TaxTMI 
TaxTMI 
2024 (4) TMI 238
X X X X Extracts X X X X
X X X X Extracts X X X X
....ty' / 'National Company Law Tribunal', Principal Bench, New Delhi, the 'Appellant / Applicant', along with Others, had preferred CP (IB) No. 596 (PB) / 2021 as 'Financial Creditors', under Section 7 of the I & B Code, 2016, read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority Rules, 2016), while passing the 'Impugned Order', dated 06.01.2023, the 'Adjudicating Authority' / 'National Company Law Tribunal', among other things, at Paragraph Nos. V to VIII, had observed the following, and finally dismissed the main 'Company Petition ' : V. " The Corporate Debtor vide letter dated 22.07.2011 addressed to the allottees, including the Applicants, claimed that the 'Sushant Megapolis' Project is progressing well and construction work in the project is in good shape. Further, the Corporate Debtor indicated that the possession of certain houses & plots is expected to be handed over in the year 2011 itself. The Corporate Debtor also assured the allottees that there is no dispute regarding land in the project and the project 'Sushant Megapolis' is not affected by any rulings passed by the Hon'ble High Court of Allahabad as well as the Hon'ble Supreme....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cation). b) Three kinds of agreements entered between the Corporate Debtor and the Applicants, which are as follows: i. Plot Allottee agreement ii. Built-up Unit Allottee agreement iii. Apartment Allottee agreement ANNEXURE A-3 (Ref: Page 1388, 1412, 1443 of the Application). c) Letter dated 22.07.2011 sent by the Corporate Debtor to the Applicants herein. ANNEXURE A-4 (Ref: Page 1503 of the Application). d) Chart and details of each applicant reflecting payments made by the Financial Creditors of the Corporate Debtor. ANNEXURE A-6 (Ref: Page 1511 of the Application). e) Sanctioned plan of Sushant Megapolis' as available on the website of UP RERA. ANNEXURE B (Ref: Page 71 of I.A. 1935/2022 IN CP (IB) 596 (PB)/2021). f) Environmental Clearance dated 09.10.2009 with respect to the project 'Sushant Megapolis' ANNEXURE A (Ref: Page 42 of I.A. 1935/2022 IN CP (IB) 596 (PB)/2021). g) Brochure of the project 'Sushant Megapolis'. Annexure C ( Ref: Page 81 of I.A. 1935 / 2022 in CP (IB) 596 (PB) / 2021 ) " and finally 'dismissed' the main 'Company Petition', as 'not maintainable'. Appell....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al', had failed to note that explanation (ii) merely states that for the purpose of Section 5 (8) (f) of the I & B Code, 2016, the expression 'Allottee' and 'real estate project', shall have the meanings respectively assigned to them in clause (d) and (zn) of Section 2 of the Real Estate (Regulation and Development) Act, 2016. 8. The Learned Counsel for the Appellant, points out that the 'Appellant' is an 'Allottee', who had purchased a 'Plot', in the Project 'Sushant Megapolis', being developed by the 'Corporate Debtor', and that the 'Project', comprises of 'Plots', 'Builtup Plots', 'Row Houses' / 'Flats' / 'Floors', 'High-rise Apartments', under various allocated Site, within the same 'Real Estate Project'. The time for 'Handing over the Possession of the 'Allotted Unit', is from 36 months to 42 months, from the date of sanction of the 'Layout Plan' of the 'Allotted Unit' (vide Clause 4.1 at Page 85 of the Appeal Paper Book (Vol. I). 9. The 'Unitholders', had entered into 'Allotment Agreements' (vide Page 53 of the Vol-I of the Appellant's Appeal Paper Book), with the 'Corporate Debtor', which states that the 'Corporate Debtor', is the one responsible to allot and construct....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... 