TaxTMI 
TaxTMI 
2021 (12) TMI 244
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....thority) Rules, 2016), passed by the Adjudicating Authority (National Company Law Tribunal, Division Bench II, Chennai). APPELLANT'S SUBMISSIONS 2. According to the Learned Practising Company Secretary for the Appellant, the impugned order dated 12.08.2021 in IB/149/2020 was passed by the 'Adjudicating Authority' without providing an opportunity to the Appellant to file the 'Additional Written Submissions' and by countermanding its own order dated 29.07.2021 whereby the Authority had granted time to the Corporate Debtor at the request of the Counsel to file the 'Additional Written Submissions' before the Registry by both the parties after serving a copy on the other side on or before 13.08.2021 and reserved the 'Order'. 3. The Learned Practising Company Secretary for the Appellant submits that the Appellant is a 'Real Estate Company' engaged in property development and is in existence from the year 2004 and as so far developed close to 50,00,000 sq. ft of space in multiple locations across South India and Sri Lanka. 4. The Learned Practising Company Secretary for the Appellant points out that the 'Corporate Debtor' is now developing the undermentioned projects:- Name....
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.... financial institutions/ banks (other financial creditors) or operational creditors of other project cannot file a claim before the Interim Resolution Professional of other project and such claim cannot be entertained. So, we hold that Corporate Insolvency Resolution Process against a real estate company (Corporate Debtor) is limited to a project as per approved plan by the Competent Authority and not other projects which are separate at other places for which separate plans approved. For example - in this case the Winter Hill - 77 Gurgaon Project of the 'Corporate Debtor' has been place of Corporate Insolvency Resolution Process. If the same real estate company (Corporate Debtor herein) has any other project in another town such as Delhi or Kerala or Mumbai, they cannot be clubbed together nor the asset of the Corporate Debtor (Company) for such other projects can be maximised."' 6. Advancing his argument, the Learned Practising Company Secretary comes out with a stand that only 'GVSPL-Raksha' and GVSPL Green Park' were funded by the 2nd and 3rd Respondent and that there is no dispute that the 'Corporate Debtor' had defaulted in meeting its obligations to the 2nd and 3rd Respon....
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....the said request and allowed the 'Corporate Debtor' to furnish the 'Additional Written Submissions' on or before 13.08.2021 and reserved the 'Order'. 10. The grievance of the 'Appellant' is that on 12.08.2021 the 'Corporate Debtor' had uploaded the electronic copy of the written submission in the e-filing portal of the 'Adjudicating Authority' (Tribunal) after which the 'Corporate Debtor' was shocked to receive the copy of the order admitting the application from the 'Adjudicating Authority' through email thereby an opportunity to submit the 'Additional Written Submissions' for which time was given till 13.08.2021 was denied to the 'Corporate Debtor', thereby the principles of natural justice were violated, to the detriment of the various stakeholders of the 'Corporate Debtor' and the 'Appellant'. 11. The Learned PCS for the Appellant submits that the 'Corporate Debtor' had entered into a Trustee Agreement on 10.8.2016 with 'IDBI Trusteeship Services Ltd' whereby the 'Corporate Debtor' had appointed 'IDBI Trusteeship Service Ltd' as the 'Debenture Trustee'. A 'Mortgage cum Trust Deed' was executed on 01.08.2020 by the Obligors (consisting of the Corporate Debtor and Guarantor....
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.... claimed Amount admitted Voting share 1 Nippon Life India Asset Management Ltd 6,84,88,567.00 6,84,88,567.00 4.29% 2 Nippon Life India Alf Management Ltd 60,65,36,617.00 60,65,36,617.00 38.01% 3 Indian Bank 56,25,97,071.94 56,25,97,071.94 35.26% 4 Indian Overseas Bank 17,21,42,538.00 17,21,42,538.00. 1079% 5 Easy access financial services ltd 18,58,71,221.00 18,58,71,221.00 11.65% Total 1,59,56,36,014.94 1,59,56,36,014.94 100% 16. In so far as the claims submitted by the 'Operational Creditors' the same is as follows: S.No. Name of Financial Creditor Amount claimed Amount admitted 1 Johnson Life Pvt Ltd 769,785/- 769,785/- Total 769,785/- 769785/- 17. It is the stand of the 1st Respondent/Resolution Professional that the impugned order of the 'Adjudicating Authority' is for the Company as a 'whole' and not for 'individual projects'. 18. The 1st Respondent/Resolution Professional refers to the directions issued in the order dated 04.02.2020 of this Tribunal in the matter of Flat Buyers Association Winter Hills -77 Gurgoan V. Umang....
