TaxTMI 
TaxTMI 
2025 (11) TMI 685
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...., New Delhi Bench, Court - III) rejecting the I.A. No. 4347/2023 filed by the UCO Bank and order dated 09.07.2024 passed in I.A. No. 1449/2022 approving the resolution plan in the Corporate Insolvency Resolution Process (CIRP) of the corporate debtor - M/s. Bulland Builtech Pvt. Ltd. 2. Brief facts necessary to be noticed giving rise to these appeals are to the following effect: i. The corporate debtor M/s. Bulland Buildtech Pvt. Ltd. is a Real Estate Company which has engaged in a residential project namely "Bulland Elevates" situated in Greater Noida, Gautam Buddh Nagar, Uttar Pradesh. ii. In the above Real Estate Project, company allotted various flats to several persons. Several unitholders entered into Tripartite Agreement with UCO Bank and the company under which financial facility was obtained by the borrower for purchase of the units. iii. As per UCO Bank, 45 unitholders were sanctioned home loans on different dates in the year 2013 onwards. On the instruction of homebuyers, the amounts were paid to the corporate debtor. iv. Canara Bank filed an application under Section 7 of the IBC against the corporate debtor M/s. Bulland Buildtech ....
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....(Ins.) No. 1911/2024. Aggrieved by the order approving the resolution plan Comp. App. (AT) (Ins.) No. 1911/2024 has been filed. 3. We have heard Mr. Brijesh Kumar Tamber and Mr. Prateek Kushwaha learned counsels appearing for the appellant. Learned counsel Mr. Sumant Batra has appeared for the RP. We have also heard learned counsel appearing for the Successful Resolution Applicant (SRA). 4. Learned counsel for the appellant challenging the order passed by the adjudicating authority dated 08.01.2024 rejecting the application filed by the UCO Bank for accepting its claim submits that adjudicating authority committed error in rejecting the claim of the appellant. It is submitted under Tripartite Agreement with the unitholder, UCO Bank and the corporate debtor home loan was sanctioned to the borrower which was paid to the corporate debtor under the instruction of borrower. Under the Tripartite Agreement it was the responsibility of both the borrower and the corporate debtor to comply with the terms and conditions of the Tripartite Agreement. The Bank also got its charge registered with Central Registry of Securitisation Asset Reconstruction and Security Interest of India with res....
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....Learned counsel Mr. Sumant Batra appearing for the RP refuting the submission of the appellant submits that appellant is not the financial creditor of the corporate debtor. Appellant has sanctioned home loan to the allottees and the amount was disbursed to the allottees only and it is the allottees who were the financial creditor, the disbursal cannot be said to be in favour of the corporate debtor. On the basis of Tripartite Agreement, appellant cannot claim to be financial creditor of the corporate debtor. Corporate debtor has neither applied nor availed any financial assistance from the UCO Bank. It is the allottees who were sanctioned the credit within the meaning of Section 5(8)(f) of the Code since the amounts have been raised by the corporate debtor from the individual allottees and not from the UCO Bank. The amount was sanctioned by the Bank to the allottees and on the instructions to the allottees was paid to the corporate debtor. It is submitted that out of the units claimed by the appellant, 20 units have been allotted to other allottees who had made payment to the corporate debtor and filed their claims whose claim have been admitted. Claim of certain individuals to who....
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....refund and bank cannot claim itself a financial creditor of the corporate debtor. Learned counsel for the SRA submits that insofar as proceeds of Section 66 application for avoidance of transaction, if any amount is received the SRA has no objection to the said amount being paid to the UCO Bank towards its outstanding dues. 8. We have considered the submissions of the counsel for the parties and perused the records. 9. Both the parties have relied on various judgments of this Tribunal and the Hon'ble Supreme Court which we shall refer to while considering the submissions. 10. The issue which has arisen for consideration in the appeal is as to whether the claim submitted by the appellant in 'Form-C' for an amount of Rs. 18,82,07,927/- was a financial debt owed by the corporate debtor and as to whether the RP was obliged to accept the claim as financial creditor. As noted above, the claim was filed by the appellant within time by its letter dated 05.04.2021 which claim was not accepted by the RP leading to the filing of the application I.A.4347/2023 by the appellant before the adjudicating authority which came to be rejected on 08.01.2024. We need to first notice the 'Form-C....