13. On behalf of the Appellant it is brought to the notice of this 'Tribunal', that a 'Single and Composite Application', for an 'Environmental Clearance', was filed by the 'Corporate Debtor', for the entire 'Hightech Township' / 'Sushant Megapolis' (vide Page 186 of the Vol. II of the Appellant's Appeal Paper Book). Indeed, the Letter dated 07.10.2009, issued by the 'Environment Impact Assessment Authority', Uttar Pradesh, reveals that 'Environmental Clearance', was granted, to the entire 'Hitech Township / Sushant Megapolis', as a 'Single Project'. 14. It comes to be known that the 'Corporate Debtor', through a Letter dated 22.07.2011 (vide Page 168 of the Vol. II of the Appellant's Appeal Paper Book), itself considers the 'Sushant Megapolis', as the 'Project' and addressed a common Correspondence, to all the 'Allottees' of 'Megapolis Township Project', claiming that the Project 'Sushant Megapolis', is progressing well and construction work in the Project, is in good shape. Added further, the 'Brochure', made available to the 'Allottees' (vide Page 132 of the 'Rejoinder', and also available on the 'Project', itself shows 'Sushant Megapolis', as single Project). In fact, t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the Appellant, contends that the 'Adjudicating Authority' / 'Tribunal', has incorrectly interpreted the explanation of Section 3 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016), with the Section 2 (zn) of the said RERA Act, while deciding Section 7 of the 'Application', the Hon'ble Supreme Court in Manish Kumar's case, had although, referred to Section 2 (zn) and Section 3 of the RERA Act, 2016 (vide Paragraph 113 & 114 of Manish Kumar's case), however even then, the Hon'ble Court had opined that 'what would constitute a real estate project', will depend on a 'fact-based enquiry', on what was offered to the 'allottees', to be decided on case-to-case basis. Hence, it is contended on behalf of the Appellant that the 'Adjudicating Authority' / 'Tribunal', had passed the 'Impugned Order', without going into the facts and circumstances of the instant case, but only relied on 'RERA Registrations', secured by the 'Corporate Debtor', pursuant to the 'RERA Act, 2016'. 20. The Learned Counsel for the Appellant, comes out with a plea that the 'Corporate Debtor', apart from furnishing a 'self serving interpretation', to the provisions of the 'RERA Act, 2016', and the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....prises of 'three buildings', which are to be developed, along with common areas such connecting Roads, Parks, Swimming Pools, etc., then the developer, in compliance with Section 3 of the RERA will 'obtain three separate RERA registrations', for each of the 'Buildings. 25. The Learned Counsel for the Appellant, points out that the 'Unitholders', invest their 'hard earned money', into the Project', not only to the 'Unit', but, also, the 'surrounding facility', which are 'Habitable'. Hence, as per the 'Impugned Order' of the 'Adjudicating Authority' / 'Tribunal', the 'CIRP' of 'one of the Buildings', may be initiated, however, despite successful 'CIRP' of the said Building, the 'Unitholders', will not be able to peacefully reside in the 'said premise peacefully', since, the other part of the 'Project', still be under 'construction', which might include commonalities like Clubs, Schools, Parks, Roads, etc. Moreover, it will be cumbersome, for the 'Allottees', to meet the 'threshold', prescribed under second proviso of Section 7 of the 'Code', on a 'per building' basis, which was never the intent behind inserting the proviso. As such, the interpretation, laid down by the 'Adjudicati....
