2019 (12) TMI 1591 - AT - Insolvency and Bankruptcy

Cancellation of agreement - cancellation of agreement - maintainability of the application as an allottee - HELD THAT - Let notice be issued on Respondents by Speed Post. Requisites alongwith process fee, if not already filed, be filed by tomorrow. If the Appellant provides email address of the Respondents, let notice be also issued through email. Post the appeal for orders on 14th January, 2020 for disposal.

Summary

Issues:
1. Cancellation of agreement affecting the status of the applicant as an allottee under Section 5(8)(f)
2. Claim amount and completion of infrastructure project
3. Notice issuance to Respondents and appeal timeline
4. Role of Interim Resolution Professional in the company's functioning

Analysis:

1. The counsel for the Appellant argued that the applicant, Mr. Balram Singh, had cancelled the agreement before filing the application under Section 7. It was contended that this cancellation affected his status as an allottee, making his application under Section 7 not maintainable. The Adjudicating Authority was urged to consider whether Mr. Singh had invested any amount for the time value of the money, a crucial aspect not determined by the Authority.

2. The Appellant agreed to pay the claim amount of Rs.30 Lakhs as demanded by the Respondent. It was highlighted that 70% of the infrastructure project was already complete, with a significant number of allottees having been allocated units. The Appellant assured that funds were arranged, and the project would be finished within six months, aligning with the timeframe for the Corporate Insolvency Resolution Process. A proposed plan for project completion was also submitted.

3. The Tribunal directed the issuance of notice to the Respondents via Speed Post, with additional notice through email if their email addresses were provided. The appeal was scheduled for orders on 14th January, 2020, indicating a timeline for disposal. The Interim Resolution Professional was instructed not to constitute the Committee of Creditors immediately but to ensure the company's ongoing operations and completion of structures for allotment to the allottees. The Professional was empowered to oversee financial transactions, with specific guidelines for cheque signing and bank operations.

4. The Interim Resolution Professional was mandated to present the Tribunal's order to the relevant banks to facilitate operational activities such as payment of bills, salaries, and wages. The Appellant's counsel was given until 3rd January, 2020, to rectify any identified defects in the case documents, ensuring procedural compliance before the specified deadline.