TaxTMI 
TaxTMI 
2020 (10) TMI 737
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....icants are allottees in the real estate project namely "Monde de Provence" to be developed by the Corporate Debtor/Respondent. The applicants being the Financial Creditor, who owes the financial debt within the meaning of Section 8(f) of the Code, in response to public notice issued by the IRP, filed a statutory claim with the IRP for considering their claim as Financial Creditor. It was further submitted that applicants are the owner of agricultural lands vide registered sale deeds. Both the applicants entered into separate Supplementary Collaboration Agreements with the Corporate Debtor on 17.05.2011. On the basis of the agreement, the applicants and the Corporate Debtor agreed to share the project in a ratio of 45:55 respectively and the share of the parties are to be determined after the completion of construction and development work. Further, as per the Clause 20 of the agreement, the developer shall complete the construction and development work of the said group housing project within 42 months from the date of signing of this agreement. If the handing over of possession of owner's share is delayed beyond the expiry of the said period of 42 months, then the developer sh....
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....pdate you accordingly on the status of your claim. Kindly bear with us for another few days. Thanks & Regards" Thereafter, the applicants on 08.07.2019 received an email from the IRP as under:- "Dear Sir, We have analyzed your claim with various clauses of your agreement with Corporate Debtor and taken into consideration various provisions of this IBC, 2016 and Regulations made thereunder and bases on legal opinion received as advised by the CoC in its first meeting dated 17th June 2019, alongwith provisions of several other allied acts but express our inability to treat you as Financial Creditor entitling you to be a part of CoC simply on the ground that you have been allotted flats in this project of Corporate Debtor. In view of the above, you claim as Financial Creditor stands rejected." 4. Further it is submitted by the Applicants that since the applicants are allottees under a real estate project, therefore, they come under the definition of under Section 8(f) read with Section 2(d) of the Real Estate (Regulation and Development) Act, 2016. Further, in the IBC, there are two types of creditors i.e. Financial and Operational and t....
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....himself as a builder, colonizer, contractor, developer, estate developer or by any other name or claims to be acting as the holder of a power or attorney from the owner of the land on which the building or apartment is constructed or plot is developed for sale; or (vi) Such other person who constructs any building or apartment for sale to the general public. Explanation:- For the purposes of this clause, where the person who constructs or converts a building into apartments or develops a plot for sale and the persons who sells apartments or plots are different persons, both of them shall be deemed to be the promoters and shall be jointly liable as such for the functions and responsibilities specified, under this Act or the rules and regulations made thereunder." b. The Hon'ble Apex Court recently in the matter of Pioneer Urban Land Infrastructure Limited and Anr. Vs. Union of India & Ors. W.P. (Civil) No. 42 of 2019 has reiterated what it has already held in the matter of Swiss Ribbons Pvt. Ltd. & Anr. Vs. Union of India & Ors. W.P. (Civil) No. 99 of 2018 that real estate allottees are those who make payments to the corporate debtor in lieu of service....
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....eceived a sum of Rs. 8 crores in as much as the same was subject to taxes. It is also submitted that the amount paid by the Corporate Debtor to the applicant under the said agreement is towards for security for fulfilment of the obligations and promises made by the Corporate Debtor qua the completion and development of the said project. The same is also clearly stated in the clause 17 of the supplementary agreement. It is further submitted that that in lieu to the amount paid by the Corporate Debtor to the applicant under the said supplementary agreement, the built up area to be allotted to the applicant was also reduced by the Corporate Debtor. c. The applicant has also transferred absolute development rights in the said land of the applicant to the Corporate Debtor. It is further submitted that the transfer of the development rights, possession and execution of a power of attorney in the favor of the Corporate Debtor to deal with the land of the applicant and thereby, develop and construct the said project upon the land of the applicant and make profit from the same serves as "part consideration" given by the Applicant. It is submitted that it is only due to such aforeme....
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.... on behalf of both the parties, we shall consider the case of the applicants. We have gone through the averments made in the application, reply & rejoinder as well as decisions filed by the parties and on the basis of that we find that it is an admitted fact of the parties that the applicants had entered into an agreement with the Corporate Debtor on 17.05.2011 and on the basis of that agreement the developer will get 55 per cent whereas the owner's share was 45 per cent and as per the agreement, the land shall be under the possession and control of the applicants but thereafter a subsequent agreement was executed on 18.03.2013 and according to the supplementary agreement in terms of Clauses 8, 9 & 10, new terms and conditions were fixed and the terms and conditions are stated below: "8. That in terms of the said Collaboration Agreement the built up/saleable areas falling to the share of the Owner was 45 percent of the total built up/saleable area. However, the Developer has now assured and represented to the Owner that the proposed apartments in the said Group Housing Colony (in addition to having specifications as given in Annexure 'B' annexed hereto) would b....