X X X X Extracts X X X X
X X X X Extracts X X X X
....preme Court in Manish Kumar's decision, through the 'Impugned Order', dated 06.01.2023, had dismissed the Section 7 Application, filed under the I & B Code, 2016, that the 'Applicant Allottees', are not from the same 'Real Estate Project', relying mainly on the numerous 'RERA Regulations', obtained by the 'Corporate Debtor' for different phases of the project 'Sushant Megapolis'. 30. The Learned Counsel for the Appellant by referring to the Paragraph 151 of Manish Kumar's decision of the Hon'ble Supreme Court (2021) 5 SCC 1 at Spl Pg: 95, points out that the expansive definition, of real estate project, in Section 2 (zn) was noted, and it was observed by the Hon'ble Supreme Court "it will depend on what is offered by the promoter under the project. It may be real estate project, which seeks to develop a building and sale of the building. It may be a project for the construction of apartments, with the agreements, to convey the undivided interest of land also. It may be a project which envisages converting an existing building or a part into an apartment. It may be a project for merely development of land into plots and sale of the plotted land as such. It may be also that the sa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he 'Adjudicating Authority' / 'Tribunal', is an 'incorrect' one, besides, defeating the 'Object of the Code' and 'Legislative Intent', behind recognising 'Allottees', as 'Financial Creditors', through explanation added to Section 5 (8) (f) of the 'Code'. 35. The Learned Counsel for the Appellant, refers to Paragraph 177 of the decision of the Hon'ble Supreme Court in Manish Kumar v. Union of India & Anr., reported in (2021) 5 SCC On-line SCC 1, wherein, it is observed as under: 177. "The rationale behind confining allottees to the same real estate project is to promote the object of the Code". The Hon'ble Supreme Court notes that "if on the other hand the requirement was to make a search for allottees of different projects, as would be the case, if the entirety of the allottees, under different projects, were to be reckoned, the task would have been more cumbersome". 36. The Learned Counsel for the Appellant points out that by drawing reference from the explanation of Section 3 of the RERA Act, 2016, the 'Impugned Order', passed by the 'Adjudicating Authority' / 'Tribunal', had incorrectly interpreted the term 'same real estate project', although, it is settled 'Law'....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ct, 2016, as well as the Consumer Protection Act". 41. The Learned Counsel for the Respondent, comes out with a 'plea' that the 'proceedings', under the I & B Code, 2016, are in 'Rem', as per decision of the Hon'ble Supreme Court of India in Manish Kumar's case and if no safeguard, as in the form of provisos to Section 7 of the 'Code', are provided thereto, then, the same would lead to an 'Abuse of Process', and 'defeating the purpose of the Code', in the hands of a 'Single Allottee', in a 'Real Estate Project', who has the sole intent of seeking 'Recovery' / 'Refund' of the 'Amount', deposited. Whereas, other 'thousands of allottees' of the same 'Project', very well are to be considered, to be the 'critical mass of Allottees', such Project, are still desirous of taking possession of their units and still have their faith, reposed in the existing management of the 'Corporate Debtor'. 42. The Learned Counsel for the Respondent, brings to the notice of this 'Tribunal', that the Hon'ble Supreme Court of India, has devised the aforesaid three distinctive features, including that of 'Heterogeneity', relating to this 'class of Financial Creditors, i.e. 'Allottees', and further, opi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....'plotted land', as such. 45. The Learned Counsel for the Respondent, points out that the 'Appreciation of Allotment', by the Hon'ble Supreme Court of India, to further, illuminate the questions, as to the 'Allottees' and a 'Real Estate Project', such that, it is opined that "what is required is Allotment and not promised Flats as per 'Brochure'. It is also not the 'total constructed units'. This is as what is relevant under the impugned provisos, read with Section-5(8)(f) explanation of the I & B Code, 2016, and Section-2(d) of RERA read with Section-11(1)(b) of the 'Act' and the rules made thereunder is the 'Booking of Apartments or Plots.' 46. Continuing further, the Hon'ble Supreme Court of India, had observed that in the teeth of an argument that '10%' is dynamic and what is '1/10' in the 'morning', may fall short by night, if more Allotment is made, the Hon'ble Apex Court, held that the mere difficulties in given cases, to comply with a 'Law', can hardly furnish a ground to strike it down. As to what would constitute the 'Real Estate Project', it must depend on the 'Terms & Conditions', and scope of a particular 'Real Estate Project', in which the 'Allottees', are, a 'pa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....wnship, as available on the 'RERA website'. 51. The Learned Counsel for the 'Respondent', takes a stand that from the 'Impugned Order', passed by the 'Adjudicating Authority / Tribunal', it is evident from the 'findings' in para 9(iv) thereof that the entire record of the 'Corporate Debtor', including the 'Pre-RERA Allotment Agreements', layout plans, environmental clearances, obtained for the 'Township Sushant Megapolis', as well as the 'RERA Registration of 25 separate Projects', in the said 'Township Sushant Megapolis', were taken into account, based on the same, the 'Adjudicating Authority / Tribunal', had opined, that the 'Corporate Debtor', has submitted RERA registration details, which contain 25 projects, having separate 'RERA Registrations'. Also he had shown the break-up of the number of Applicants in the present Petition, in respect of the 9 categories of the projects (as seem from perusal of the 'Allotment Agreements', and other records of the 'Township', to discern the scope of the 'Real Estate Project', within the said 'Township', as offered by the 'Promoter.' 52. The forceful plea of the 'Respondent' is that, in none of the 'Project / Project categories', the '....