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....ority (National Company Law Tribunal). The resolution cost including fee of the Interim Resolution Professional will be borne by the Promoter. Only after getting the certificate of completion from the Interim Resolution Professional/ Resolution Professional and approval of the Adjudicating Authority (National Company Law Tribunal) unsold flats/ apartments etc. be handed over to the Promoter/ Uppal Housing Pvt. Ltd. 30. It is made clear that even during the Corporate Insolvency Resolution Process, the Interim Resolution Professional can also sell the unsold flats/apartments, by way of a Tripartite Agreement between the Purchaser, Interim Resolution Professional/ Resolution Professional and Promoter (Uppal Housing Pvt. Ltd.). The proceeds as may be generated from such sale should be utilized for completion of the project and payment to Financial Institutions/Banks and Operational Creditors. Once the project is completed, the Interim Resolution Professional will mover application before the Adjudicating Authority (National Company Law Tribunal) with the report of completion and ask for disposal of application under Section 7, 'Rachna Singh' and 'Ajay Singh' (Allotees - Financ....
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....he fact that the debt payable by the Appellant was never disputed. 24. It is the version of the 2nd and 3rd Respondent that they underwent a name change and this was brought to the notice of the 'Adjudicating Authority' and that the application IA No.72/2021 was allowed on 15.04.2021 by the 'Adjudicating Authority'. When the matter came up on 29.07.2021, the 2nd and 3rd Respondent during the hearing of the petition made a submission and further that the 'Corporate Debtor' also made the submissions. It was recorded clearly in the order passed by the 'Adjudicating Authority' on 29.7.2021 that 'however, at the request of the counsel for the Respondent seeking two weeks' to file additional written submissions. The written submissions shall be filed in the registry by both the parties after serving a copy on the other side on or before 13.08.2021. Heard the parties, Order Reserved." 25. The Learned Counsel for 2nd and 3rd Respondent adverts to the fact that the 1st written submissions filed by the 'Corporate Debtor' contained no substantial ground and only frivolous grounds were raised. Further, the Additional Written Submissions allegedly filed by the Appellant does not contain a....
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....ondents points out that the order dated 04.02.2020 of this Tribunal and Company Appeal (AT)(Ins) No.926/2019 in Flat Buyers Association Winter Hills-77 Gurgaon relied on by the Appellant is inapplicable to the present case because of the fact it was a 'Case Specific' and was an outcome of a settlement and is in the nature of 'obiter dicta'. 32. The Learned Counsel for 2nd and 3rd Respondents points out that paragraph 13 of the order dated 04.02.2020 in Flat Buyers Association Winter Hills-77 Gurgaon case clearly observes as under:- "13. One of the Promoter - 'Uppal Housing Pvt. Ltd.'/ Intervenor agreed to remain outside the Corporate Insolvency Resolution Process but intended to play role of a Lender (Financial Creditor) to ensure that the Corporate Insolvency Resolution Process reaches success and the allottees take possession of their flats/apartments during the Corporate Insolvency Resolution Process without any third party intervention. The Flat Buyers Association of Winter Hill - 77 Gurgaon also accepted the aforesaid proposal. It is informed that 'JM Financial Credit Solutions Ltd' one of the financial institution has also agreed to cooperate in terms of agreement....
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.... a) First and exclusive charge on the underlying freehold lands and developments rights on the "Project Properties" from the date of execution of Mortgage Cum Trust Deed dated 01/08/2016, and the Unsold Units thereon (without possession of land/superstructure, Undivided Share on the land with possession of original title agreements). b) First and exclusive charge on the Project Receivables from the "Project Properties" effective from the date of execution of Transaction Documents in favour of the Applicants. c) Corporate Guarantee issued by the Corporate Debtor and Article Atelier Design India Pvt Ltd d) Personal guarantee issued by the promoters of the Corporate Debtor. e) Demand Promissory Note issued for the face value of the NCDs alongwith the coupon. f) Purchase Option Agreement with respect to the mortgaged properties. g) Any other security interest created in favour of the Debentures Holders under the Transaction Documents. 37. Before the 'Adjudicating Authority', there is no proof that a reply was filed by the 'Corporate Debtor'. The 'Corporate Debtor' had filed its 1st 'Written submissions' on 08.12.2020 before the 'Adjudicating Authority'. 38. In the instant case....
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....ebt' including a disputed claim is not due. In short, it is open to the 'Corporate Debtor' or its Directors to mention that/point out that 'debt' is not payable by the 'Corporate Debtor' either in Law or on facts of a given case. A 'debt' may not be due if it is not payable either on facts of a given case or in Law. EVIDENCE OF EXISTENCE OF 'DEBT' 43. To sustain an application under Section 7 of the Code, an applicant ought to establish an existence of 'debt' which is due from the 'Corporate Debtor'. It cannot be ignored that the issue of whether there is 'debt' and 'default' can be gone into, if only, the 'Corporate Debtor' questions/disputes the 'debt' or come out with a clear cut stand that there is no 'default', despite there is a 'debt'. 44. In the instant case, the 2nd and 3rd Respondent/Debenture Holder are undoubtedly the 'financial creditor'. There is no fetter in Law for the 'Debenture Holder' to file an application seeking to initiate CIRP against the concerned, without adding the 'Debenture Trustee'. Even the 'Trust Deed' is not restricting the rights of 2nd and 3rd Respondents from acting, in the absence of 'Debenture Trustee'. To put it precisely, the 'Debent....