be the same recovery percentage as financial creditors. So long as the provisions of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....smissed. 22.6. In relation to the objections filed by the Operational Creditor in MA/626/2019, the Ld. Counsel for the Operational Creditors contended that one Mr. Manoj Dassani, participated as representative of the DMI Finance, all of sudden during the meeting held on 06.04.2019 shown as a representative of the Resolution Applicant. Further it was contended that the Eligibility Criteria for Resolution Applicants was fixed as Rs. 10 Crores and how the present Resolution Applicant with a turnover of Rs. 1,65,00,000/- was permitted to submit a plan and as already stated the payment of 1.5% of the admitted amount of claim as full and final settlement is against the principle as laid down by Hon'ble NCLAT in Binani (supra). The Ld. Counsel for the Operational Creditor has further contended that the profit to be earned by the Resolution Applicant is 89 Crores, whereby only 1.5% of the dues of OC's are being settled, which is nothing but unjust enrichment and under these circumstances, it was prayed not to approve the Resolution Plan. 22.7. In relation to the MA/629/2019, it was contended by the Ld. Counsel for the Applicant that they had submitted a Resolution Plan before....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d such other conditions as may be specified by the Board, to submit a resolution plan or plans; (i) ............ (j) ........... (k) .......... In this context, it is also relevant to refer to Regulation 36A (10) to (12) of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016; 36A. (10) The resolution professional shall issue a provisional list of eligible prospective resolution applicants within ten days of the last date for submission of expression of interest to the committee and to all prospective resolution applicants who submitted the expression of interest. (11) Any objection to inclusion or exclusion of a prospective resolution applicant in the provisional list referred to in sub-regulation (10) may be made with supporting documents within five days from the date of issue of the provisional list. (12) On considering the objections received under sub- regulation (11), the resolution professional shall issue the final list of prospective resolution applicants within ten days of the last date for receipt of objections, to the committee. Thus, a conjoint reading of Section 25(2)(h) of the IBC, 2....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t. RP informed the members that 1M need to be shared and after submission of resolution plan, it is upto the COC to accept or reject the resolution plan. Ms. Namrata Kataria strongly objected to sharing of the Information Memorandum to M/S. Sai trading and Interiors. Mr. Sunil Patodia strongly objected for not including M/S. Sai Trading and Interiors in the final list of prospective resolution applicant. After discussion, it was decided by the members that M/S. Sai trading and Interiors may be dropped from the final list of prospective resolution applicants. The following resolution is passed by the members. "RESOLVED THAT the final list of prospective resolution applicants shall comprise of only four of the parties in the provisional list except M/S. Sai trading and Interiors". 22.10. Thus, a perusal of the minutes of the 8th COC reveals the fact that exclusion of M/S. Sai Trading and Interiors from the prospective list of resolution applicant was deliberated upon by the COC in its 8th COC meeting dated 28.04.2019 and the COC and the Home buyers had serious doubts as to the capability, competence, quality, bonafide and finan....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ity. Hence, in view of the discussions made supra, the objections raised by the Applicant are overruled and as a consequence the MA/626/2019 and MA/629/2019 stand dismissed. 23. OBJECTIONS CREDITORS RAISED BY DISSENTING FINANCIAL 23.1. The MA/641/2019 has been filed by the sole Dissenting Financial Creditor viz. Sanchit Sales Private Limited. It is submitted by the Ld. Counsel for the Dissenting Financial Creditor that the Applicant invested in the project of the Corporate Debtor by way of advancement of loans to the projects viz. "Flora" and "Panchavarna". The Applicant along with M/S. SSP Industries Private Limited jointly invested by way of loan to the tune of Crores, wherein it was agreed pursuant to the investment the CD will allot flats and vacant land which were to be held as collaterals by the Applicant. After the initiation of the CIR Process, the Applicant on 03.12.2018 submitted claim to the tune of Rs. 4,58,03,649/- with principal amount of Rs. 1,41,00,000/-. There was no reply from the Resolution Professional in spite of reminded mails from the Applicant. However, the Resolution Professional has requested the Applicant to attend the 5th COC meeting. In the said C....