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2019 (2) TMI 1849 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT - It is on record that the Corporate Debtor/Respondent was to handover the possession of the apartment within 60 months, i.e. 42 months (commitment period) 6 months grace period 12 months extended period from the date of approval of building plan and on fulfilment of the pre-conditions imposed thereunder as per clause 13.3 to 13.5 of the Agreement. Despite the approval of building plan on 23rd July 2013 project could not be started due to the certain pre imposed conditions, including but not limited to obtaining the grant of approval by Ministry of Environment and Fire Safety approval, before the commencement of construction. The Respondent obtained the environmental approval on 12th December 2013 and the said approval reiterated the requirement of approval by the Fire Department. Therefore, the Respondent applied for the Fire safety Approval on 23rd October 2013, and before starting any construction, approval from the Fire Department, in terms of Section 15 of the Haryana Fire Safety Act, 2009 was material for the fulfilment of the obligations of the Respondent and commencement of construction. Accordingly, the date of handover of possession is to be computed from the date of grant of Fire Safety Approval, i.e. dated 27th November 2014. Before that, the letter for handing over possession was already issued to the Appellant. If the intention of the allottees is only for recovery of the money and not for resolution for possession by apartment, then the Corporate Debtor may bring to the notice of the Adjudicating Authority. Appeal dismissed.
Issues Involved:
1. Rejection of Application under Section 7 of the Insolvency and Bankruptcy Code, 2016. 2. Alleged default by the Respondent in delivering possession of the real estate unit. 3. Applicability of the Principle of Law laid down by the Hon'ble Supreme Court in similar cases. 4. Determination of the due date for possession and compliance with the Apartment Buyer's Agreement. 5. Whether the Petition was filed to harass the Corporate Debtor. 6. Interpretation of the term "default" under the I&B Code. Issue-wise Detailed Analysis: 1. Rejection of Application under Section 7 of the Insolvency and Bankruptcy Code, 2016: The Appellant, a Financial Creditor, filed an Application under Section 7 of the I&B Code for initiation of the Corporate Insolvency Resolution Process (CIRP) against the Respondent. The Adjudicating Authority rejected this Application, which led to the present Appeal. 2. Alleged default by the Respondent in delivering possession of the real estate unit: The Appellant booked a unit in the Respondent's real estate project and paid a substantial amount. Despite timely payments by the Appellant, the Respondent failed to deliver possession by the stipulated date of July 2017. The Appellant terminated the Agreement and sought a refund along with interest. The Respondent argued that the delay in possession was due to preconditions for building approval, including Fire Safety Scheme approval, which was granted on 27th November 2014. Thus, the proposed possession date was extended to 27th November 2019. 3. Applicability of the Principle of Law laid down by the Hon'ble Supreme Court in similar cases: The Appellant cited the Supreme Court's judgment in Pioneer Urban Land & Infrastructure Ltd. v. Govindan Raghavan, which held that a homebuyer cannot be forced to wait indefinitely for possession. The Appellant also referred to the National Consumer Disputes Redressal Commission's decision in Abhishek Khanna v. Ireo Grace Realtech (P.) Ltd., which supported the Appellant's claim for a refund due to delayed possession. 4. Determination of the due date for possession and compliance with the Apartment Buyer's Agreement: The Respondent contended that the possession date should be calculated from the date of Fire Safety Approval (27th November 2014), making the due date for possession 27th November 2019. The Respondent had applied for the Occupational Certificate within the time frame and offered possession to the Appellant within the stipulated period. 5. Whether the Petition was filed to harass the Corporate Debtor: The Respondent argued that the Petition was filed to harass and extract money from the Corporate Debtor. They emphasized that they had fulfilled their obligations under the Agreement and offered possession within the agreed timeline. The Respondent also highlighted that many units were ready, and possession had been offered to other allottees. 6. Interpretation of the term "default" under the I&B Code: The Adjudicating Authority concluded that there was no default on the part of the Corporate Debtor, as the possession date was extended due to preconditions for building approval. Furthermore, the Appellant failed to prove that any debt was due and payable by the Corporate Debtor. The Tribunal also noted that the Appellant's intention appeared to be the recovery of money rather than possession of the unit. Conclusion: The Tribunal upheld the Adjudicating Authority's decision, finding no justification for interference. The Appeal was dismissed, with no order as to costs. The Tribunal emphasized the need to determine whether the allottees sought a refund or possession and referred to the Hon'ble Supreme Court's guidance in Pioneer Urban Land & Infrastructure Ltd. v. Union of India.
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