TaxTMI 
TaxTMI 
2020 (4) TMI 679
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....pees Twelve Lakh Nineteen Thousand Seven Hundred and Sixty Eight only). 2. Brief facts of the case, as mentioned in the Company Petition, which are relevant to the issue in question, are as follows: (1) Mr. R.V.S Rao and Mrs. Lakshmi Rao, the Petitioners here in, are Financial Creditors, who have invested to finance the project for development of Project of Corporate Debtor with Buy back promises and arrangements. (2) M/s. B and B Infrastructure Limited (hereinafter referred to as ('Respondent/Corporate Debtor/Company') was incorporated on 14-7-1987 under the provisions of Companies Act, 1956 with CIN: U85110KA1987PLC008488 having its registered office 4th Floor, 'Orbis', PID No. 76-15-61, 2nd Cross, Residency Road, Bengaluru - 560 025. Its Authorised Share Capital is Rs. 5,00,00,000/- (Rupees Five Crores Only) and Paid-up Share Capital is Rs. 2,35,32,250/-(Rupees Two Crores Thirty Five Lakh Thirty Two Thousand Two Hundred and Fifty Only). (3) It is stated that one Smt. Munna Bai and others, the owners of the immovable property bearing Survey Nos. 47/1A, 47/2A, Corporation No. 47/48-4 and presently bearing New Municipal No. 4 with Uniqu....
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....r rights under the Agreement of sale and Construction Agreement in favour of any person/s identified by the Petitioners, then in case the sale price and consideration agreed to be paid by such assignee or nominee is less than the minimum buy back price reserved and agreed to under that particular Buy back agreement then, in that event the Respondent Company shall be bound to pay to the Petitioners , the difference between the sale price and consideration agreed to be paid by assignee or nominee of the Petitioners and the minimum buy back fixed between the parties and agreed to by your company. (6) It is stated that the buy back price as agreed in the buy back agreements dated 27-6-2015 for each of the apartment is mentioned below: Sl. No. Apartment Buy back Price 1 6C Rs. 3,75,36,000 2 6D Rs. 4,81,92,000 3 7C Rs. 3,69,24,000 Total Amount Rs. 12,26,52,000 (7) It is stated that the Petitioners, after completion of the 3 year waiting period stipulated under the buy back agreement dated 27-6-2015, have exercised the first option available to him under clause V (a) of the buy back agreements in the first week of Augus....
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....tement of Objections dated 11-1-2020 by inter alia contending as follows: (1) The Respondent is a Company incorporated in the year 1987, which is involved in the business of developing and constructing high-end luxury residential and commercial complexes, and has completed several residential and commercial projects across South India, spanning 2.5 million square feet. The Respondent Company delivers superior value through extraordinary and imaginative spaces created out of deep customer focus and insight. (2) It is stated that the Code was further amended as per I & B code (Amendment) Ordinance 2019 published on 28th December 2019. The said Ordinance came into force on 28th December 2019. Therefore, the Petition itself is not maintainable as they failed to satisfy the conditions mentioned in the said amendment. (3) It is solvent and profit-making entity and its revenue and profit over the last three years is as follows: Sl. No. Year (F.Y) Revenue (in INR) Profit before tax in INR) 1. 2016-17 2,78,89,711 96,16,532 2. 2017-18 1,60,44,607 1,05,93,491 3. 2018-19 6,57,64,421 1,89,13,161 The Respon....
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....red into an Agreement dated 27-6-2015 with the Respondent and under the terms of the agreement the Petitioners have claimed the buy back price as follows: Sl. No. Apartment Buy back Price 1 6C Rs. 3,75,36,000/- 2 6D Rs. 4,81,92,000/- 3 7C Rs. 3,69,24,000/- It is stated the clause V (a) of the agreement states that the minimum buy back price is Rs. 1,62,36,928/- (Rupees One Crore Sixty Two Lakh Thirty Six Thousand Nine Hundred and Twenty Eight). Further stated that the Petitioners contended that the minimum buy back price for apartment 6D is Rs. 4,81,92,000/-. The difference between the two amount is Rs. 3,19,55,072/-. Accordingly, the claim of the Petitioners is also significantly reduced. It is alleged that the Petitioners have made a false and malicious claim with mala fide intention to cause deliberate harm to the Respondent. Subsequent to the return of Rs. 4,13,34,068/- the agreement to sell and constructions agreement are deemed to have been cancelled. Further stated that the Petitioners are not homebuyers. (8) It is stated that there is a significant dispute in the claimed amount, which can be determined and adjudica....
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....Real Estate sector, especially high-end luxury sector in real estate is undergoing a slump. All real estate companies are facing delays in completion and delivery of projects. The real estate sector is also facing severe financial crunch. The markets and the real estate industry in general is still coming to terms with the new regulatory regime. In light and despite these unfavourable circumstances and environment, the Respondent has been remarkably been able to complete most of the projects and is shortly expecting capital infusion into this project. The Petitioner No. 1 spent considerable time in various capacities in the finances and real estate sector. The Petitioner is on the Board of few well known real estate companies. He is very well aware of the market situation and the problems faced by the stakeholders. Knowing well about the business of Real Estate Sector, the Petitioners have initiated the instant proceedings against the Respondent with an ulterior intention and only to cause reputational damage to the Respondent. Therefore, they have urged the Adjudicating Authority to dismiss the Petition. 4. Heard Mr. Sanjay Nair, learned Counsel for the Petitioners, and Mr.Shya....
