TaxTMI 
TaxTMI 
2026 (8) TMI 1227
X X X X Extracts X X X X
X X X X Extracts X X X X
....be a "financial creditor", in the light of the provisions contained under Section 5(8)(f) of the Code. For the purposes of brevity they are being decided together. 2. The appellants have respectively challenged the Impugned Order dated 13.05.2025 that, was passed in I.A. 2471 of 2024, which was preferred in CP (IBPP) No. 01/PB/2023. 3. The case of the appellant had been that the respondent - Corporate Debtor is said to have floated a project under the name and style of "RG Regency Pvt. Ltd.", and the appellants of these company appeals claim themselves that, they are the purchasers of the flats, as it is under consideration herein in relation to flat No.B-1603, B-2601, B-2602 and H-2406, which was measuring about 6599 sq. ft. claimed to have been conveyed, to them for the total consideration of Rs. 1,35,00,000/-. The appellant's contention is that as the consequence of the aforesaid offer for purchase of the aforesaid flats, the appellant allege that, they have paid the full and final payment of the said consideration and in pursuance to which, an agreement for sale, too was said to have been executed on 24th November, 2015 between the appellant and the corporate debtor and i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....(f) of the I&B Code. The contention of the appellant had been that, the learned Adjudicating Authority by the impugned Order had upheld the validity of agreement to sale dated 24.11.2015, which was said to have been executed between the appellant and the corporate debtor and had directed the remittance of the amount of Rs. 1,35,00,000/- too, but had simultaneously declined to recognize the appellant and accord them the status of, being the financial creditor in terms of the Explanation to Section 5(8)(f) of the Code. 7. The facts, which had been brought on record would involve the interpretation of the contents of the agreement for sale that, was executed inter se between the parties on 24.11.2015. If we go through the contents of the agreement for sale, what could be seen is that the said agreement for sale is an unregistered document, in relation to an immovable property, and it has a reference that, the entire amount has been remitted and no dues were left to be paid, but simultaneously and rather peculiarly in itself, it contained a Clause 7(d) pertaining to the confirmation to give an appreciation to the second party of the said agreement by giving an appreciation cheque re....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... till the date of its actual recovery. These proceedings are admittedly pending consideration. 9. Another fact, which is revealed from the record is that, while the recourse to the arbitral proceedings have already been resorted to by the appellants, and the same is pending consideration. Further in lieu of sale consideration, which has been paid by the appellant, the appreciation amount for which a cheque was issued by the respondent (corporate debtor) had bounced. The appellant had also initiated proceeding under Section 138 of the Negotiable Instrument Act and same is pending consideration. 10. It is under these circumstances that the appellant had filed their respective I.A.s, being I.A. Nos. 2527 of 2024, 2531 of 2024, 2432 of 2024, 2465 of 2024 and 2471 of 2024. In all these I.A.s. those were preferred on 25.04.2024, the applicants to it, i.e. the appellants herein, while invoking the provisions contained under Section 60(5) of (I&B) Code, besides raising a claim, contended that, the respondent to admit the full amount as respectively paid by each of them individually, owing to the consideration that has exchanged hands because of the agreement for sale. They have simul....
X X X X Extracts X X X X
X X X X Extracts X X X X
....en independently defined under Sub-Section 7 of Section 5 of the Code. The same is extracted herein: "5(7) "financial creditor" means any person to whom a financial debt is owed and includes a person to whom such debt has been legally assigned or transferred to" 14. If the language used in the definition of "Financial Creditor, the legislative has specifically prescribed that, there has to be a "financial debt i.e. owed", to whom such debt has been "legally assigned or transferred". In the instant case, because of the fact that, the amount remitted under the agreement for sale since there was a breach in the allotments and the appellant had admittedly had already invoked the Arbitration Clause, where they themselves have claimed for remittance of the amount. In that eventuality, they do not continue to enjoy the status of that being of an allottee, may be that, there happens to be an agreed agreement for sale though being unregistered. For the purposes to bring a person within the ambit of a financial creditor as prescribed under Sub-Section 7 of Section 5, it uses the expression "financial debt". Word "financial debt" has been more elaborately dealt with under Sub-Sect....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd for the said purpose, we will have to borrow the definition of debt as given under Sub-Section 11 of Section 3 of the Code. It means a liability or an obligation. The "debt" has been defined as under:- "3(11) "debt" means a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operational debt;" 16. The liability or an obligation, it prescribes a continuation feature to sustain a claim that obligation is continuous and not a ceased obligation, which is due to be paid by the CD, to a person as it is the case at hand. And that has made it inclusive of the financial debt. In the instant case, filing of an I.A. in which the impugned order has been passed where the appellant has sought determination of its status to be declared as to be a financial creditor, may not be possible for the reason being that according to the debt as defined under Sub-Section 11 of Section 3, it has to be "liability or an obligation". The aspect of liability and obligation, so far as the appellants are concerned that, stood ceased as soon as they have accepted the cheque of refund of amount issued by the respondent and which by their volunt....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... complete the same in the agreed period. 5. That at the time of execution of the documents, the respondents also gave symbolic possession of the booked flats on papers. The appreciation cheques alongwith the cheque of principal amount invested with the respondents and cheques of personal guarantee and personal guarantee appreciation cheques were also handed over to the claimant in June, 2018 at the time of handing over the Agreement to Sell dated 24 /11/2015." 18. It is submitted by the Counsel for the respondent that if those were the conditions of para 4 and 5 of pleadings, for invocation of the arbitration clause, the agreement for sale itself cannot be treated to be the a complete transfer or a delivery of the property in question because its own case of the appellant in the pleading raised before Arbitration Tribunal that it was only a symbolic possession was given and was dependent upon satisfaction of certain connections which were to be satisfied, and besides there was an admitted expression given that, it was agreed by the respondent to complete the construction and to deliver the fully constructed vacant and peaceful possession. What is being argued by the Cou....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... circumstances, to treat a particular segment of that class differently for the purposes of another enactment, on the ground that one or some of them had elected to take back the deposits together with such interest as ordered by the competent authority, would be highly inequitable. As held in Natwar Agarwal (HUF) (Supra) by the Mumbai Bench of National Company Law Tribunal the underlying claim of an aggrieved party is crystallized in the form of a Court order or decree. That does not alter or disturb the status of the concerned party - in the present case of allottees as financial creditors. Furthermore, Section 238 of the IBC contains a non obstante clause which gives overriding effect to its provisions. Consequently its provisions acquire primacy, and cannot be read as subordinate to the RERA Act. In any case, the distinction made by the R.P. is artificial; it amounts to "hyper-classification" and falls afoul of Article 14. Such an interpretation cannot therefore, be countenanced." 20. This case was factually based upon altogether a different circumstance where a classification was being made as amongst the allottees based upon a class of allottees being a decree holder by Ju....