X X X X Extracts X X X X
X X X X Extracts X X X X
....stwhile regime which permitted even a single allottee to move an application under Section 7 filed petitions singly or with less than the number required under the proviso and they are visited with the provisions of the third proviso as per which such of those applications under section 7 which had not been admitted would stand withdrawn within 30 days, if the newly declared threshold of 100 allottees or 10 per cent of the allottee whichever is lower was not garnered by the applicant/applicants." 47. It was submitted that the right to file an application under Section 7 is a statutory right and it can be conditioned. Reliance is placed on judgment of this Court in Gujarat Agro Industries Co. Ltd. v. Municipal Corporation of the City of Ahmedabad and others 26. There is no inherent or absolute right to file an application under Section 7 of the Code. The Legislature is well within its power to impose conditions for the exercise of such statutory rights. It is further contended that the third proviso 23 (1985) 4 SCC 369 24 (1985) 1 SCC 523 25 (2009) 13 SCC 165 26 (1999) 4 SCC 468 inserted in Section 7(1) does not affect any vested right of the creditors who have already file....
X X X X Extracts X X X X
X X X X Extracts X X X X
....(i) any amount raised from an allottee under a real estate project shall be deemed to be an amount having the commercial 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;" 148. Real estate project may relate to plots, apartments, or buildings or plots/apartments and plots/buildings. As far as the expression 'allottee' is concerned, since the Code in the Explanation to Section 5(8)(f), incorporates the definition of the word 'allottee' in RERA, for the purpose of the provisos in question, we must necessarily seek light only from the expression 'allottee' defined in Section 2(d) of RERA." 58. The Learned Counsel for the Respondent, adverts to decision of the Hon'ble Supreme Court in Manish Kumar's case, reported in (2021) 5 SCC Page 1 at Spl Pg: 93, wherein, at Paragraph Nos. 146, it is observed as under: 146. "'Building' has been defined as including any structure or erection or part of any structure and intended to be used for residential or commercial purposes, inter a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... purposes of this clause, where the person who constructs or converts a building into apartments or develops a plot for sale and the person who sells apartments or plots are different person, both of them shall be deemed to be the promoters and shall be jointly liable as such for the functions and responsibilities specified under this Act or the rules and regulations made thereunder;" 152. Therefore, a conspectus of the provisions would show that having regard to the legislative intention the term 'allottees' as defined in Section 2(d) must be understood undoubtedly on its own terms predominantly. But at the same time the other provisions which form part of the Act and therefore the scheme must also be borne in mind. The Argument that the definition of 'allottee' suffers from over inclusiveness and under inclusiveness needs to be considered. Under inclusiveness and over inclusiveness are aspects of the guarantee under Article 14. Equals must be treated equally. Unequals must not be treated equally. What constitutes reasonable classification must depend upon the facts of each case, the context provided by the statute, the existence of intelligible differentia which has led ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... debt need not be owed to the applicant and as joint application by more than one applicant was and is contemplated, the resultant position would be that any number of applicants, without any amount being due to them, could move an application under Section 7, provided that they are financial creditors and there is a default in a sum of Rs.1 crore even if the said amount is owed to none of the applicants but to any another financial creditor. This position has not undergone any change even with the insertion of the provisos. In other words, even though the provisos require that in the case of a real estate project, being conducted by a corporate debtor, an application can be filed by either one hundred allottees or allottees constituting one-tenth of the allottees, whichever is less, if they are able to establish a default in regard to a financial creditor and it is not necessary that there must be default qua any of the applicants. 