TaxTMI 
TaxTMI 
TaxTMI 
2021 (8) TMI 545
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....h Pvt. Ltd.' (hereinafter referred to as the 'Corporate Debtor') was proceeded Ex-Parte. 2. In the Impugned Order, the Adjudicating Authority has observed as follows: "9. As none appeared on behalf of Corporate Debtor during the proceedings, the Corporate Debtor was proceeded ex-parte vide order dated 30.08.2019 of this Bench. 10. It is pertinent to mention here that clause (8) of Section 5 of the Code has been amended by the Insolvency and Bankruptcy (amendment) Ordinance, 2018 with effect from 6th June, 2018. In view of the revised definition at Clause 8(f), any amount raised from an allottee under a real estate project is deemed to be an amount having the commercial effect of a borrowing and thus, is covered by the definition of 'Financial Debt' under the Code. Definition of 'Financial Debt' has been amended to specifically include dues of home buyers i.e. Real Estate (Residential). The amendment also recognizes home buyers as "Financial Creditor". Accordingly, the home buyers can initiate Corporate Insolvency Resolution Process against defaulting builder or developer, as "Financial Creditor" in terms of Explanation to Section 5 (8) (f) of the Code with effect from 06.06.20....
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....m at the end of 24 months or at the issuance of final LTC by the Competent Authority. Clauses 2(f) and (g) provided for the buy-back option under the MoU that at the end of 24 Months or the issuance of the final LTC by the Competent Authority, whichever is earlier, the Applicant shall exercise the option of either selling the units or can choose to retain the same. In the event of the Applicant choosing to retain the apartment, there will be no obligation on the part of the Company to return the investment alongwith the assured return. A Settlement Agreement was entered into between both the parties on 24.11.2018 and the Respondent's son Mr. Gaurav Agarwal accepted post dated cheques amounting to Rs. 25 Lakhs. Vide Order dated 19.11.2019, this Tribunal had sought a response from the Allottee as to whether she would accept the amount invested by her as the 'Corporate Debtor' was ready to settle with a Demand Draft dated 27.09.2019. It is submitted by the Learned Counsel that even as on today they are ready to return the principal amount as per the terms of the Settlement Agreement. 4. Submissions of the Learned Counsel appearing for the first Respondent/'Financial Creditor': ....
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....hed by the 'Corporate Debtor' in the year 2015 did not take off and only a few buyers numbering 35 paid the booking amount. The 'Corporate Debtor' has offered three options to its buyers:- (i) to refund the amount paid by them (ii) to shift to some other ongoing project of the Antriksh group (iii) to remain invested in the project to reap the profit of the increased rate whenever the project takes off. It is also stated by the IRP that there is no progress at the proposed site as the land is yet to be allotted by the Government to the 'Corporate Debtor'. Assessment: 6. At the outset, we address ourselves to the issue of 'Service of Notice' on the 'Corporate Debtor'. It is seen from the record that prior to filing of the Section 7 Application, a Demand Notice dated 01.02.2019 was issued by the first Respondent by Speed Post and vide email. A perusal of the envelope filed before us (page 54 and 55 of the Reply) establishes that the envelope returned with the postal endorsement 'the Addressee refuses to accept'. The email ID is the same address reflected in the Master Data and therefore the bald denial by the Learned Counsel for the 'Corporate Debtor' that this email was nev....
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....t of Rs. 25,00,000/- is for the purpose of investment and not for genuine purchase of the flat. 2 (a) The Applicant has agreed to invest a sum of Rs. 25,00,000/- (Rupees Twenty-Five Lacs only) in the Project for a period of 24 months or at the issuance of Final LTC by the competent authority (whichever is earlier) ("Investment") and has paid the said amount vide Chq. No. - 000055, issued From HDFC Bank, Dated: 08-07-2015. 2 (c) The Company has agreed to give return of 25% per annum at the end of 24 months or at the Issuance of Final LTC by the competent authority (whichever is earlier) from the date of receipt of (10% Booking Amount and Second Demand of 10%) Investment from the Applicant. 2 (d) That the minimum period of investment shall be 24 (twenty-four) months from the date of execution of this Agreement or till the issuance of Final LTC by the competent authority whichever is earlier. This agreement is executed from the given period irrespective of the construction of the project starting early or later. The Investment period shall be extendable only as mentioned in these presents and upon mutual written consent." (Emphasis Supplied) 10. Clauses 2(f) & (g) specify the....
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....effect of a borrowing; and (ii) the expressions, "allottee" and "real estate project" shall have the meanings respectively assigned to them in clauses (d) and (zn) of section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016);] (g) any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price and for calculating the value of any derivative transaction, only the market value of such transaction shall be taken into account; (h) any counter-indemnity obligation in respect of a guarantee, indemnity, bond, documentary letter of credit or any other instrument issued by a bank or financial institution; (i) the amount of any liability in respect of any of the guarantee or indemnity for any of the items referred to in sub-clauses (a) to (h) of this clause;" 14. In this context, it would be relevant to discuss the meaning of the terms "disburse" and "time value of money" used in the principal of clause of Section 5(8) of the Code. The Hon'ble Supreme Court has interpreted the term 'Disbursal' in 'Pioneer Urban Land and Infrastructure Ltd.' (Supra):- "70. The definition of "financial debt" in Sec....
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....ibunal, which has reversed the order of the National Company Law Tribunal, admitting the petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, there shall be an ad-interim direction to the effect that the finding that the appellant is a speculative investor is confined to the facts of the present case and shall not be treated as a precedent in any other case for the present. Moreover, the correctness of the decision of the NLCAT is in challenge in the present appeal." (Emphasis Supplied) 17. Hence, in the instant case, we need to see if the allottee has entered into any 'lucrative Agreement' based on the facts of this case. The clauses of the Agreement clearly stipulate that there is a buy-back Agreement, there is an assured return of 25% per annum at the end of 24 months or at the issuance of the final LTC by the Competent Authority (whichever is earlier). Right from the date of receipt of the booking amount from the Applicant, the word "investment" is consistently used. It is also stated that in consideration for the investment, the Company has agreed to earmark a unit in the project, give an assured return of 25% per annum and at the end of 24 months which is ....
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....t, in fact, want to go ahead with its obligation to take possession of the flat/apartment under RERA, but wants to jump ship and really get back, by way of this coercive measure, monies already paid by it. Given the above, it is clear that it is very difficult to accede to the Petitioners' contention that a wholly one-sided and futile hearing will take place before the NCLT by trigger-happy allottees who would be able to ignite the process of removal of the management of the real estate project and/or lead the corporate debtor to its death." (Emphasis Supplied) 18. We are of the considered view that the facts and circumstances peculiar to the attendant case indicate that the Allottee sought benefit from a 'lucrative Agreement' as he is 'securing' his money by way of this Agreement which gives him a lien over the flat. In Clauses 2(f) & (g) of the Agreement, the Home Buyer herein is given a choice to retain the apartment or to sell the earmarked unit. In a regular Builder Buyer Agreement, the Home Buyer does not have this option of exercising his choice of taking or not taking the possession of the subject unit. In a normal Builder Buyer Agreement if the Buyer does not accept the....