2022 (11) TMI 1154 - AT - Insolvency and Bankruptcy

Application for appellant for considering it as homebuyer - whether the claim filed by the Appellant in Form-CA should be accepted in the CIRP of the Corporate Debtor? - HELD THAT - As admitted by the Appellant that he advanced a loan of Rs. two crores to the Corporate Debtor, which was disbursed through four demand drafts of Rs. 50 lakhs each between 6.11.2018 and 24.10.2019. When this unsecured loan was defaulted in repayment by the Corporate Debtor, the Appellant filed a section 7 application CP (IB) No. 73/ND/2019, which was disposed of as another section 7 application was admitted on 29.11.2019 against the Corporate Debtor - the second MoU, which is claimed to have been executed between the Appellant and the Corporate Debtor on 23.11.2019 is an unregistered document by which the Appellant was ostensibly allotted seven flats bearing nos. 703 (1370 sq. foot super built up area), 1002 (1445 sq. foot super built up area), 1503 (1370 sq. foot super built up area), 1606 (1370 sq. foot super built up area), 1702 (1445 sq. foot super built up area), 1802 (1445 sq. foot super built up area) and 1802 (1445 sq. foot super built up area), all located in Block D with allotment letters dated 23.11.2019 in all the cases in lieu of the amount pending for repayment by him. The two points are very clear viz. that the entire project with immovable and movable assets, including structures built thereon with entire current, future receivables and current assets from the project were all mortgaged to Canara Bank and such flats would not have been allotted to any person without an NOC from Canara Bank. Also, the Appellant, who claims to be an allottee and desires the benefit of filing his claim as homebuyer in Form-CA, is not an original allottee, but has received the seven flats as in lieu of its due amount of Rs. 3.03 crores from the Corporate Debtor vide a settlement MoU dated 23.11.2019. In the light of very grave doubt that exists regarding the allotment of seven flats to the Appellant, which in the absence of any NOC from Canara Bank could not have been made, we do not think that the RP committed any error in asking the Appellant to file its claim in Form-C instead of Form-CA, as an unsecured creditor, a decision which was affirmed by the Adjudicating Authority vide the Impugned Order dated 8.6.2022 - appeal dismissed.

Summary

Issues:
Whether the claim filed by the Appellant in Form-CA should be accepted in the CIRP of the Corporate Debtor.

Analysis:
The Appellant, a company, filed an appeal against an order passed by the Adjudicating Authority under Section 61 of the Insolvency and Bankruptcy Code (IBC). The Appellant claimed to have given a loan of Rs. 2 crores to the Corporate Debtor, secured by four flats initially, which later changed to an allotment of seven flats through a settlement MOU. The Appellant's claim in Form-CA was rejected by the Resolution Professional (RP), advising to file in Form-C instead of claiming as a homebuyer.

The Appellant argued that the second MOU dated 23.11.2019 established them as an allottee of seven flats, nullifying the earlier security arrangement. However, the RP contended that the flats were mortgaged to Canara Bank, and without an NOC from the bank, the allotment to the Appellant was invalid. The RP also highlighted that the Appellant's debt was originally a financial debt, and the nature of the transaction did not align with typical allottee-developer relationships.

The Tribunal noted the mortgage of all project assets to Canara Bank and the absence of NOC for the allotment of flats to the Appellant. The Tribunal observed discrepancies in the transaction, raising doubts about the validity of the allotment and the compliance with IBC provisions. Consequently, the RP's decision to ask the Appellant to file in Form-C as an unsecured creditor was upheld, affirming the Impugned Order. The appeal was dismissed for lack of merit, with no costs awarded.

In conclusion, the Tribunal's decision focused on the legality and validity of the transaction between the Appellant and the Corporate Debtor, emphasizing compliance with IBC provisions and the necessity of NOC from Canara Bank for the allotment of flats. The judgment upheld the RP's decision to reject the Appellant's claim in Form-CA, considering them an unsecured creditor rather than a homebuyer, based on the circumstances of the transaction and the mortgage arrangements.