24. Therefore, it is pertinent to state that Section 7(1) of the Code, 2016 mandates the Financial Creditors, who are allottees under a Real Estate Project, to file an Application for initiating CIRP against the Corporate Debtor jointly by not less t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....li Ghaziabad Subject: important Communication Dear Customer, At the outset we wish to thank you all for your support and patronage with which the Festival City' (Project) is coming up inspite of various challenges/delays caused in obtaining various permissions and approvals (since obtained by the Company). We were monitoring the progress of the Project closely with an intention to expedite the same to ensure delivering of your Unit(s) as early as possible inspite of the many speed breakers/disturbances. We found that there was need for strengthening the process. If necessary reorganizing the Project implementation plan. We are happy to inform you that erstwhile Management for various reasons ultimately we decided to bring us as new and efficient implementing partner so that our esteemed buyers may be delivered their Units as early as possible. Accordingly, the arrangements of Anand Infoedge Private Ltd. ('AIPL') with earlier collaborator (Mist Avenue Private Ltd) were cancelled in entirety and a new arrangement was entered with us on 27th July 2017. We have now taken charge of the project for early implementation. Our esteemed a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... by filing an Original Application No. 1356/2019 (recovery suit) and claiming the security interest over the flats of the Applicant. Therefore, SBI is in the shoe of creditor standing against the Corporate Debtor for same set of debt before the DRT against which the Applicant is also claiming amount due under Section 7 of this Application. 4.3. It is submitted that no cause of action survives in favour of the Applicant and the Corporate Debtor is entitled to recover the amount of Rs. 1,30,15,711/- (Rupees One Crore Thirty Lakhs Fifteen Thousand Seven Hundred and Eleven Only) towards the Flat Nos. 302 & 303 for the balance sale consideration. 5. The Applicant also preferred Written Submissions vide Diary No. 2885/2023 dated 05.12.2023 wherein it has been contended that the Financial Creditor entered into three MOUs with the Corporate Debtor dated 04.11.2016 for Flat No. 302, 303 and 304 in the project named SUNRISERS for aggregate sale amount of Rs. 1,85,33,317/- (One Crore Eighty-Five Lakhs Thirty-Three Thousand Three Hundred and Seventeen Only), Rs. 1,83,42,394/- (Rupees One Crore Eighty-Three Lakhs Forty- Two Thousand Three Hundred and Ninety-Four Only) and Rs. 1,87,54,895/- (Rup....
X X X X Extracts X X X X
X X X X Extracts X X X X
....imited, is described as the 'Corporate Debtor' and in Part IV of the main 'Company Petition', the Total Amount of Debt, was mentioned as Rs.41,81,90,116/- (Rupees Forty One Crores, Eighty One Lakhs Ninety Thousand One Hundred and Sixteen only) along with interest @ 18% per annum as on 15th March 2021'. Further, it was averred that the 'interest amount', is now statutorily payable, under the Estate (Regulation and Development) Act, 2016 from the 'date of Deposit'. 66. Besides the above, it was averred in main CP (IB) No. 596(PB)/2021 by the 'Appellant / Petitioner', and other 'Petitioners' that 'they are the 'Financial Creditors / Homebuyers / Allottees', who have purchased residential units / plots / apartments / parcel of land, in the project "SUSHANT MEGAPOLIS' (hereinafter referred as "the Project"), being developed by the 'Corporate Debtor', namely 'M/s ANSAL HITECH TOWNSHIPS LTD.' 67. As a matter of fact, the 'Appellant', and other 'Petitioners / Financial Creditors', before the 'Adjudicating Authority / Tribunal', under Part IV of the main CP (IB) No. 596 (PB) / 2021, had mentioned that the 'Government of State of Uttar Pradesh', selected 'M/s. Uttam Steel & Associates ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he 'same Real Estate project'. 69. Further, the 'Financial Creditors / Petitioners', being impressed by the highly alluring and attractive promises, made by the 'Corporate Debtor', had opted for respective residential units / plots / apartments in the project (hereinafter referred as 'Residential Unit') and that the 'Corporate Debtor', had executed 'Allotment / Allottee(s) Arrangement Agreements', with the 'Financial Creditors', containing totally arbitrary and one-sided terms. Also that as per terms of the Agreement, the time for handing over possession of the allotted unit 'from 42 months to 3 years', from the 'Date of Sanction of the Layout plan of the Allotted Unit' and other contingent dependent aspects, varying from the type of Allotted Residential Unit'. That apart, according to the 'Appellant', 'No definite time frame', for 'delivering possession of the Residential Units to the Allottees', was 'not incorporated in the Agreements.' 70. As per the 'Appellant's Claim', the 'Total Sum', to be claimed, in 'Default' in the main 'Company Petition', was Rs.41,81,90,116/-, as on 15.03.2021. Features of Reply of the Respondent / Corporate Debtor : 71. The Respondent / Cor....