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....e corporate debtor and the creditor which may be set-off against the claim NIL 8. Details of any security held, the value of the security, and the date it was given FLATS ALLOTED TO THE DIFFERENT BUYERS/BORROWERS AS PER TRIPARTITE AGREEMENT 9. Details of the bank account to which the amount of the claim or any part thereof can be transferred pursuant to a resolution plan IFSC code: UCBA0002128 A/C No.01200210002186 UCO BANK, AMB, NEW DELHI 10. List of documents attached to this claim in order to prove the existence and non- payment of claim due to the financial creditor 1) SANCTION LETTERS TRIPARTITE Relevant Particulars AGREEMENT 3. STATEMENT OF ACCOUNTS (Signature of financial creditor or person authorised to act on his behalf) (Please enclose the authority if it is being submitted on behalf of the financial creditor) Name in BLOCK LETTERS: MAHESH KUMAR Position with or in relation to creditor: ASSISTANT GENERAL MANAGER Address of person signing: UCO BANK, ASSET MANAGEMENT BRANCH, 5, PARLIAMENT STREET, NEW DELHI-110001 11. The above details indicate that basis of the claim is sanction letters and Tripartite....
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....owed and is required to be owed. The definition of claim, we have noted above which is the right of payment whether or not such right is reduced to judgment, fixed disputed, undisputed, legal, equitable, secured or unsecured. The basis of claim is Tripartite Agreement and the clauses therein. We need to look into the one of the Tripartite Agreements which is part of the appeal filed as Annexure A-5 to the appeal dated 10.09.2013 entered between Mrs. Praveen Gupta borrower mortgager/first party as one part, UCO Bank as second part and M/s. Bulland Buildtech Pvt. Ltd. as third part. The statement in Tripartite Agreement clearly mentions that Bank has sanctioned the credit facility to the borrower for buying the property as stated in Schedule II, which statement is as follows: "...Whereas the borrower herein, on their requests and subject to compliances of requirements of SECOND PARTY herein, have been sanctioned the credit facility, as stated in Schedule I, herein below, (for short, "the said credit limit") for the purpose of buying the property as stated in Schedule II appended below, (for short, "the said space") agreeing to be purchased by the first party herein from owne....
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....tions and do all deeds, at whatsoever, for the compliance oftens of the present agreement and give discharge for and on their behalf and in their name. All or any of act of their said attorney shall be deemed as if done by us and shall be binding on us." 18. Learned counsel for the appellant has also relied on Clause 41 of the Agreement which is as follows: "41. That the owner and the builder herein jointly and/or severally agree/s and accept/s the present terms and conditions of this agreement and binds itself from the said terms and conditions and the same are not repeated herein separately only for avoidance of the repetition and desirous of being brief and short. The owner and builder are further agreed that all the terms and conditions hereof shall be applicable upon them, so far as the same pertains to the rights to the bank over the said space, in the capacity of owner and builder, as may be applicable which are applicable against the first party herein." To contend that builder has also jointly and severally agreed and accepted the terms and conditions of the Agreement and bind itself from the said terms. When we look into the Tripartite Agreement relied by t....
