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TMI Blog2018 (3) TMI 1266X X X X Extracts X X X X X X X X Extracts X X X X ..... a company incorporated on 23.03.2003 under the Companies Act, 1956 and has its registered office at 99 Patparganj, Delhi-110091. Since the registered office of the respondent company is in Delhi, this Tribunal having territorial jurisdiction over the place is the Adjudicating Authority in relation to the prayer for initiation of Corporate Insolvency Resolution Process in respect of respondent corporate debtor under sub-section (1) of Section 60 of the Code. 3. It is the case of the applicants that applicant No. 1 and his mother applicant No. 2, booked a commercial shop No. F-4 having a super area of 283 sq. ft. with assured return plan @ 14% per annum till 6 years and 16% in the seventh year in the Green Avenue project. The applicants have paid a total sum of Rs. 25,77,565/- (Rupees Twenty Five lakhs Seventy Seven thousand Five Hundred Sixty Five only), on which the Corporate debtor Company issued an allotment letter dated 23.07.2013 containing terms and conditions of the said allotment. Copy of the allotment letter dated 23.07.2013 stated to be the builder buyers agreement, has been placed on record. It is submitted that as per terms of the agreement executed on 23.07.2013, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest @ 18% thereon for the delayed period. Copies of the acknowledgement receipts issued by the corporate debtor towards payment of Rs. 25,77,565/- (Rupees Twenty Five lakhs Seventy Seven thousand Five Hundred Sixty Five only) have also been placed on record. 8. It is further stated that the corporate debtor company has within the period of 7 days from the receipt of cancellation letter or even thereafter failed and neglected to pay the principal sum of Rs. 25,77,565/- (Rupees Twenty Five Lakhs Seventy Seven Thousand Five Hundred Sixty Five only) along with the interest @ 18% per annum to the petitioners and therefore the corporate debtor company clearly defaulted to pay its debts despite receiving cancellation letter. 9. Further it has been submitted that the applicants apprehend that the corporate debtor will dispose of its assets with a view to defeat the claims of its creditors including the applicant. In view of the default in payment of the claim/debt by the respondent company, applicants have prayed for triggering Corporate Insolvency Resolution Process in respect of respondent corporate debtor. 10. Respondent company has filed its reply on 18/12/2017 in which various ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resent application and that in the complaints filed before the consumer commission. In this regard it is to be seen that the present case has been filed under Section 7 and not under Section 9 of the Code so as to attract the claim of existence of dispute. In the present application filed under Section 7 of the Code, it is no matter that the debt is disputed so long as the debt is due and payable. Similarly variance in the claim of interest itself may not be significant and once the default is more than Rs. 1 lakh as required under Section 4 of the Code the application can be entertained if otherwise found in order and if the applicant is not ineligible. 14. Be that as it may the main contention of the respondent is that the applicants do not come within the definition of "Financial Creditor" and the claimed amount is not a "financial debt" as defined under the Code, and therefore the present application filed under Section 7 of the Code is not maintainable. 15. It is the precise case of the respondent that the contract in question is purely for sale and purchase of the immovable property and after suo moto cancellation seeking refund of the booking amount with interest as compen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te debtor, the present applicants have to satisfy that they come within the definition of "Financial Creditor". 20. The expressions "Financial Creditor" and "Financial debt" have been defined in Section 5(7) and 5(8) of the Code, which are reproduced below. "5. In this part, unless the context otherwise requires, - ............................................................................................... (7) "financial creditor" means any person to whom a financial debt is owed and includes a person to whom such debt has been legally assigned or transferred to; (8) "financial debt" means a debt along with interest, if any, which is disbursed against the consideration for the time value of money and includes- (a) money borrowed against the payment of interest; (b) any amount raised by acceptance under any acceptance credit facility or its de-materialised equivalent; (c) any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument; (d) the amount of any liability in respect of any lease or hire purchase contract which is deemed as a finance or capital lease under the Indian Accounting Sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ". However in the present case respondent has claimed that "till date there is no default in making the payment since the assured return is paid annually by the respondent as per the terms in the allotment letter itself". Applicants have miserably failed to state specifically as to which of the annual assured returns was defaulted and not paid. There is no question of default once the annual assured return is paid annually by the respondent in terms of the allotment letter. Only in case of default in payment of annual assured return, the applicants could have claimed the principal sum and the unpaid annual assured return as "financial debt". Therefore when there is no default in payment of the annual assured return, as per the terms of the agreement the payment of assured return was supposed to have continued till seventh year. 24. On 9th February, 2018 the applicants were asked to clarify as to how in the application date of default has been shown as 17th August, 2017. Ld. Counsel for applicant submitted that the allotment/contract was cancelled on 9th August, 2017, wherein the return of the principal amount with interest was demanded giving 7 days' time from the receipt of the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore the present claim falls within the purview of contractual liability requiring investigation and not a simplicitor "financial debt". It is pertinent to note here that Claims of home buyers and claims arising out of complex financial instruments preferred before IRP under the Regulations are treated as different category claims, distinct and separate from claims of financial and operational creditors. Such home buyers and contractual claimants on suo moto cancellation of their respective contracts cannot come within purview of financial creditor. 28. The present case is distinguishable from the case of Nikhil Mehta & Sons v. AMR Infrastructure Ltd. in Company Appeal (AT) (Insolvency) No. 07 of 2017. In that case there was persistent default in making payment of the assured return, where as in the present case there is no claim that the yearly assured returns were not paid by the respondent company. In other words in the present case there is no default of payment of assured returns. Secondly, in respect of the debt claimed in the present case there is no whisper of inclusion of any unpaid assured return. In the factual background the application is not maintainable as the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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