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....dual builtup area as mentioned in this paragraph, the Developer has agreed and undertaken toallot one more additional apartment in the said 'Monde De Provence' project without any further payment by the Owner which shall be allotted on the 22nd day from this date. 10. That simultaneously upon execution of this Agreement, the Developer undertakes to issue separate letter of allotment for each apartment failing to the share of Owner's Allocation as specified in Annexure-C. The allotment letter(s) so issued shall besides mentioning the Tower Number and the Floor Number shall also specify the Apartment Number and area thereof. The ratio of Super Area to covered area for the Owner's Allocation shall be uniform for the entire Group Housing Colony." 10. From the perusal, it appears that by subsequent agreement, both the Applicants are allotted 9 flats each and as per terms and conditions, a separate letter of allotment is issued and on the basis of that the applicants claimed themselves to be the Financial Creditors. Before making any comments on the contention of the applicants, we would like to refer Section 5(7) and 5(8) of the Code and the same is quoted be....
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....r transferred. The applicants claimed themselves to be Financial Creditors because according to him a financial debt is owned by the Corporate Debtor. The plain reading of Section 5(8) shows that a financial debt means a debt along with interest which disbursed against the consideration of time value and money and includes any of the Clause (a to i) under Section 5(8) of IBC, 2016. 12. At this juncture, we would like to refer the decision of the Hon'ble Apex Court given in Pioneer Urban Land and Infrastructure Limited & Another V Union of India [Supreme Court of India in WP (Civil) 43/2019] and upon which the Ld. Counsel for the RP in course of his arguments placed reliance. The Hon'ble Apex Court in Para 61 of the Judgment defined the word disbursed, the relevant portion is quoted below: 61. The definition of "financial debt" in Section 5(8) then goes on to state that a "debt" must be "disbursed" against the consideration for time value of money. "Disbursement" is defined in Black's Law Dictionary (10th ed.) to mean: "1. The act of paying out money, commonly from a fund or in settlement of a debt or account payable. 2. The money so paid; an amount ....
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....ats each and that allotment is made because the developer/Corporate Debtor had entered into an agreement with the applicants in respect of land of both Applicants upon which the developer intended to construct the apartment and in terms of the agreement, the share of the developer as well as the land owner is defined. Earlier by the first agreement, the share of the parties was 55:45 percent and by subsequent agreement, the share of the parties was 30:70, and against that share it was agreed that 9 flats will be given to each of the applicants. It is also matter of fact that the developer has to construct the apartments on the land of the applicants and the said land is still under the possession and control of the applicants because as per the agreement after the completion of the project, the applicants were required to execute the sale deed in favour of the person who purchased the flat from the developer. As per the conditions of the subsequent agreement, nowhere in the agreement, it is mentioned that the title and possession of the land is given to the developer rather the same is retained by the applicants. We further find that in lieu of the agreement also the applicants has....
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....or building, as the case may be, is given on rent;" 16. If I shall read Section 2(d) of the Real Estate (Regulation and Development) Act, 2016 along with the Section 5(8) (f) explanation 1, then in the light of the decision given by the Hon'ble Apex Court in Pioneer Urban Land and Infrastructure Limited & Another V Union of India [Supreme Court of India in WP (Civil) 43/2019], we are of the considered view that an allottee come under the definition of Financial Creditor only when any money has been raised from him because Hon'ble Apex Court held that the disbursal must be in terms of money, therefore, when we shall read the definition of allottee given in the Real Estate (Regulation and Development) Act, 2016 then we are of the view that unless the money has been raised from the allottee by the developer under real estate project, the allottee cannot be treated as Financial Creditor. So we find, no force in the contention raised on behalf of the Ld. Counsel for the applicants that since the flats are allotted to them through different allotment letters therefore, they are the allottees and on the basis of that they are Financial Creditors. 17. At this juncture, we wou....
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....planation.--For the purposes of this clause, where the person who constructs or converts a building into apartments or develops a plot for sale and the persons who sells apartments or plots are different persons, both of them shall be deemed to be the promoters and shall be jointly liable as such for the Junctions and responsibilities specified, under this Act or the rules and regulations made thereunder;" 19. At this juncture, we would also like to refer the arguments made by Ld. Counsel for the RP who in course of his arguments submitted that in the Supplementary Collaboration Agreement both the owners and developer shall execute and register the sale deed are the documents. 20. In light of those submissions, we would like to quote that Clause 21 of the agreement and that is quoted below: "21. That the Owner and Developer shall also execute and register the sale deed(s) or such document(s) or instrument(s) including Apartment Buyer's Agreement in favor of the intending purchaser(s) of unit(s)/space(s) car parking etc. in respect of the units, floor space(s) etc. forming part of allocation of both Developer & Owner agreed to be sold to different intending purcha....