9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (12) TMI 1945 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors or not - allottee or not - HELD THAT - The term Financial Creditor is defined in sub-section (7) of Section 5 of the Code as meaning any person to whom a financial debt is owed and includes a person to whom such debt has been legally assigned or transferred to. The term Financial Debt is defined in sub-section 8 of Section 5 of the Code and the relevant part of the provision upon which the learned counsel for the petitioner has relied upon during arguments and also stated in the synopsis to the original petition is sub-section 8(f) of Section 5 of the Code. Having given thoughtful consideration to the contention raised on behalf of the petitioner the contention that the amount invested in the project by the petitioner can be termed as financial debt as defined in Section 5(8)(f) of the Code, cannot be accepted - In order to bring the transaction within the definition of financial debt the basic requirement is that the money was disbursed against the consideration of time value of money which does not exist in the present case. The learned counsel for the petitioner relied upon the judgment of Hon ble National Company Law Appellate Tribunal, New Delhi in NIKHIL MEHTA AND SONS VERSUS AMR INFRASTRUCTURE LTD. 2017 (8) TMI 1017 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI in support of his contention. The facts of that case are quite different. In the said case the petitioner entered into different agreements/MOU with the Company (corporate debtor) for purchase of 3 units being a residential flat, shop and office space in the projects. That was therefore the case of a home buyer. It was further observed that the question whether the appellants came within the relevant clause of one of the Memorandum of Understanding dated 12.04.2008. In the said case the Investor was interested in booking of a shop for a total consideration amount of 46,67,402/- and the mode of payment by cheque was also mentioned. The relevant term of Memorandum of Understanding was that most of the consideration paid as on 19.03.2008 by the Investor was on the condition that the Developer was ready to pay the monthly committed returns to the Investor. The Investors however was not interested to get the monthly return till December 2008 i.e. for 9 months. Accordingly the Developer undertook to make payment of the consolidated amount of 99,600/- less TDS as applicable every calendar month to the Investor as committed return w.e.f. January 2009 up to the date of handing over of the possession - It was thus clear that the appellants had chosen the committed return which the Developer in turn agreed to pay monthly committed returns thereby covered within the definition of the term Financial Creditor as the transaction was found to be having the time value of money and thus the case was found to be covered within the definition of Section 5(8)(f) of the Code. In the present case there is no such term of the assured return or any agreement which may amount to the repayment for the time value of money. Simply because the petitioner has invested the money for the project being a Promoter would not fall within the definition of term Financial Creditor under any circumstance. This was not a case of a forward sale or purchase agreement having effect of borrowing rather the petitioner was equally interested in the project to be marked for sale. Allottee or not - HELD THAT - The term Allottee is defined in clause (d) of Section 2 of RERA Act. It says that allottee in relation to a real estate project, means the person to whom a plot, apartment or buildings, as the case may be, has been allotted, sold (whether as freehold or leasehold) or otherwise transferred by the promoter, and includes the person who subsequently acquires the said allotment through sale, transfer or otherwise but does not include a person to whom such plot, apartment or building, as the case may be, is given on rent - in the facts of the present case, under no circumstance the petitioner can be considered an allottee under RERA Act. As a Promoter, the petitioner is equally interested in the completion of the project to be marked for the purpose of its business and cannot be an allottee at all. The petitioner is not covered within the definition of the term Financial Creditor as defined in Section 5(7) of the Code - petition dismissed.
Issues Involved:
1. Whether the petitioner qualifies as a "Financial Creditor" under the Insolvency and Bankruptcy Code, 2016. 2. Whether the amount invested by the petitioner constitutes a "Financial Debt" as per Section 5(8)(f) of the Code. 3. Applicability of the explanation to sub-clause (f) of Section 5(8) of the Code introduced by Amendment Act 26 of 2018. Issue-wise Detailed Analysis: 1. Whether the petitioner qualifies as a "Financial Creditor" under the Insolvency and Bankruptcy Code, 2016: The petitioner, M/s Jagbasera Infratech Pvt. Ltd., filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the insolvency resolution process against the respondent-corporate debtor. The primary issue is whether the petitioner can be prima facie covered within the definition of the term "Financial Creditor." According to sub-section (7) of Section 5 of the Code, a "Financial Creditor" means any person to whom a financial debt is owed. The Tribunal concluded that the petitioner does not qualify as a "Financial Creditor" because the transaction did not involve the consideration of time value of money, which is a fundamental requirement. 2. Whether the amount invested by the petitioner constitutes a "Financial Debt" as per Section 5(8)(f) of the Code: The petitioner argued that the amount of ?4,21,37,850/- paid to the respondent is covered under the definition of "Financial Debt" as per Section 5(8)(f) of the Code. The relevant provision states that "Financial Debt" includes any amount raised under any transaction having the commercial effect of a borrowing. However, the Tribunal found that the amount invested by the petitioner cannot be termed as "Financial Debt" because the basic requirement of money being disbursed against the consideration of time value of money does not exist in this case. The Tribunal referred to previous judgments, including M/s Nikhil Mehta and Sons Vs. AMR Infrastructure Ltd., but found that the facts of the present case differ significantly. 3. Applicability of the explanation to sub-clause (f) of Section 5(8) of the Code introduced by Amendment Act 26 of 2018: The petitioner also relied on the explanation to sub-clause (f) of Section 5(8) of the Code, which states that any amount raised from an allottee under a real estate project shall be deemed to have the commercial effect of a borrowing. The Tribunal examined whether the petitioner could be considered an "Allottee" under the Real Estate (Regulation and Development) Act, 2016 (RERA). The term "Allottee" is defined in clause (d) of Section 2 of RERA Act. The Tribunal concluded that the petitioner, being a Promoter interested in the completion and marketing of the project, cannot be considered an allottee. Therefore, the explanation to sub-clause (f) of Section 5(8) does not apply to the petitioner. Conclusion: The Tribunal concluded that the petitioner does not qualify as a "Financial Creditor" under Section 5(7) of the Code. Consequently, the petition was rejected in limine. The Tribunal emphasized that the petitioner, as a Promoter, was equally interested in the project and did not meet the criteria for being considered a "Financial Creditor" or an "Allottee" under RERA. The order was communicated to both parties and pronounced in open court.
|
