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Home Case Index All Cases Insolvency and Bankruptcy Insolvency and Bankruptcy + Tri Insolvency and Bankruptcy - 2019 (10) TMI Tri This

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2019 (10) TMI 1350 - Tri - Insolvency and Bankruptcy


Issues Involved:
1. Limitation period for filing the petition.
2. Merits of the case regarding debt and default.
3. Petitioner's status as a speculative investor.
4. Impact on the real estate sector.

Detailed Analysis:

1. Limitation Period for Filing the Petition:
The Corporate Debtor contended that the debt is barred by limitation since the date of default is mentioned as 01.04.2014, and the petition was filed on 03.07.2019, which is more than three years after the date of default. The Tribunal accepted this contention, referencing judgments from the Hon'ble Supreme Court, including B. K. Education Services Pvt. Ltd. v. Parag Gupta & Associates and Vashdeo R Bhujwani v. Abhyudaya Cooperative Bank Ltd. & Anr., which held that Article 137 of the Limitation Act applies to Insolvency & Bankruptcy Petitions, with a limitation period of three years. Therefore, the petition was dismissed as being hit by limitation.

2. Merits of the Case Regarding Debt and Default:
Despite the limitation issue, the Tribunal examined the merits of the case. The Petitioner sought the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor for a default amounting to Rs. 5,85,35,387/-, including the principal amount and interest. The Corporate Debtor argued that the debt was not due as the Petitioner had not cleared the dues required for possession of the flat. They also contended that they had paid Rs. 15,00,000/- as partial compensation for the delay, which the Petitioner accepted. The Tribunal noted that the flat was ready for possession, and the Petitioner had not taken steps to complete the possession formalities.

3. Petitioner's Status as a Speculative Investor:
The Tribunal observed that the Petitioner had purchased five units from different projects of the Corporate Debtor and received substantial discounts on some units. This indicated that the Petitioner was a speculative investor aiming to benefit from the booming real estate market. The Tribunal inferred that the Petitioner's intention was to extract more compensation rather than resolve the Corporate Debtor's insolvency.

4. Impact on the Real Estate Sector:
The Tribunal expressed concern about the broader implications of admitting such petitions. It highlighted that in a project involving numerous flat buyers, granting compensation or ordering CIRP could lead to chaos in the real estate market, deterring future investments. The Tribunal emphasized that the flat was ready, and the Corporate Debtor had obtained the completion certificate. It concluded that petitions like this should be viewed from a macroeconomic perspective to avoid disrupting the real estate sector.

Conclusion:
The petition was dismissed on the grounds of being barred by limitation. Additionally, the Tribunal found that the Petitioner was a speculative investor seeking compensation rather than resolution. The Tribunal highlighted the potential negative impact on the real estate sector if such petitions were admitted. The Petitioner was granted liberty to approach the appropriate authority for claiming compensation if advised.

 

 

 

 

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