TaxTMI 
TaxTMI 
2021 (6) TMI 554
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....ces of the case. 2. The factual matrix of the case is that the petitioner is a real estate Company involved in the development of various housing and apartment projects, and had floated multiple projects since its inception in 2012. The petitioner-Company had executed an Agreement of Sale and Memorandum of Understanding with thousands of homebuyers for sale of apartments in these under construction projects. As per the agreement, the homebuyers were asked to pay certain amount as advance money or earnest in lieu of booking their apartments in the said projects. The apartments were not handed over after collecting advance money from the home buyers. 3. The respondent is a Constituted Authority, appointed by the Government of Karnataka under Section 5(1) of the Karnataka Protection of Interest of Depositors in Financial Establishment Act, 2004 (for short 'the Act, 2004') vide notification bearing No.RD.17.GRC 2017(P-2) dated 20.06.2019. Consequently, the respondent has initiated Section 7(1) of the Act, 2004 against the petitioner and the same has been admitted by the Principal City Civil and Sessions Judge (Special Judge), Metropolitan Area, Bengaluru on 09.01.2020. He....
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....e petitioner. However, the respondent has acted unilaterally showing no due regard to the interest of the various parties involved. Inspite of maintaining continuous conversation and updating respondent, AC did not hand over the properties as per law. Respondent-AC initiated action under Section 7 of the Act, 2004, which is non-est and illegal in view of Sections 14 and 238 of the IBC Act, 2016. Inspite of such attachment and holding the custody of the properties, have allowed the sale transactions and Court transfers without restrictions, leading to loss of prime properties in the hands of few self-centered people. Hence, without alternative, the petitioner-Company have approached this Court by filing this petition. 6. Learned counsel appearing for the petitioner in this petition would vehemently contend that the State has no right to invoke the Act, 2004. The provisions of Sections 14 and 238 of the IBC has overriding effect and as such the said provisions would prevail over the State Act. Learned counsel also would vehemently contend that an order has been passed by the NCLT and moratorium has been commenced. When the moratorium is in force, the present proceeding has been in....
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....ter which a temporary moratorium in much the same manner as that contained in Sections 13 and 14 of the 2016 Code takes place under Section 4 of the Maharashtra Act. There is no doubt that by giving effect to the State law, the aforesaid plan or scheme which may be adopted under the parliamentary statute will directly be hindered and/or obstructed to that extent in that the management of the relief undertaking, which if taken over by the State Government, would directly impede or come in the way of taking over the management of the Corporate Body by the interim resolution professional. Also, the moratorium imposed under Section 4 of the Maharashtra Act would directly clash with the moratorium to be issued under Sections 13 and 14 of the Code. 11. Learned counsel also brought to the notice of this Court to Section 238 of the Code, which overrides the other law. The later non-obstante clause of the parliamentary enactment will also prevail over the limited non-obstante clause contained in Section 4 of the Maharashtra Act. For these reasons, the Apex Court held that Maharashtra Act cannot stand in the way of the Corporate Insolvency Resolution Process under the Code. The non-obstan....
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....ment Pleader appearing for the respondent-State would vehemently contend that this petition is filed seeking the relief of quashing of the proceedings initiated under Section 7 of the Act, 2004 and not taken any cognizance for the offence under the said Act. Section 9 of the Act confers all powers and the same vests with the Government. In the case on hand, the learned High Court Government Pleader would vehemently contend that an amount of Rs. 385 Crores was collected by the petitioner herein and not allotted any flats. Hence, the State has attached the properties and the notice is also issued against the petitioner under Section 12 of the Act, 2004. The very petition itself is not maintainable. 16. The learned High Court Government Pleader would vehemently contend that if any order has been passed invoking Section 12 of the said Act, an appeal lies under Section 16 of the Act, before this Court. This is an alternative remedy provided to the persons, who suffered at the hands of the petitioner and the matter is still pending before this Court with regard to which, the Act will prevail. Hence, there cannot be any quashing of the proceedings. 17. Having heard the learned couns....
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....n, sell, allot houses, apartments, flats or part thereof to the shareholders or any other person on such terms and conditions as may be deemed fit by the Company. The petitioner-Company is also not disputing the fact that they have collected the money and they have neither refunded the money nor allotted the flats to the homebuyers, who invested the money. Hence, the main contention of the petitioner's counsel that the petitioner is not the financial establishment and thus, the Act, 2004 is not applicable, cannot be accepted. 19. The Court has to take note of statement of objects for bringing the enactment. The very object is to prevent committing default in return to the public, the deposits on maturity and thereby cheating the depositors of their legitimative due. The term "default" to include fraudulent failure to return the deposits or pay interest, bonus and profit or perform service promised. The term "deposit" is defined under Section 2(2) of the Act, which includes and shall be deemed always to have included any receipt of money or acceptance of any valuable commodity by any Financial Establishment to be returned after a specified period or otherwise, either by cash or i....