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....d thus urged the Adjudicating Authority to dismiss the instant Petition. 7. Before adverting the issue of debt and default question, it is necessary to refer relevant terms mentioned in three Agreements even dated 27-6-2019, Clause V; It is clearly agreed to between the parties that as on 5th August 2018, in spite of the fact whether the project has achieved the practical completion or not, the Second Party shall have the absolute discretion to exercise the following options: a. Option to offer the Schedule B property and the Schedule C Residential Apartments to the First Party for a buy back after completion of three (3) years from the date of commencement of the project, at a minimum price (hereinafter referred to as the minimum buy back price) of Rs. 3,75,36,000/- in which event, the First Party shall be bound to accept the offer made by the Second Party and effect as a one-time payment for the same within a period of 60 days from the date of offer made against which, the said agreements to sell and the constructions agreements will be cancelled or assigned in favour of person/s identified by the First Party. b. It is further agreed to betw....
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.... dispute if any arises is whether the Respondent is liable to pay the difference of buy back price in the absence of mentioning about payment of interest. Moreover, once the Respondent exercised first Option, the Sale Agreements in question also stands cancelled and any dispute arise out of first option, the Party has to invoke provisions of Specific Performance Act, 1963 as per clause VIII to enforce the terms of Agreements in question. 8. As per general clause V of the Agreements in question, one of the options available to the Petitioners is to offer the scheduled Property to the Respondent to Buy Back the Flats in question at minimum price mentioned therein. In the event, the Petitioner exercise first option, the Respondent is bound to accept the offer and thus pay such amount as a one-time payment within a period within a period 60 days from the date of offer and resultantly the Constructions Agreements and Agreements to sell in question stand cancelled or to be assigned in favour of persons identified by the Respondent. And as per clause VI of the Agreements, Agreements to sell and Constructions should be ready together for interpretation. However, the Petitioners have not....
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....due liberties of my kindness and. understanding. Instead of appreciating my stand on the issue, its very unfortunate and sad you chose to speak to me when I have done no wrong. Ou please ask yourself on your heart whether I deserve such a treatment. (b) Email dated 5-3-2019 (Page 187 Annexure -0) reads as under: Dear Mr. Bhaskar, I am referring to my mail of 14th January on the above subject. You are kindly aware of that the discussions we are having on the above subject. You are also aware that I spoke to you on the subject and you requested for some more time. Finally unilaterally decided that you will pay the amounts that were due as per options in respect of two flats, first one on Jan 2nd 2019 and the second one on 2nd March 2019. You have paid so far only 3 crore and the balance is yet to be paid. Now as per your commitment you have to pay all the amount due in respect of two flats by 2nd March 2019. What is the status? Last time when we spoke, you had mentioned that you will clear all the amounts due well before 2nd march as you have finalized the sale of your office. I have not heard anythin....
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....nt of all three Agreements in question in two instalments viz Rs. 3,00,00,000/- (Rupees Three Crores only) on 1-1-2019 and Rs. 1,13,34,068/- (Rupees One Crore Thirteen Lakhs Thirty Four Thousand and Sixty Eight only) on 20-6-2019. Admittedly, there is no interest mentioned in the Agreements in question. However, the Petitioners added interest too unilaterally. Another material blunder committed in making claim in the instant Petition is that though buy back price mentioned in the Agreement for Residential Apartment bearing 6 D was mentioned as Rs. 1,62,36,928/, it was wrongly claimed Rs. 4,81,92,000/which is the price fixed for second option. There is no mention of interest either in the Agreements or Agreement to sale and Development Agreement. However, interest for Rs. 12,19,768/- was claimed @ 18 p.a without mentioning it in Agreements and unilaterally. So the claim made in the Petition is not made even as per Agreements in question and debt itself is disputed. The Petitioners have not exercised their option in the first instance to claim further amounts that too after accepting principal amount in total. Even as per Agreements in question, there are two options for the Petition....
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....aid? (c) Whether there is existence of dispute between the parties or the record of the pendency of a suit or arbitration proceeding filed before receipt of demand notice of the unpaid operational debt in relation to such dispute? If any one of aforesaid conditions is lacking, the application would have to be rejected. 12. As stated supra, the Respondent Company is admittedly solvent and profit and reputed Company, having successfully executed 25 projects across South India, and the Project B & B Opulent Spire, the current project of the Respondent Company, in which the Petitioners have invested three Flats, as detailed, is stated to be one of the most innovative and ambitious real estate projects in. Bengaluru, constructed at the heart of one of the busiest and hi-profile areas in Bangalore. The project is a 24-storey structure with 86 apartments that embodies every nuance of an elite lifestyle. And the project is almost completed and the structure of the building is complete and interiors are ongoing to be completed. Therefore, the Petitioners have the second option to get Flats registered in their name as per the Sale Agreement. However, the Petitioners choose to ....