TaxTMI 
TaxTMI 
2026 (2) TMI 538
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....e claim of the Appellant - R.R. Securities and Finance Pvt. Ltd. ("RRSFPL" in short) in the Corporate Insolvency Resolution Process ("CIRP" in short) of the Corporate Debtor-DMC Infrastructure Pvt. Ltd ("DMCIL" in short). Aggrieved by the impugned order, the present appeal has been preferred by the Appellant. 2. Coming to the factual matrix, it is relevant to note that JMD Commercial Pvt. Ltd. ("JMDCPL" in short) a sister concern of the Corporate Debtor-DMCIL had purchased goods valued at approximately Rs. 6.39 Crores from M/s RS International. JMDCPL purportedly failed to honour its payment obligations resulting in substantial outstanding dues. To resolve their outstanding debt, a Collaboration-cum-Redevelopment Agreement dated 07.08.2017 was executed between DMCIL, JMDCPL, certain shareholder/promoters of the Corporate Debtor and RS International under which agreement limited lease-hold rights over the immovable property-Filmistaan Cinema (hereinafter referred to as "subject property") owned by DMCIL-Corporate Debtor was purportedly given to RS International. However, due to unresolved encumbrances and other subsisting third-party interests in the said property, the proposed r....
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....grieved by the impugned order, the present appeal has been preferred by the Appellant. 3. Making submissions on behalf of the Appellant, Shri Paras Mithal, Ld. Counsel contended that the Adjudicating Authority, failed to appreciate holistically the continuous chain of commercial transactions commencing with the purchase of goods by JMDCPL from RS International in 2017; the unpaid debts arising from these transactions which in turn led to the execution of Collaboration-cum-Redevelopment Agreement dated 07.08.2017 towards liquidation of the outstanding dues followed by an Assignment Agreement dated 31.03.2021 executed in favour of the Appellant besides a joint acknowledgment and guarantee deed dated 31.03.2021 by the Corporate Debtor and JMDCPL in favour of the Appellant. It was contended that the Adjudicating Authority also failed to appreciate that these developments are fully supported by documentary evidence. However, the Adjudicating Authority erred in having perused these documents in isolation without looking at them in their totality. When seen together, these documents clearly establish a legally enforceable monetary liability qua the Corporate Debtor. Submission was also....
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....or and subsisting security interest of the Corporation Bank (now Union Bank of India). In the absence of resolution of such encumbrance, no vested or crystallized rights had accrued in favour of the Appellant. The Appellant therefore had no legal basis to seek modification of the Information Memorandum as the subject property did not vest in the Appellant. It was also pressed that the letter of 31.03.2021 from the Corporate Debtor and JMDCPL to the Appellant which has been claimed by the Appellant to be a deed of corporate guarantee did not constitute an enforceable document as it was not duly executed, stamped or properly notarized and was only a unilateral offer made by the Corporate Debtor and there is no acknowledgment or acceptance of the same by the RS International. Hence this letter was incapable of creating any binding guarantee and at best was an incomplete and inchoate document. The RP further contended that the claim of the Appellant was rejected not only on the ground of absence of their enforceable rights over the subject property but also for no evidence to show either supply of goods or services by them; or lack of proof of any loan having been advanced or disbursed....
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....stantively established a legally enforceable financial obligation on the part of the Corporate Debtor-DMCIL qua the Appellant. One of the principal documents relied upon by the Appellant in support of their claim is the Collaboration-cum-Redevelopment Agreement of 07.08.2017. While acknowledging the fact that the Collaboration-cum-Redevelopment Agreement stipulated that the Corporate Debtor was required to take certain steps to remove the encumbrances on the subject property, it was contended that even if the encumbrances were not cleared by the Corporate Debtor, this did not undermine the underlying outstanding debt which gave rise to the monetary claim of the Appellant. 9. Per contra, it is the contention of the Respondent-RP that in terms of the Collaboration-cum-Redevelopment Agreement, it is an admitted fact the Corporate Debtor was required to take steps to remove the encumbrances of the Union Bank of India over the subject property. It was contended that it is also an undisputed fact that these encumbrances were not cleared by the Corporate Debtor and, therefore, the rights arising from the Collaboration-cum- Redevelopment Agreement had not crystallised into an enforceabl....