X X X X Extracts X X X X
X X X X Extracts X X X X
....her brought the construction to a complete halt. 75. According to the Respondent /Corporate Debtor, the significant construction was carried out, across all the Projects of the Township and many Housing as well as Commercial Projects were already at an 'advance stage of construction'. The possession was handed over to 'Multiple Allottees' of the various Group Housing Project and well as Commercial Projects, and if the Respondent / Company is forced into 'Insolvency Proceedings', the whole Project and its future will be jeopardised. 76. It is represented on behalf of the Respondent / Corporate Debtor that the main CP (IB) No. 596 (PB) / 2021, was filed with a 'mischievous endeavour', on the part of 'some of the Applicants', to extract money, from the Respondent / Company, when they are not even 'Genuine Bona fide Home Buyers'. 77. Furthermore, the main CP (IB) No. 596 (PB) / 2021, filed by the 'Petitioners', is to be dismissed 'ipso facto', in the teeth of Section 3 of the I & B Code (Amendment Act 2020) whereby, Section 7 of the I & B Code, 2016, was amended and by virtue of the Amended Section 7 of the 'Code', the 'Adjudicating Authority' / Tribunal', 'ought to dismiss an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent / Corporate Debtor, approximately 50 Petitioners to the main CP (IB) No. 596 (PB) / 2021, are 'Co-Applicants' or 'Third Applicants' for a 'Single Unit'. Such 'joint Applicants / Petitioners', were represented as 'Different Allottees', to simply fulfill the requisite 'number of 100 Allottees'. 82. The Learned Counsel for the Respondent / Corporate Debtor, refers to the Order of the Hon'ble Supreme Court of India, dated 19.01.2021, in the matter of Manish Kumar v. Union of India (vide WP (C) No. 26 / 2020), wherein, it is held that 'one unit equals to one Allottees', even though, the said 'Unit', is jointly held. In fact, the relevant extract of the aforesaid decision of Hon'ble Supreme Court, at Paragraph 147, is as under: 147. "As far as the situation projected about, there being no clarity regarding whether, if there is a joint allotment of an apartment to more than one person, is it to be taken as only one allottee or as many allottees as there are joint allottees, it would appear to us, on a proper understanding of the definition of the word 'allottee' in Section 2(d) and the object, for which the requirement of hundred allottees or one-tenth has been put, and al....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Debtor, it filed a 'Writ Petition' (MISC Bench No. 4924 of 2024 - Court No.3, vide Annexure A4, Page 46 of the Respondent / Corporate Debtor's Appeal Paper Book), before the Hon'ble Allahabad High Court', Lucknow Bench, seeking directions to the Administration, to take action, in compliance against the 'Farmers', who were disrupting the 'construction activity'. Indeed, the Hon'ble High Court, Lucknow Bench, was pleased to pass an 'Order', dated 18.06.2014, in directing the 'Local Administration', to ensure a peaceful atmosphere for the 'Construction work' of the 'Township', can be carried out, but the 'Administration', had failed to take any such steps, which resulted in disruption, of the 'Construction Activity'. 85. It is the version of the Respondent / Corporate Debtor, that the 'Landowners' of the notified 'Township Area', had defaulted in their deal of Selling the Land to the Respondent, causing further delay in the construction of the said 'Project'. Later, the Project further delay, due to a 'Stay Order', passed by the 'National Green Tribunal', in Akash Vashishta & Anr. v. Union of India (vide OA No.121 / 2013), wherein a 'Stay Order', was passed on the construction of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ternate properties, at alternate Projects'. 