TaxTMI 
TaxTMI 
2021 (12) TMI 908
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....ned Adjudicating Authority has observed as follows:- "This is an application filed by Axis Bank Ltd. against the RP representing the corporate debtor seeking reliefs as follows:- "a. Allow the present application, declare Applicant Ban as a 'secured financial creditor' in the present transaction forming subject matter of the present proceeding and direct Resolution Professional to treat present Applicant Bank as 'secured financial creditor' with claim amount as mentioned in Claim Form having been field by way of "Form-C" with the Resolution Professional and accord Applicant Bank all rights and privileges of a secured financial creditor and also proportionate voting rights in the forthcoming meeting of Committee of Creditors. b. In case if any Resolution Plan commenced the amount so received from the CD should be equally appropriated as per the proportionate share of the secured creditors. c. In case company goes into Liquidation direct the official liquidator to distribute the sale proceeds amount as per section 53 (B) (II). d. Direct the Resolution Professional/Liquidator, in case any amount is refunded to the home buyers, the said amou....
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....Bankruptcy Code, 2016 (hereinafter referred to as the 'Code'). The Successful Resolution Applicant made claim waiver from existing Security Interest/lien to be created over the Flats in favour of the Appellant by considering the claims of Home Buyers and in this situation the Appellant would neither get any money nor security for it, as invested by granting loans to Home Buyers. Learned Counsel argued that the allottees are getting the refund of their money under the Resolution Plan in settlement of their claims, there is a possibility that the Home Buyers would not deposit these amounts with the Appellant Banks in settlement of their dues, despite the fact that lien over the said Flat has already been acknowledged by the 'Corporate Debtor' in its separate 'Permission to Mortgage' letter issued to the Appellant at the time of disbursement of the loans. The Appellant has given a list of 42 Home Buyers who have already transferred their respective rights under the Flats in favour of the Appellant as evident from the lien marked by the 'Corporate Debtor' in favour of the Appellant. The subrogation clause mentioned in the standard tri-partite Agreement, the Power of A....
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....re Ltd. & Anr.' (Supra) has observed that Home Buyers are to be considered as 'Financial Creditors' irrespective of the fact 'whether he has borrowed money from the Banks or agreed to pay instalments under the Agreement for sale or whether he does it from his own finances'. The recovery certificate from DRT has been obtained by misleading DRT by pleading that the Flats are mortgaged with the Appellant. None of the units are mortgaged with the Appellant Bank. The certificates were issued ex-parte. It is strenuously argued by the RP that the Appellant had never produced the entire set of documents either before the RP or before the Adjudicating Authority. Even in this Appeal, the documents pertaining to the 44 Flats have not been produced. Only an Excel Sheet has been filed praying for consideration of the claims which amounts to more than Rs. 15 Crores/-. The Appellant has not done any due diligence before advancing the loans. As an example, Learned Counsel contended that one Mr. Rawat was sanctioned a Loan on 30.03.2014 for Flat No. F-021, when the Project was not even approved as on that date. Out of the 44 Flats, 26 Flats have already been sold....
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....) 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" (Emphasis Supplied) 9. The Hon'ble Supreme Court in paras 18 and 19 in 'Pioneer Urban Land & Infrastructure Ltd. & Anr.' (Supra) has observed as follows:- "18. It can be seen that the Insolvency Law Committee found, as a matter of fact, that delay in completion of flats/apartments has become a common phenomenon, and that amounts raised from home buyers contributes significantly to the financing of the construction of such flats/apartments. This being the case, it w....
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.... (Supra) that it is the Home Buyer who should be considered as 'Financial Creditors' of the 'Corporate Debtor' whether he has self financed his flat or has exercised his choice of taking a loan from the Bank. 11. Additionally, we are of the considered view that as per Section 77 of the Companies Act, 2013 every security interest has to be registered with the Registrar within 30 days of its creation and admittedly no 'charge' has been created against any of the property of the 'Corporate Debtor' in favour of the Appellant. At this juncture, we reproduce Section 77 of the Companies Act, 2013 which is as follows:- "77. Duty to register charges, etc. - (1) It shall be the duty of every company creating a charge within or outside India, on its property or assets or any of its undertakings, whether tangible or otherwise, and situated in or outside India, to register the particulars of the charge signed by the company and the charge-holder together with the instruments, if any, creating such charge in such form, on payment of such fees and in such manner as may be prescribed, with the Registrar within thirty days of its creation: Provided that the Registrar may, on an....
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....ere is no submission made on behalf of the Bank as to whether any steps were taken under Section 78 of the Companies Act, 2013. The ratio of 'Indiabulls Housing Finance Ltd.' Vs. 'Mr. Samir Kumar Bhattacharya and Anr.' passed by this Tribunal in Company Appeal (AT) (Insolvency) No. 830 of 2019 regarding "Registration of charge" is squarely applicable to the facts of this case. 12. A perusal of the documents shows that none of the Home Buyers appeared in any of the proceedings before the DRT whereby the recovery certificates were obtained. 13. The correspondence dated 23.04.2014 addressed by M/s. Value Infracon India Private Limited to the Manger Axis Bank reads as follows:- We find force in the contention of the Learned Counsel for the Respondent that a mere 'Permission to Mortgage' is of no relevance in the absence of not having 'registered a charge' under Section 77 of the Companies Act, 2013. 14. The relevant clause of the tri-partite Agreement entered into between the Home Buyers, the developer and the Appellant/M/s. Axis Bank is reproduced as hereunder:- "It is agreed by and between the parties to this Agreement that in case if the BORROWER fails to honour....
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....e and the Appellant Bank only. It is contended by the Respondent that though the Allotment Letter shows that the payments were construction linked, the Bank released the entire amount prior to completion of construction. 17. Be that as it may, we are of the considered view that this subject matter cannot be viewed from such a narrow compass. It is definitely not the scope and objective of the Code to include Banks/Financial Institutions which have advanced loans to Home Buyers to be considered as 'Financial Creditors' and included in the CoC, specifically in the light of the fact the liability to repay the Home Loan is on the individual Home Buyers. This would defeat the very spirit and objective of the Code aiming at Resolution and maximisation of the assets of the 'Corporate Debtor'. Presence of a mere tri-partite Agreement does not change the character of the amount borrowed by the Home Buyer vis-a-vis the Bank and vis-a-vis the 'Corporate Debtor'. Viewed from any angle, the Appellant cannot be included as a 'Secured Financial Creditor' in this case and hence we find no reasons to interfere with the well-reasoned Order of the Adjudicating Authority. 18. From all the aforen....