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o 6 Does the creditor hold a charge registered under the Companies Act, 2013 No Yes Yes No 7 Position under Section 1) waterfall - vide Section 30(5) of Code (b)(ii) (b)(ii) (d) 8 Grouping done in Resolution Plan based on the nature of differing "Security Interest". Home Buyers with "deemed" security interest Secured Financial Creditors with higher /better "Security Interest" Unsecured Financial Creditor without "Security Interest" 23.3. Upon the rationale adopted by the Resolution Applicant, Counsel for the Resolution Professional contended that "Security Interest" as defined under the IBC, 2016 is of the widest amplitude and given the special situation of the Corporate Debtor being in the field of Real Estate development, a broader definition of Secured Creditor and Security Interest as defined under Section 3(30) and 3(31) of the IBC, 2016 has been adopted to differentiate amongst the Financial Creditors under the Plan. It was further submitted that based on the nature of the "Security Interest", the above table differentiated the Financial Creditors into three classes and based on such differentiation, pay - out....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tain his claim. However, the Ld. Counsel for the Resolution Professional referred to Clause 4.4 (xv) of the Resolution Plan, wherein a 60 days window has been provided after approval of the Resolution Plan, so that similar home buyers who had failed to file their claim could do so and they will be considered by the Resolution Applicant. 24.4. Taking into consideration the said representation and also in view of the fact that the Applicant has failed to lodge his claim before the Resolution Professional within the prescribed time period and also no proper claim form was being lodged before the Resolution Professional even after the prescribed time limit, we are constrained to dismiss MA/659/2019. Eventhough the Supreme Court in Essar Steels (supra) has held that a successful resolution applicant cannot suddenly be faced with "undecided" claims after the resolution plan submitted by him has been accepted as this would amount to a hydra head popping up which would throw into uncertainty of amounts payable by a prospective resolution applicant who successfully takes over the business of the corporate debtor, the Clause 4.4 (xv) of the Resolution Plan, provides for a 60 days window, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the Applicants is not justifiable. 24.8. The Ld. Counsel for the Resolution Professional submitted that the applicant as a part of the claim had provided proofs which were mutually inconsistent and not in accordance with law and further the applicant had failed to furnish proper and complete proof for the entire claim amount in accordance with Regulation 8A and therefore the claim of the applicant has been accepted only to an extent wherein the market value as mentioned in the Registered Sale Deed together with the notional compensation amount thereupon. It has also been contended by the Ld. Counsel for the Resolution Professional that a document styled as "No dues Certificate" has been provided by the Corporate Debtor to the Applicant, stating that a specified sum has been provided and no further amount is due from the Applicant. It was further contended that the full consideration had been purportedly paid in full on the date of "No due Certificate", however the Construction Agreement was entered into between the parties on a subsequent date records that a particular sum was purportedly paid and as such there are mutual inconsistency with the documents produced by the Applican....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d to Home Buyers having a proper right, title and interest. 25.4. The allocation of 20% of the admitted sum payable to this category of claimants to which the Applicants belong, has been made taking into account, the claims of the priority stakeholders, particularly Home Buyers, whose protection of interest, has consistently been affirmed and reiterated by both the Hon'ble NCLAT and Hon'ble Supreme Court, including the one in Pioneer Urban Land & Infrastructure & Anr -Vs- Union of India & Ors. in W.P. (Civil) No. 43 of 2019. 25.5. Thus, the rationale adopted by the Resolution Professional is reasonable, just and fair and we find no fault with the decision of the Resolution Professional in categorizing the claims of these Home Buyers as "Duplicate Claims". However, during the course of arguments, the successful Resolution Applicant, upon considering the genuinity of these category of Home Buyers, has proposed to increase the payout to 30% of the admitted claim as compared to the 20% presently provided and the Resolution Applicant has also filed an affidavit on 29.10.2019 vide SR. No. 5422. 25.6. In the circumstances, the objections raised by the Home buyers in MA/71....