2019 (9) TMI 1367 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT - The Additional Affidavit filed by the CD on 3/09/2019 shows that the Occupational Certificate was applied by the CD on 5-7-2018 and the same was received by it on 31-5-2019 and the Email for the termination of the Agreement was sent on 08-12-2018 which was 5 months after the occupational certificate was obtained from the authorities by the CD. Hence the CD had fulfilled its obligation of applying for the occupational certificate with in the time frame. Also vide letter dated 14-6-2019, the CD has written to the FC stating that the Apartment No. CD -A6-02-203, Type-3 BHK, Floor 2, Tower A6 in Corridors, Sector 67A, Dhumaspur, Gurgaon is ready for possession. This Tribunal is of the opinion that it is not a fit case to initiate Insolvency process as prayed for by the petitioner/applicant - application dismissed.

Summary

Issues:
1. Application under section 7 of Insolvency and Bankruptcy Code, 2016 for initiation of Corporate Insolvency process.
2. Determination of the Financial Creditor status of the Applicant.
3. Allegations of non-delivery of possession and non-refund of amount paid by the Financial Creditor.
4. Dispute regarding the timeline for possession delivery by the Corporate Debtor.
5. Compliance with contractual obligations and Force Majeure clause.
6. Evaluation of the evidence and submissions from both parties.

Issue 1: Application under section 7 of Insolvency and Bankruptcy Code, 2016 for initiation of Corporate Insolvency process:
The Applicant filed under section 7 of the Insolvency and Bankruptcy Code seeking initiation of Corporate Insolvency process against the Corporate Debtor based on non-delivery of possession and non-refund of the amount paid.

Issue 2: Determination of the Financial Creditor status of the Applicant:
The Tribunal established the Applicant as a Financial Creditor based on the provisions of the Code and the judgment in Pioneer Urban Land & Infrastructure Ltd. v. Union of India, confirming the Applicant's status as a Financial Creditor.

Issue 3: Allegations of non-delivery of possession and non-refund of amount paid by the Financial Creditor:
The Applicant alleged non-delivery of possession despite payment and failure to refund the amount by the Corporate Debtor, leading to the initiation of the insolvency process.

Issue 4: Dispute regarding the timeline for possession delivery by the Corporate Debtor:
The Corporate Debtor contended that the possession delivery timeline should be calculated from the date of the last pre-condition fulfillment, asserting compliance within the stipulated period, thereby denying any delay in possession delivery.

Issue 5: Compliance with contractual obligations and Force Majeure clause:
The Tribunal examined the contractual obligations, including the Force Majeure clause, to determine the validity of the Corporate Debtor's actions in relation to possession delivery and refund obligations.

Issue 6: Evaluation of the evidence and submissions from both parties:
After considering the submissions, including the Additional Affidavit and correspondence between the parties, the Tribunal concluded that the case did not warrant the initiation of the insolvency process, leading to the dismissal of the application without costs.

This judgment involved a detailed analysis of the Applicant's Financial Creditor status, allegations of non-delivery of possession and non-refund of amount, interpretation of contractual obligations, and the evaluation of evidence to determine the appropriateness of initiating the insolvency process. The Tribunal's decision was based on a thorough examination of the facts and legal provisions, ultimately leading to the dismissal of the application.