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TMI Blog2020 (3) TMI 159X X X X Extracts X X X X X X X X Extracts X X X X ..... eof into apartments, or the development of land into plots or apartments, as the case maybe, for the purpose of selling all or some of the said apartments or plots or buildings, as the case maybe, and includes the common areas, the development works, all improvements and structures thereon and all easement, rights and appurtenances belonging thereto. In 2005, the Respondent had entered into an agreement with M/s Salarpuria Properties (Private) Limited for construction of residential apartments over its properties. It subsequently entered into an agreement on 15.03.2007, with the Petitioner for allotment of 10 flats/apartments in the developed project. Accordingly the development so carried out would come within the definition of Real Estate Project indicted above. The Petitioner would thus be an allottee in respect of 10 (ten) apartments the Respondent had agreed to sell. The amount raised for the forward sale would accordingly come within the definition of a financial debt provided under section 5 (8) (f) of the Code. It satisfies the requirement of being a financial creditor and that is what this Authority needs to consider - issue is answered in the affirmative. Whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and to invest money in Stocks and Securities. The Respondent Company was incorporated on 23.06.1955 under CIN: 26940AP1955PLC000546 with the object inter alia to produce, manufacture, process cements of all kinds and purchase or acquire property in India and abroad. The Respondent was the owner of certain properties situated at Bommannahalli and Hongasandra villages, in Begur Hobli, Bangalore South Taluk. It had approached M/s Salarpuria Properties (Private) Limited, for joint development of these properties aggregating 21 Acres and 22 Guntas in a phased manner and entered into an undertaking to that effect on 21.04.2005. Subsequent thereto Respondent and the said developer entered into a joint development agreement on 15.10.2005. Under the joint development agreement the owners i.e. the Respondent was entitled to 28% in the commercial development and 30% in the residential development of the saleable area, the terrace area, garden area with proportionate share in common areas and parking places. The remaining 72% of the commercial development and 70% of the residential development respectively would belong to the developers. Later, the Respondent and the said developer entered int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p Hazra Pamela Banerjee (assignees of the Petitioner) under absolute sale deed, dated, 29th May, 2018, for ₹ 1,51,03,524/- (Rupees One Crore Fifty One Lakh Three Thousand Five Hundred Twenty Four only). Two others were agreed to be respectively sold to Mr. Nitesh Sharma Mrs. Garima Jain and Mr. M. N. Vijayakumar and Mrs. Jayashree under separate assignment agreements, dated 29.06.2018 and 07.07.2018, to which the Respondent was a party. As per the assignment agreements, dated 29.06.2018 and 07.07.2018, the Respondent was obliged to execute the sale deeds in favour of the respective assignees of the Petitioner. 3. The Respondent did not honour such agreements. That constituted default on the part of the Respondent. Further the Respondent as per the agreement, dated 15.03.2007, was to deliver 10 (ten) flats/apartments. In fact it delivered only 8 (eight) under allotment letter, dated 26.12.2017, despite receipt of the full consideration amount. Such action would also constitute a default in payment of a financial debt. The Petitioner accordingly has claimed that the Respondent has defaulted in payment of financial debt of ₹ 1,91,00,000/-(One Crore Ninety One Lakhs) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid an advance payment of ₹ 55,00,000/- (Rupees Fifty Five Lakhs) and was to pay the balance of ₹ 1,97,50,000/- (Rupees One Crore Ninety Seven Lakhs Fifty Thousand only) on or before 15.03.2008. The Respondent agreed to deliver the built-up area to the Petitioner on or before 14.09.2009, subject to contingencies mentioned in clause 15 of the agreement. Between the date of agreement (15.03.2007) and 14.03.2008, the Petitioner, including the advance, paid an amount of ₹ 1,61,00,000/- (Rupees One Crore Sixty One Lakhs only). The Petitioner also paid an amount of ₹ 30,00,000/- (Rupees Thirty Lakhs) between 05.04.2008 and 21.05.2008. It did not make any further payment in accordance with the terms of the agreement. It rather requested the Respondent to return the amount paid. The Respondent accordingly paid back an amount of ₹ 65,00,000/- (Rupees Sixty Five Lakhs) between 08.08.2010 and 05.12.2011. As on 05.12.2011, an amount of ₹ 1,26,00,000/- (Rupees One Crore Twenty Six Lakhs only) remained with the Respondent. The assertion of refund of ₹ 65 lakh towards liquidated damages is falsified by the ledger copies for years ending 31.03.2018, filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 2 (zn) of the said Act provides that it would mean the development of a building or a building consisting of apartments, or converting an existing building or a part thereof into apartments, or the development of land into plots or apartments, as the case maybe, for the purpose of selling all or some of the said apartments or plots or buildings, as the case maybe, and includes the common areas, the development works, all improvements and structures thereon and all easement, rights and appurtenances belonging thereto. In 2005, the Respondent had entered into an agreement with M/s Salarpuria Properties (Private) Limited for construction of residential apartments over its properties. It subsequently entered into an agreement on 15.03.2007, with the Petitioner for allotment of 10 flats/apartments in the developed project. Accordingly the development so carried out would come within the definition of Real Estate Project indicted above. The Petitioner would thus be an allottee in respect of 10 (ten) apartments the Respondent had agreed to sell. The amount raised for the forward sale would accordingly come within the definition of a financial debt provided under section 5 (8) (f) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18 and 29.05.2018. Admittedly allotment of eight flats was made on 26.12.2017. Despite these developments the Petitioner did not make payment of the entire balance amount within one year. However, it only paid ₹ 1,91,00,000/- including the advance. The Petitioner having not paid the full amount as agreed under the agreement, dated 15.03.2007, could not expect the Respondent to execute and deliver possession of all the flats agreed thereunder. In view of the non-payment of the agreed balance amount the Respondent under letter, dated 18.07.2018, recalled the allotment letter, dated 26.12.2017, and terminated the agreement, dated 15.03.2007. The Petitioner having not adhered to the terms of the agreement cannot claim that the Respondent owed a financial debt to it and squarely was in default in payment of the debt. 9. The Hon'ble Supreme Court in Innoventive Industries Ltd. v. ICICI Bank Ltd. [2017] 143 SCL 625, have observed that in the case of Corporate Debtor committing a default of financial debt the Adjudicating Authority has merely to see the evidence produced by the Financial Creditor to satisfy itself that a default has occurred. In the instant case as already ind ..... X X X X Extracts X X X X X X X X Extracts X X X X
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