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TMI Blog2019 (1) TMI 1504X X X X Extracts X X X X X X X X Extracts X X X X ..... reditors can invoke Corporate Insolvency Resolution Process under Section 7 of the code against the respondent corporate debtor in case of default in repayment of financial debt. Admissibility of the application - Held that:- The applicants being home buyers would fall within the definition of 'Financial Creditors'. 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 residential unit. Though a considerable long period has lapsed even the principal amount disbursed has not been repaid by the respondent corporate debtor. It is accordingly held 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. The Interim Insolvency Resolution Professional is directed to make public announcement immediately with regard to admission of this application under Section 7 of the Code. The expression 'immediately' means within three days as clarified by Explanation to Regulation 6 (1) of the IBBI (Insol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng against him in Insolvency and Bankruptcy Board of India or Indian Institute of Insolvency Professionals of ICSI-IPA. In addition, further necessary disclosures have been made by Mr. Agarwal, as per the requirement of the IBBI Regulations. Accordingly, he satisfies the requirement of Section 7(3)(b) of the Code. 4. It is the case of the petitioners that they had booked a unit No. 708 on the 7th Floor in Tower B-1 at Faridabad, Haryana having an area admeasuring 1089 sq.ft. approximately for the total consideration of ₹ 27,22,500/- under the project namely Abacus Technopark of the respondent company. An agreement (Annexure-II) was executed between the parties on 25.04.2011. According to the terms incorporated in the agreement, the Respondent Company undertook to hand over the possession of the said unit to the petitioners by 31.12.2016. The said unit was purchased by the Applicant under the 'Assured Return/Monthly Rent'. According to the terms the Respondent undertook to pay ₹ 54,904/- to the applicant each month, as Assured Returns w.e.f. 01.01.2013. The Respondent started paying the Assured Returns' to the Applicant as per the agreement, but stopped ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ishwam Jindal. Therefore, there is no valid allotment in favour of Mr. Vishwam Jindal for want of his signatures on the Agreement to sell. ii) The application is incomplete and fails to fulfil the basic requirements as stated in Section 7 of the Code. In that regard reliance has been placed on Part IV and Part V of the Form-I of the application. According to the learned counsel the information provided by the petitioners in Part IV and V of Form-I of the application is grossly incomplete. Petitioners have neither attached any authorisation whatsoever in favour of Mr. Puneet Jindal. No documentation of the HUF authorising Mr. Puneet Jindal has been attached to the petition. Further petitioners were also required to provide computation of the amount and days of default in tabular form, as per Row-2 of Part-IV of the Form-I. Petitioners have stated that a copy of statement of account is annexed to the petition but no such accounts have actually beannexed. iii) The application filed by the financial creditors in its present format is not maintainable since the notices referred to in para 11 are frivolous, baseless, malicious and bad in law. In the alleged notice dated 28.03.2018 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d there isno disciplinary proceedings pending against the proposed resolution professional, it may, by order, admit such application; or (b) .. 14. A conjoint reading of the aforesaid provision would show that form and manner of the application has to be the one as prescribed. It is evident from the record that the application has been filed on the proforma prescribed under Rule 4 (2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 read with Section 7 of the Code. We are satisfied that a default amounting to lacs of rupees has occurred. As per requirement of Section 4 of the Code if default amount is one lac or more then the CIR Process would be issued. The application under sub-section 2 of Section 7 is complete; and no disciplinary proceedings are pending against the proposed Interim Resolution Professional. 15. It is pertinent to mention here that clause (8) of Section 5 of the Code has been amended by the Insolvency and Bankruptcy (amendment) Ordinance, 2018 with effect from 6th June, 2018. In view of the revised definition, any amount raised from an allottee under a real estate project is deemed to be an amount having the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... real estate project has to be regarded as a 'Financial Creditors'. The petitioners eminently fulfil the aforesaid condition. 17. The amount has been raised from the petitioners/allottees under a real estate project. In such a situation not only the debt has a commercial effect of borrowings and come within the scope of 'financial debt' but also the petitioners are covered by the definition of expression 'financial creditor'. 18. Therefore, petitioners being financial creditors can invoke Corporate Insolvency Resolution Process under Section 7 of the code against the respondent corporate debtor in case of default in repayment of financial debt. 19. The objection raised by the Corporate Debtor in respect of absence of joint allottee, applicant No. 2 Mr. Vishwam Jindal in the agreement to sell is wholly without substance because the Corporate Debtor had earlier been sending cheques for assured return to the Applicant No. 2 as well was deducting tax at source (TDS) filing Form No. 16A which is patent from a perusal of Annexure-III. It does not lie in the mouth of the Corporate Debtor to take a contrary stand and principles in the nature of estoppel woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rofessional. 25. In pursuance of Section 13 (2) of the Code, we direct that Interim Insolvency Resolution Professional to make public announcement immediately with regard to admission of this application under Section 7 of the Code. The expression 'immediately' means within three days as clarified by Explanation to Regulation 6 (1) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. 26. We also declare moratorium in terms of Section 14 of the Code. A necessary consequence of the moratorium flows from the provisions of Section 14(1)(a), (b), (c) (d) and thus the following prohibitions are imposed which must be followed by all and sundry: (a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; (b) transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein; (c) any action to foreclose, recover or enforce any security interest created by the corporate debtor in respe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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