TaxTMI 
TaxTMI 
2019 (11) TMI 1522
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....tion to Adjudicating Authority) Rules 2016 for initiation of Corporate Insolvency Resolution Process (CIRP) in the case of Victory Buildestates Pvt. Ltd. (Victory Buildestates). As per Master Data (Annexure A-1 of the petition), the registered address of the Victory Buildestates is Shop No. -GF, 116-G, Sushant Shopping Arcade Building, Sushant Lok, Phase-I, Gurgaon 122002. Therefore, the jurisdiction lies with this Bench of the Tribunal. 2. The application in Form 1 is signed by Shri Aman Doon, Director of the S-Tech. His affidavit verifying the contents of the application is at pages 19 to 21 of the petition. 3. In Part-III of Form 1, Sh. Vijay Kumar Sharma, Registration No. IBBI/IPA-002/IP-N00035/2016-17/10074 has been proposed as Inter....
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....appeal/AT)/(Insolvency) No. 616 of 2018 dated 30.01.2019 and Gaurav Aggarwal Vs. TUF Metallurgical (P) Ltd. and Ors. Company Appeal (AT)/(Ins.) No. 212 of 2019 dated 04.09.2019 and it was pleaded that the provisions of Section 5(8)(f) of the Code would subsume within it amounts raised under transactions which are not necessarily loan transactions, so long as they have the commercial effect of a borrowing. It is pleaded that the amount was advanced by S-Tech to Victory Buildestates /Real Estate Developer for transfer of the complete project in terms of the MOU and thus the amount advanced was advance against consideration of time value of money for a transaction involving transfer of assets of Victory Buildestates (i.e. transfer of affordabl....
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....and Anr. Vs. Union of India & Ors. supra in which the Hon'ble Supreme Court held that Section 5(8)(f) does appear to be residuary provision which is "catch all" in nature and that this is clear from the words "any amount" and "any other transaction" which means that amounts that are "raised" under "transactions" not covered by any other clauses would amount to a financial debt if they had the commercial effect of a borrowing. It was further held that sub-clause (f) Section 5(8) thus read would subsume within it amounts raised under transactions which are not necessarily loan transactions, so long as they have the commercial effect of a borrowing. In para No. 67, the Hon'ble Supreme Court held as under:- "A perusal of these definit....
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.... fact, be subsumed within Section 5(8)(f) even without adverting to the explanation introduced by the Amendment Act". 10. The Hon'ble Supreme Court therefore, held that the expression "borrow" is wide enough to include an advance given by the home buyer to a real estate developer for "temporary use" i.e. for use in the construction project so long as it is intended by the agreement to give "something equivalent" to money back to the home buyers and the "something equivalent" in these matters is obviously a flat/apartment. The Hon'ble Supreme Court held that "commercial" would generally involve transactions having profit as their main aim. The Hon'ble Supreme Court held that so long as an amount is "raised" under a real estate a....
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....dable group housing is to be transferred by Victory Buildestates to S-Tech. The amounts received are therefore, not in the nature of advance given by the home buyer to a real estate developer for "temporary use" i.e. for use in the construction project. The project is to be sold to S-Tech. The funds of Rs. 3.00 crores are not given by S-Tech to Victory Buildestates for any use by Victory Buildestates in the project of affordable group housing at Rewari. The MOU is in respect of a sale of a project of affordable group housing and would not have the "commercial effect" of a borrowing. 13. The learned authorized representatives for S-Tech have relied on Shailesh Sangani vs. Joel Cardoso and Ors. Para No. 6 of this decision is as under:- "A ....
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....unch and the stakeholders like Promoter, Director or a Shareholder may, in order to protect their legitimate interests be called upon to respond to the crisis and in order to save the company they may infuse funds without claiming interest. In such situation such funds may be treated as long term borrowings. Once it is so, it cannot be said that the debt has not been disbursed against the consideration for the time value of the money. The interests of such stakeholders cannot be said to be in conflict with the interests of the Company. Enhancement of assets, increase in production and the growth in profits, share value or equity enures to the benefit of such stakeholders and that is the time value of the money constituting the consideration....