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2021 (12) TMI 288 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - main contention of the Financial Creditor is that the IBMS charges have not been properly used for the purposes for which they have been charged under clause 11.2 of the agreement - existence of debt and dispute or not - HELD THAT - The provision for IBMS has been made in order to pay maintenance bills, other charges raised by the maintenance agency, etc. It has been stated said in clause of the agreement that the IBMS charges cannot be utilised for any other purposes other than that has been mentioned in the said clause. The Corporate Debtor has himself admitted that the amount has been utilized for the purpose of construction of a club, restaurant, swimming pool and 62-seatermini theatre. Since, the financial creditor satisfies all the requirement of section 7 of IBC, 2016, it is satisfying that the applicant/Financial Creditor has made out a case under Section 7 IBC for admission and a clear case of default has been established. Hence, the Corporate Insolvency Resolution Process of Corporate Debtor is initiated from the date of this order and the captioned application filed by Financial Creditor is admitted. Application admitted - moratorium declared.
Issues Involved:
1. Default in refunding Interest-Bearing Maintenance Security (IBMS). 2. Non-payment of common area maintenance and electricity charges. 3. Default in payment towards defect/deficiency in service. Issue-wise Detailed Analysis: 1. Default in refunding Interest-Bearing Maintenance Security (IBMS): The Financial Creditor, an association of homebuyers, filed an application under Section 7 of the IBC Code, 2016, against the Corporate Debtor for failing to refund the IBMS collected from homebuyers. The Financial Creditor claimed a default amount of ?11,48,01,577 as principal and ?10,34,80,468 as interest. The Corporate Debtor countered that the IBMS was used for project expenses and additional facilities, citing Clause 11.2 of the agreement, which allows utilization for maintenance services and related upgrades. However, the Tribunal noted that the Corporate Debtor admitted using the IBMS for constructing a club, restaurant, swimming pool, and mini theatre, which was beyond the scope defined in Clause 11.2. The Tribunal found a breach of the agreement, satisfying the conditions for default under Section 7 of the IBC. 2. Non-payment of common area maintenance and electricity charges: The Financial Creditor alleged that the Corporate Debtor failed to pay ?1,82,02,620 for common area maintenance and electricity charges from the date of accrual until allotment to homebuyers. The Tribunal reviewed the pleadings and documents and found that the Corporate Debtor did not provide sufficient evidence to refute this claim. The Tribunal concluded that the Corporate Debtor defaulted on these payments, further substantiating the Financial Creditor's case. 3. Default in payment towards defect/deficiency in service: The Financial Creditor also claimed ?23,21,13,410 for defects and deficiencies in services provided by the Corporate Debtor. Despite repeated requests, the Corporate Debtor did not address these issues. The Tribunal examined the agreement and found that the Corporate Debtor was obligated to rectify such defects. The failure to do so constituted a default, fulfilling another condition under Section 7 of the IBC. Conclusion: The Tribunal determined that the Financial Creditor met all requirements under Section 7 of the IBC, 2016. The application was complete, and there were no disciplinary proceedings against the proposed Insolvency Resolution Professional (IRP). The Tribunal admitted the application, initiating the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. Mr. Gaurav Katiyar was appointed as the IRP, and a moratorium was declared, prohibiting suits, asset transfers, and recovery actions against the Corporate Debtor. The IRP was directed to take charge and ensure compliance with the IBC provisions. The order was communicated to relevant parties and authorities for further action.
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