90. It is represented by the Respondent / Corporate Debtor, that a 'Single Layout Plan' for the 'Hybrid Project - Sushant Megapolis / Megapolis ', was submitted by the Respondent, 'for sanction by the 'Competent Authority', as all the 'Sub-Projects', were situated within the same 'Township' and 'securing sanction for every Sub-Project', would consume time, 'resulting in Delay', in regard to the 'Construction of the Township'. 91. In this connection, on the side of the Respondent / Corporate Debtor, a reference is made to Section 3 (1) of The Real Estate (Regulation and Development) Act, 2016 (16 of 2016), under the 'Heading' 'Prior registration of real estate project with Real Estate Regulatory Authority', which reads as under : (1) No promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner any plot, apartment or building, as the case may be, in any real estate project or part of it, in any planning area, without registering the real estate project with the Real Estate Regulatory Authority', established under this Act. Provided that projects that are ongoing on th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ct', which proceeds to the following effect: "At this juncture, this 'Tribunal' points out that the Section 2 (d) of the 'Real Estate (Regulation & Development) Act, 2016, defines 'Allottee', in relation to a 'Real Estate Project', means the person to whom a plot, apartment or buildings, as the case may be, has been allotted, sold (whether as freehold or leasehold) or otherwise transferred by the promoter, and includes the person who subsequently acquires the said allotment through sale, transfer or otherwise but does not include a person to whom such plot, apartment or building, as the case may be, is given on rent." (zn) "real estate project' means the development of a building or a building consisting of apartments, or converting an existing building or a part thereof into apartments, or the development of land into plots or apartment, as the case may be, for the purpose of selling all or some of the said apartments or plots or building, as the case may be, and includes the common areas, the development works, all improvements and structures thereon, and all easement, rights and appurtenance belonging thereto;" 95. The Learned Counsel for the Respondent / Co....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... & B Code, 2016. In fact, the Learned Counsel for the Appellant refers to the Judgment, dated 11.05.2023 of the Hon'ble Supreme Court in the matter of M. Suresh Kumar Reddy v. Canara Bank & Ors., (vide Civil Appeal No. 7121 / 2022), wherein, at Paragraph 10, it is observed and held as under: 10. "Thus once NCLT is satisfied that the default has occurred, there is hardly a discretion left with NCLT to refuse admission of the application under Section 7. Default is defined under sub-section 12 of Section 3 of the IB Code which reads thus: "3. Definitions: - In this Code, unless the context otherwise requires,- .. .. .. .. .. .. .. .. (12 "default" means non-payment of debt when whole or any part or instalment of the amount of debt has become due and payable and is not [paid] by the debtor or the corporate debtor, as the case may be;" Thus, even the non-payment of a part of debt when it becomes due and payable will amount to default on the part of a Corporate Debtor. In such a case, an order of admission under Section 7 of the IB Code must follow. If the NCLT finds that there is a debt, but it has not become due and payable, the application....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uildcon Pvt. Ltd., & Anr., wherein, it is held that 'the contention of the Corporate Debtor that the 'Real Estate Project', could not be completed on account of 'Force Majeure', is untenable in 'Law'. 