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2020 (5) TMI 35 - Tri - Insolvency and BankruptcyCIRP proceedings - Entertainment of Lodging of the claim of the Home Buyers - Resolution Professional (RP) rejected the claim - production of additional documents - HELD THAT - The documents bearing 1004/2014 in relation to the property is registered with sub-registrar Office, Thiruvallur, which is sought to be relied upon for the purpose of conveyance of undivided share of land as prescribed in the Schedule of property in the said registered documents. In addition, Memorandum of Agreement as entered into between the parties dated 25-3-2014 is also sought to be relied on by the Applicants to establish that the monies which are figuring in the respective Sale Agreements or Memorandum of Agreements have been duly paid to the Corporate Debtor, and in the said circumstance, the Claim cannot be rejected and that all the payments which are also extracted hereinabove by way of tabulation in Para supra are in relation to the purchase of properties, and hence, it is appropriate that the Applicant should be categorised as 'Home Buyer' and that the Resolution Professional was wrong in not entertaining the Claim as filed under Form CA meant for the Home Buyers. Hon'ble Supreme Court in the case of PIONEER URBAN LAND AND INFRASTRUCTURE LIMITED ANOTHER VERSUS UNION OF INDIA OTHERS 2019 (8) TMI 532 - SUPREME COURT has held that a speculative Home Buyer is not entitled to come as a Financial Creditor under the category as defined under section 5 (8) (f) of the I B Code, 2016 as a Home Buyer - The fact that the three Sale Agreements along with the Memorandum of Agreements which are being touted by the Applicant clearly shows that the transactions, if at all are to be considered as being speculative and the transaction cannot considered as genuine made from the stand point of a Home Buyer so as to come for the claim to be lodged in Form CA. The lodging of the claim with the Resolution Professional being a stale claim and trying to enforce before the Adjudicating Authority upon its rejection cannot be countenanced - Application dismissed.
Issues Involved:
1. Rejection of the claim of ?20,37,500 by the Resolution Professional. 2. Classification of the Applicant as a Home Buyer. 3. Adequacy and validity of the documents submitted by the Applicant. 4. Timeliness and procedural correctness of the claim submission. 5. Allegations of fraudulent trading under section 66 of the I&B Code, 2016. Issue-wise Detailed Analysis: 1. Rejection of the claim of ?20,37,500 by the Resolution Professional: The Applicant filed a claim for ?20,37,500 in Form CA under Regulation 8A of the Insolvency & Bankruptcy (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The claim was rejected by the Resolution Professional on 28-12-2018 due to the absence of receipts. The Applicant contended that adequate documents were provided to establish the claim, but the Resolution Professional did not accept them. 2. Classification of the Applicant as a Home Buyer: The Resolution Professional argued that the Applicant cannot be considered a Home Buyer and thus, lodging the claim in Form CA was inappropriate. The Applicant insisted that the payments were made for the purchase of properties and should be classified as a Home Buyer. The Tribunal noted that speculative transactions or those serving as security for financial transactions do not qualify the Applicant as a Home Buyer under section 5(8)(f) of the I&B Code, 2016. 3. Adequacy and validity of the documents submitted by the Applicant: The Resolution Professional highlighted inconsistencies in the documents, such as discrepancies between cash receipts and registered sale agreements. The forensic audit also revealed a lack of correlation between the payments and the Corporate Debtor’s accounts. The Tribunal emphasized the need for irrefutable proof, such as bank statements and proper receipts, to establish the claim. The Applicant failed to provide sufficient evidence to support the claim. 4. Timeliness and procedural correctness of the claim submission: The Resolution Professional argued that the claim was lodged beyond the 90-day period without seeking condonation of delay from the Adjudicating Authority. The Tribunal acknowledged this procedural lapse as a valid ground for rejecting the claim. 5. Allegations of fraudulent trading under section 66 of the I&B Code, 2016: The Resolution Professional suggested that the transactions might fall under fraudulent trading, as the Applicant appeared to be acting in concert with other claimants. The Tribunal found merit in this argument, noting that the transactions seemed speculative and lacked bona fide intent. Conclusion: The Tribunal dismissed the Application, upholding the Resolution Professional's decision to reject the claim. The Tribunal found that the Applicant failed to provide adequate proof of payment and did not meet the criteria for classification as a Home Buyer. Additionally, the claim was procedurally flawed due to late submission. The Tribunal also considered the possibility of fraudulent trading, further justifying the rejection of the claim.
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