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....ent, 'JMD' has an outstanding liability of Rs. 6,39,40,140/- (Rupees Six Crore Thirty-Nine Lakh Forty Thousand One Hundred Forty Only) owed to 'RS International' for goods purchased during the period spanning from April 2017 to June 2017. In an effort to resolve the outstanding debt of 'JMD' towards 'RS International', the parties are entering into a mutual agreement to discharge the aforementioned liability. As part of the agreement, it has been decided that 'RS International' will be granted specific rights over the sole immovable asset of the sister concern of 'JMD' namely 'DMC', which is the "Filmistaan Clnema" property located at Model Basti, Bara Hindu Rao, Delhl-110005 (hereinafter referred to as the "Subject Property"). The Subject Property, being the primary and significant asset of DMC, shall hold a central place in the arrangement to liquidate the debt owed to 'RS International'. The terms and nature of the rights granted are outlined in further detail in the subsequent clauses of this agreement, ensuring that the interests of 'RS International' are secured in accordance with the mutual unde....
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....orporate Persons) Regulations,2016 enjoins upon the RP to verify claims submitted by creditors, there was nothing unusual on the part of the RP to take notice that there existed grounds for doubting the authenticity and bonafide of the documents basis which claims were raised. Be that as it may, we do not wish to comment on this aspect since records placed before us do not carry proof as to whether the RP had sought further clarifications from the concerned on this aspect while considering the claims of the Appellant to determine their authenticity and accuracy. 12. However, more importantly, when we look at the terms of the above Collaboration cum Redevelopment Agreement, it becomes clear that the rights of RS International over the subject property was contingent upon resolution of the encumbrance. When this condition precedent of resolution of the encumbrances had admittedly remained unmet, the RS International and the Appellant as their assignee could not have claimed benefit of the subject property. The RS International and their assignee could have claimed remedies available under the Collaboration cum Redevelopment Agreement only when the title deed of the subject propert....
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....he ASSIGNEE all its rights, title, and interest in and to 'the Assigned Units, as detailed in 'Schedule A' [of the Collaboration Agreement], along with all associated obligations under the Collaboration Agreement. 1.2. The ASSIGNEE hereby accepts such assignment and agrees to perform all obligations under the Collaboration Agreement previously undertaken by the ASSIGNOR, including but not limited to pursuing any litigation, obtaining necessary approvals, and executing the Collaboration Agreement with DMC. 16. We notice that the above terms of the Assignment Deed have also been noticed by the Adjudicating Authority in the impugned order at para 15. From a plain reading of the above Clauses of the Assignment Deed, it is evident that this deed clearly identified the select portions of the redeveloped property on which RS International as the Assignor had exclusive rights. That the subject property was not redeveloped owing to non-removal of encumbrances over the subject property has also not been controverted by the Appellant. Since the redeveloped units had not come into existence, the Adjudicating Authority committed no mistake in holding that no rights, titl....
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....n of the Collaboration- cum-Redevelopment Agreement of 07.08.2017 and this letter clearly altered the terms of the Collaboration-cum-Redevelopment Agreement, the letter should have been consented to by all the parties who were signatories to the Collaboration-cum-Redevelopment Agreement. It was therefore vehemently contended that in the absence of a formal agreement, this letter was thus at best an incomplete and inchoate document incapable of creating any binding guarantee. 19. To arrive at our findings, we would like to advert our attention to the letter dated 31.03.2021 and the signatories therein basis which the Appellant has claimed this document to be a formal Guarantee Deed. The said letter which appears at page 84 of the Appeal Paper Book is as reproduced below: Date: 31-03-2021 To, Mis. RR Securities & Finance Pvt. Ltd. T-36, 3rd Floor, Road No. 20 Baljeet Nagar, Lal Mandir Patel Nagar New Delhi-110008 Subject : Request for more time and confirmation of outstanding balance Sir, We are writing regarding the outstanding liability of 'JMD Commercials Pvt. Ltd.' owed to 'RR Securiti....