104. The Appellant cites the 'Order' of the 'Adjudicating Authority' / 'Tribunal', in Atul Rajwadkar, Liquidator for Gupta Infrastructure (India) Pvt. Ltd. (vide IA No. 20 / 2021 in CP (IB) No. 1397 / MB / 2017), wherein, it is held that 'Application' of the 'Force Majeure Clause', would require an incisive Judicial enquiry, it would not be possible for 'Adjudicating Authority', to go there into by in a summary proceeding. As such, the plea of 'Force Majeure', taken on behalf of the Respondent / Corporate Debtor that in not providing the possession of Units, is an 'incorrect' one. 105. The Appellant, adverts to the 'Judgment' dated 29.05.2020 of the Hon'ble High Court of Delhi in Halliburton Offshore Services Inc. v. Vedanta Limited & Anr. [vide OMP (I) (Comm.) No. 88 / 2020], wherein, it is observed that 'every breach or non-performance', cannot be justified or excused merely on the invocation of Covid-19 as a 'Force Majeure' condition. Further, it is observed that 'the particu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Paragraph No. 78 of this Judgment, mentioned Supra). 110. Apart from that, according to the Respondent / Corporate Debtor, the 'Home Buyers List', being the 'Joint Holders', but, represented as different 'Allottees', in the present case (vide Annexure R1 - Page 46 of the Appellant's Appeal Paper Book), is as follows: S. No. CUSTOMER NAME APPLICANT DETAIL 8 PRIYA SHRIVASTAVA CO APPLICANT 10 SMITA SHRIVASTAVA CO APPLICANT 12 ARCHANA TIWARI CO APPLICANT 16 ANIL KUMAR CO APPLICANT 18 NEHA KHANNA CO APPLICANT 20 SONKAR ANUPAM AMRITLAL CO APPLICANT 25 RUCHI SHUKLA (RUSHI SHUKLA IN NCLT) CO APPLICANT 30 RAMA MEHRA CO APPLICANT 31 AVINASH MEHRA THIRD APPLICANT 34 PUNEET JAIN CO APPLICANT 36 GAURAV GOEL CO APPLICANT 39 NUPUR RUDRABHATLS CO APPLICANT 41 PREETI ARORA CO APPLICANT 42 SANTOSH KUMARI ARORA THIRD APPLICANT 44 SHIVANGI SINGH CO APPLICANT 45 DR. HIMANGI SINGH THIRD APPLICANT 47 SHRUTI GAUR CO APPLICANT 50 PRAVINA VERMA CO APPLICANT 53 POONAM SRIVASTAVA CO APPLICANT 55 EMA DWIVEDI CO APPLICANT ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eration for the time value of Money and includes; "Any amount raised under any other transaction, including any forward sale or purchase agreement, having the commercial effect of a borrowing. '[Explanation. - For the purposes of this sub-clause,- (i) Any amount raised from an allottee under a real estate project shall be deemed to be an amount having the commercial effect of a borrowing." 114. Section 7 of the I & B Code, 2016, provides for an initiation of 'Corporate Insolvency Resolution Process', by 'Financial Creditor'. The two essential features of an 'Admission' of an 'Application', under Section 7 of the 'Code' are (a) Existence of Debt and (b) Default. 115. In fact, an 'Adjudicating Authority' / Tribunal's jurisdiction is restricted to determine, whether the 'Application' is complete and whether, there is any 'Debt' and 'Default', as per decision in Dr. H.N. Nagaraj vs. Edelweiss Asset Reconstruction Company Ltd., reported in (2018) 148 SCL 447 (NCLAT). 116. It is to be remembered that an 'Adjudicating Authority' / 'Tribunal', is not deciding a 'Money Claim'. Further, an "Adjudicating Authority' / 'Tribunal', is not a 'Civil Court', to d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n. Also that, in the instant case, it is a 'Township' of more than 1500 Acres with 'different type of developments' (Viz. 'Plot, Apartments, Builtup Industrial and Commercial', etc.) with independent, 'RERA' Registrations, and no phasewise Registrations. 124. Moreover, the present Township, comprises of 'real estate projects' of different character, Viz. 'Plots', 'Apartments' (named 'Fairway Apartments') in this case, 'LIG EWS Builtup', etc., the said 'Real Estate Projects', were given different Building Sanctioned Plans, having independent terms. In fact, for the said Sanctioned Plans, being the subject matter of 'RERA' Registrations, secured for the said ongoing Projects, under the 'Township', different 'Approval Letters', for separate 'Real Estate Projects', under this Township were issued. 125. The 'Adjudicating Authority' / 'Tribunal' in the 'Impugned Order', dated 06.01.2023 in CP (IB) No. 596 (PB) / 2021 at Paragraph No. 9 (v), had mentioned that the Respondent / Corporate Debtor, had submitted RERA Registration details, comprising Twenty Five Projects, with 'separate RERA Registrations', and in the Company Petition, in regard to the 'Nine Categories' of the Project, t....