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion Plan. 26.5. The Resolution Applicant has filed a reply to the objections filed by the Income Tax, wherein it was pertinently stated that the present Resolution Plan had been prepared by the Resolution Applicant considering that the relief /waiver sought under the relevant provisions of the Income Tax, 1961 will be granted to the Resolution Applicant. 26.6. As regards the Relief and Concession in the Resolution Plan, it is relevant to refer to the recent decision of the Supreme Court in Embassay Property Limited -Vs- State of Karnataka in Civil Appeal No.9170 of 2019 dated 03.12.2019, wherein, the powers and jurisdiction of this Tribunal have been clearly delineated and it has been held wherever the Corporate Debtor has to exercise a right, that falls outside the purview of IBC, 2016, especially in the realm of the public law, this Tribunal does not have any jurisdiction to pass any orders. Also, the Hon'ble NCLAT in JSW Steels Ltd. - Vs- Ashok Kumar Gulla & Ors in Company Appeal (AT) (Insolvency) No.467 of 2019 has held that if a Successful Resolution Applicant is entitled to 'carry forward losses' under Section 79 of the Income Tax Act, it may claim such bene....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ove or not to approve the proposed resolution plan. In such a case, non- recording of reasons would not per-se vitiate the collective decision of the financial creditors. The legislature has not envisaged challenge to the "commercial/business decision" of the financial creditors taken collectively or for that matter their individual opinion, as the case may be, on this count." 27.2. The Ld. Counsel for the Resolution Professional stated that the Resolution Plan has been submitted by the Resolution Applicant keeping in view that the Corporate Debtor is into the business of Real Estate and that there arises a special situation which demands special dispensation and in support of his submissions relied upon the Judgment of the Hon'ble NCLAT in IDBI Bank -Vs- Anuj Jain (Jaypee Infratech Ltd.) in I.A.No.1857 of 2019 in Company Appeal (AT) (Insolvency) No.536 of 2019 dated 02.07.2019 wherein it is held as follows; "In a real estate business, the business is limited to a particular project and primary business is to allot constructed area to the Allottees. For keeping the company, a going concern and for maximization of the assets, the only way is to complete the infrastru....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... which allotment had been made. It was a duty of concerned officials; they are not only enjoined to ensure that the rights of the home buyers are protected but also the interests of the authorities; and bankers. The public authorities are duty- bound to observe that the leased property is not frittered away along with the money of the home buyers. Affirmative action was clearly enjoined upon them not only under the statutory provisions of various enactments but also under the public trust doctrine that has evolved over the years by this Court. 98. .......... It cannot be denied that lifetime savings Of homebuyers have been invested for purchase of a house with the faith and trust they have given the money. The scheme of the Government is to promote the real estate for which land had been acquired, even poor farmers have not been paid the compensation. The land allotted at throw away prices of 10%, the allotment premium has not been paid and in an illegal manner plots have been allotted on huge amount by builders is another fraud in collusion with Authorities. 27.4. This Tribunal has done an extensive analysis of the Resolution Plan and upon a question put forth by the T....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ruction of such flats/apartments. This being the case, it was important, therefore, to clarify that home buyers are treated as financial creditors so that they can trigger the Code under Section 7 and have their rightful place on the Committee of Creditors when it comes to making important decisions as to the future of the building construction company, which is the execution of the real estate project in which such home buyers are ultimately to be housed. 40. ......ln real estate projects, money is raised from the allottee, being raised against consideration for the time value of money. Even the total consideration agreed at a time when the flat/apartment is non-existent or incomplete, is significantly less than the price the buyer would have to pay for a ready/complete flat/apartment, and therefore, he gains the time value of money. Likewise, the developer who benefits from the amounts disbursed also gains from the time value of money. The fact that the allottee makes such payments in instalments which are co-terminus with phases of completion of the real estate project does not any the less make such payments as payments involving "exchange", i.e. advances paid only in ....