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....lder to indemnify the Bank. The copy of Tripartite Agreement has been brought on record by the appellant as Annexure A-5. We have noted relevant clauses of the Tripartite Agreement in preceding paragraphs of this judgment. Clause-12 provides that in case of failure of the borrower to liquidate the entire outstanding amount to the Bank, the Bank shall be entitled to get sold and auctioned the said space in the manner as deem fit and Borrower shall not make any objection, & challenge to such action of the Bank. Thus, the condition to liquidate the outstanding amount and consequences are provided in Clause-12. The clauses as provided in Tripartite Agreement do not contemplate liability to be taken over by the Builder or Builder to make any repayment to the Bank. Learned Counsel for the Appellant placed reliance on Clause-41 of the Tripartite Agreement. Clause 41 of the Tripartite Agreement as extracted above, cannot be read as any indemnity given by the Builder in favour of the Bank. Section 124 of the Contract Act defines 'contract of indemnity'. Section 124 of the Contract Act is as follows: "124. "Contract of indemnity" defined.-A contract by which one party promises to sa....
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....this Part, unless the context otherwise requires,-.. (8) 'financial debt' means a debt along with interest, if any, which is disbursed against the consideration for the time value of money and includes- (a) money borrowed against the payment of interest ; (b) any amount raised by acceptance under any acceptance credit facility or its dematerialised equivalent ; (c) any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument ; (d) the amount of any liability in respect of any lease or hire purchase contract which is deemed as a finance or capital lease under the Indian Accounting Standards or such other accounting standards as may be prescribed ; (e) receivables sold or discounted other than any receivables sold on non-recourse basis ; (f) 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 ....
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....creditors and they should be representatives of the home buyers. There should be no direct right given to home buyers to be on the CoC.' Even the dissent of Shri Shroff recognises that in the case of home buyers, who have taken loans from banks, such banks ought to be on the committee of creditors. If such banks ought to be on the committee of creditors as representatives of the home buyers, and they are to vote only in accordance with the home buyer's instructions, why should the home buyer himself then not be on the committee of creditors, and why should it make any difference as to whether he has borrowed money from banks in order to pay instalments under the agreement for sale or whether he does it from his own finances ? These matters have not been addressed by the dissenting view which in principle, as we have seen, supports home buyers who have taken loans as against home buyers who have used their own finances. Perhaps the real reason for Shri Shroff's dissent is the fact that unsecured, as opposed to secured, financial creditors are being put on the committee of creditors. If there is otherwise good reason as to why this particular group of unsecured c....
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....lt by the allottee. The bank had sought security by creating mortgage of the residential units for the loans availed by the home buyers and the "corporate debtor" had given permission for the same to enable the home buyer to procure financial assistance. 16. From the aforenoted clause in the tripartite agreement entered into between the home buyer, the Axis Bank and the "corporate debtor", it is evident that in case of any default by the borrower, the bank would have the right to write to the builder for cancellation of agreement executed between the developer and the borrower, where after the bank shall have the right to pay the sale consideration and get the subject property registered. There is no material on record to evidence that any such cancellation has taken place. The home loan agreement read with the demand letters and the allotment letter clearly specify that when there is a "default" on behalf of the home allottee a penalty interest would have to be paid by the allottee to the bank. Therefore, the "default" aspect is to be seen vis-a-vis the home allottee and the appellant-bank only. It is contended by the respondent that though the allotment letter shows that....
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....der/PA holder of the land owner having rights to construct and sell Flats) WHEREAS under an Agreement for Sale dated ......entered into between the Builder and the Borrower, the Builder has agreed to sell Schedule B property to the Borrower and in furtherance thereof, the Borrower has already paid to the builder Rs. 15,85,000/- (Rupees Fifteen Lac Eighty Five Thousand Only) by way of advance money and the receipt of which is acknowledged by the Builder. WHEREAS the Borrower has approached the Bank to grant him loan of Rs 11,00,000/- (Rupees Eleven lac Only) for purchase of Schedule B property and the Bank has vide its sanction letter dated.... Agreed to sanction the loan of Rs 11,00,000/- (Rupees Eleven lac Only) to the Borrower (hereinafter called "Loan". Whereas Borrower and builder represent that after completion of construction of flat, Builder shall execute Sale Deed for Schedule B property in favour of Borrower in terms of this agreement. Pending execution of Sale Deed, the Bor- rower and the Builder have requested the Bank to disburse the said loan to the Borrower. Bank has agreed to disburse the said loan on the following terms and conditions amon....
