2018 (11) TMI 1411 - Tri - Insolvency and Bankruptcy

Initiation of Corporate Insolvency Resolution Process - sale of flats with assured return plan - developer failed to refund the assured - Financial Debt - corporate debtor committed default in repayment of the outstanding financial debt which exceeds the statutory limit of rupees one Lakh - Held that - The applicant being a home buyer comes within the definition of Financial Creditor. The material placed on record further confirms that applicant financial creditor had disbursed the money to the respondent corporate debtor as consideration for purchase of a unit. Though considerable long period has since lapsed even the principal amount disbursed has not been repaid by the respondent corporate debtor. It is accordingly reiterated that respondent corporate debtor has committed default in repayment of the outstanding financial debt which exceeds the statutory limit of rupees one Lakh. Thus, the application warrant admission as it is complete in all respects. Accordingly, in terms of Section 7(5)(a) of the Code, the present application is admitted.

Issues Involved:
1. Territorial Jurisdiction
2. Financial Creditor and Debt
3. Assured Return Agreement and Settlement
4. Limitation Period
5. Compliance with Section 7 of the Insolvency and Bankruptcy Code, 2016
6. Appointment of Interim Resolution Professional
7. Declaration of Moratorium

Issue-wise Detailed Analysis:

1. Territorial Jurisdiction:
The respondent company, M/s Praveer Constructions Private Limited, has its registered office in New Delhi. Therefore, the National Company Law Tribunal (NCLT), New Delhi, has territorial jurisdiction to adjudicate the matter under Section 60(1) of the Insolvency and Bankruptcy Code, 2016.

2. Financial Creditor and Debt:
The petitioner, Smt. Usha Devi, filed the application as a financial creditor under Section 7 of the Insolvency and Bankruptcy Code, 2016. The application included a proposal for the appointment of Shri Alok Kaushik as the Resolution Professional. The petitioner had booked a unit in the respondent's project under an 'Assured Return Plan' and claimed non-payment of assured returns as per the agreement.

3. Assured Return Agreement and Settlement:
The petitioner entered into a Unit Buyer Agreement and an Addendum to Unit Buyer Agreement in September 2006, which included an assured return clause. A memorandum of settlement dated 28.03.2012 was executed, wherein the respondent agreed to pay ?60,00,000 and allot physical possession of certain floors in the project. The respondent issued various cheques to the petitioner, which were not honored.

4. Limitation Period:
The petitioner provided evidence of continuous acknowledgment of debt by the respondent, including part payment of ?25,000 on 22.01.2015 and an email dated 29.12.2017 assuring resolution within 30 days. The application was filed on 27.04.2018, within the limitation period as per Section 18 of the Limitation Act, 1963.

5. Compliance with Section 7 of the Insolvency and Bankruptcy Code, 2016:
The application met all requirements under Section 7(2) and Section 7(5) of the Code. The petitioner provided complete details of the default, including the dates and supporting documents. The Tribunal found the application to be complete and confirmed that no disciplinary proceedings were pending against the proposed Interim Resolution Professional.

6. Appointment of Interim Resolution Professional:
The Tribunal appointed Mr. Alok Kaushik as the Interim Resolution Professional, directing him to make a public announcement regarding the admission of the application within three days, as per Section 13(2) of the Code.

7. Declaration of Moratorium:
The Tribunal declared a moratorium under Section 14 of the Code, imposing prohibitions on the institution or continuation of suits, transferring or disposing of assets, and recovering property from the corporate debtor. The moratorium does not apply to transactions notified by the Central Government or essential supplies.

Conclusion:
The Tribunal admitted the application under Section 7 of the Insolvency and Bankruptcy Code, 2016, initiated the Corporate Insolvency Resolution Process against the respondent corporate debtor, and appointed an Interim Resolution Professional. The Tribunal also declared a moratorium and directed relevant parties to comply with the provisions of the Code.

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