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....s the booking of the Borrower, or in the event of failure of the Builder to complete the project, or in the event of death of the Borrower, or in any event where the title to the schedule flat/dwelling unit is not/not being passed on to the Borrower or in any other eventualities of the nature by which the loan advanced by the Bank is not utilised for the purpose for which it was so advanced or breach of any of the terms and conditions contained in this agreement, the entire amount advanced by the Bank on account of the Borrower shall be refunded by the Builder to the Bank. If the entire amount refunded by the Builder is insufficient to close the loan account, Borrower shall make immediate arrangements for payment of such deficit amount as may be required to close the loan account. If the Builder fails to repay the amount as stated under this clause, the Borrower shall repay the entire loan amount with interest, expenses, penal interest, etc. in terms of the loan agreement executed by the Borrower/s. 17. The Builder hereby agrees that the Builder shall not refund the Borrower or any other person any advance/contribution given by the Borrower unless the Builder has taken wri....
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....thdraws from his agreement or Builder cancels the booking of the Borrower, or in the event of failure of the Builder to complete the project, or in the event of death of the Borrower, or in any event where the title to the schedule flat/dwelling unit is not/not being passed on to the Borrower or in any other eventualities of the nature by which the loan advanced by the Bank is not utilised for the purpose for which it was so advanced or breach of any of the terms and conditions contained in this agreement, the entire amount advanced by the Bank on account of the Borrower shall be refunded by the Builder to the Bank. If the entire amount refunded by the Builder is insufficient to close the loan account, Borrower shall make immediate arrangements for payment of such deficit amount as may be required to close the loan account. If the Builder fails to repay the amount as stated under this clause, the Borrower shall repay the entire loan amount with interest, expenses, penal interest, etc. in terms of the loan agreement executed by the Borrower/s." (Emphasis Supplied) 67. This Clause is quite different from the typical clauses of the Tripartite agreement and different from t....
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....t in the present appeal amongst the parties indicates that the entire amount advanced by the bank on account of the borrower shall be refunded by the Corporate Debtor/ Builder to the Appellant/ bank thus in terms of Section 5(8) r/w Section 3(33) of the Code, the same may become a financial debt advanced by the Appellant bank to the Corporate Debtor" 28. This Tribunal set aside the order and remanded the matter. The case of this Tribunal in 'Canara Bank' (supra) was thus based on specific clauses of Tripartite Agreement especially Clauses 13 and 16 as noted above. In the facts of the present case, Tripartite Agreement between the parties does not contain any clause under which the corporate debtor has undertaken the liability to refund the amount to the Bank. Thus, judgment of this Tribunal in 'Canara Bank' (supra) in no manner helps the appellant. 29. The judgment of this Tribunal in [Comp. App. (AT) (Ins.) No.172/2019] in 'Indiabulls Housing Finance Limited' Vs. 'Rudra Buildwell Projects Private Limited', also fully supports the submission of the appellant. In the above case, also India Bull Finance Ltd. has also entered into Tripartite Agreement with the homebuyer, corpora....
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..... Amit Chandrashekhar Poddar [Liquidator For Autocop (India) Private Limited], where this Tribunal has held that in the said case financial creditor was held to be secured financial creditor based on the registered charge with CERSAI in accordance with the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. In the above case facility of discounting was extended to the corporate debtor. In the above case, liquidation order was passed. In the liquidation proceeding, claim was filed before the liquidator as secured financial creditor, which was rejected. In the above context, this Tribunal relying on Regulation 21(c) of Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 held that the registration of charge which CERSAI to be accepted as financial creditor. In paragraph 52 and 53, following was held: "52. In the present appeal before us, the Appellant has indeed entered charge over the assets of the Corporate Debtor with CERSAI, however, the same is not registered with the RoC under Section 77(3) of the Companies, 2013. 53. Thus, we hold that the Appellant should have been treated as secured Financial Credito....