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TMI Blog2021 (1) TMI 935X X X X Extracts X X X X X X X X Extracts X X X X ..... that a 'financial debt' is a debt along with interest which is disbursed against the consideration for the time value of money and may include any of the events enumerated in sub-clause (a) to (i). Therefore, this Tribunal is to see whether the amount paid by the Applicants to the Corporate Debtor, fulfil the other condition of disbursement against consideration of time value and money , in order to come within the definition of Financial Creditor. There is a 'Financial Debt' as defined in Section 3(11) of IBC; there is a default within the meaning of Section 3(12) of IBC. Therefore, the application filed by the Financial Creditors is complete in all respects as required by the law. Therefore, the default stands established and there is no reason to deny the admission of the application. Hence, this Adjudicating Authority Admits this Petition and orders initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor - Application admitted - moratorium declared. - IBA/17/KOB/19 - - - Dated:- 9-10-2020 - Ashok Kumar Borah, Judicial Member For the Applicant : Ms. Anagha Mhatre For the Respondent : Pradeep Joy, Adv. OR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said Agreement, the Corporate Debtor agreed to pay the Financial Creditors 1/6th of the rental pool income. As per clause 5.2 of the schedule of the said Agreement, the Corporate Debtor undertook that if the rental pool income of an accounting year is less than 9% of the total consideration, the Corporate Debtor shall pay 9% of the total consideration as a rental pool income for the initial four years. 4. It is further stated that despite the abovementioned investment made by the Financial Creditors, the Corporate Debtor has failed to give possession of the said purchase suite, and have therefore, miserably failed to Comply with the contractual, legal and moral obligations as per the said agreement. Moreover, the Corporate Debtor has failed to construct the said Resort. The learned counsel for the Financial Creditors stated that the Corporate Debtor has made commitments to the Financial Creditors to clear the outstanding payments but till date they have not adhered to the said commitments without any just and appropriate reason. 5. The Financial Creditor further argued that the petition is complete in all respects and the debt due from the Corporate Debtor is a Financia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nancial Creditors as an allottee based on the Agreement dated 17-8-2015. Before commencement of the Insolvency and Bankruptcy Code (Amendment) Act, 2020 ( l B Amendment 2020 ) any such application of Financial Creditors who are allottees under a real estate project, an application for initiating Corporate Insolvency Resolution Process against the Corporate Debtor shall be filed jointly by not less than one hundred of such allottees under the same real estate project or not less than ten percent. of the total number of such allottees under the same real estate project, whichever is less. b. It is also evident that there is no financial debt, and hence there arises no question of default by the Corporate Debtor. Interest was assured on the amount in question, but there is no evidence to show that there is time value of money and thus the claim made by the Financial Creditors is not maintainable under section 7 of the Code. It is also stated that there is no agreed interest rate or time value of money which is required for terming a debt/obligation (if any) as a Financial Debt under the provisions of the Code. Without the debt being a Financial Debt, the present Application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplied to condone the delay in filing such application . 12. Respectfully following the above decision, this Bench is of the view that the provisions of Limitation Act applies to the application filed under section 7 and 9 of the Code, but it is necessary to verify whether this applies to the Application in hand. As per the contention of the Financial Creditors, the date of default was 31-6-2016 and that it is evident that the Code came into force only on 1-12-2016 and the application is time barred after completion of 1-12-2019. However, the Hon'ble Supreme Court in the case of Innovative Industries Ltd. v. ICICI Bank Ltd. [2017] 143 SCL 625, held as under: 30. .in the case of a corporate debtor who commits a default of a financial debt, the adjudicating authority has merely to see the records of the information utility or other evidence produced by the financial creditor to satisfy itself that a default has occurred. It is of no matter that the debt is disputed so long as the debt is due i.e. payable unless interdicted by some law or has not yet become due in the sense that it is payable at some future date. It is only when this is proved to the satisfaction o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , somehow or other, to gain time and avert pressure and falls within the meaning of Section 18 of the Limitation Act, 1963. Therefore, this Tribunal holds that the Application filed by the Financial Creditor is within the limitation period. 15. Now the question comes as to whether the Applicants are 'Financial Creditors' and the debt due is a 'Financial Debt'. In this connection, it is to verify whether the amount disbursed by the Financial Creditor comes within the meaning of 'financial debt' having disbursed against the consideration for time value of money. Section 5(8) of the 'I B Code' defines 'financial debt', which reads as follows: 5. Definitions. - (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 l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 1/6th of the rental pool income generated for the accounting year. It is stated that as per clause 5(2) of the agreement, the Corporate Debtor also agreed that if the Rental Pool Income for an accounting year is less than 9% of the total consideration paid by the Purchaser under the agreement, the Corporate Debtor shall pay 9% of the total consideration paid by the Financial creditors under the Agreement as Rental Pool Income for the initial four years, irrespective of the actual Rental Pool income and this will be calculated only during last quarter of the Accounting Year. At the end of five years, the Corporate Debtor undertakes to buy back the fraction at 140% of the original sale price. This can be termed as an element of 'time value of money', particularly, when one of the conditions related to sharing the revenue from the renting of the said Suite as per clause 3 of the Agreement. Therefore, this Tribunal holds that the amount paid by Mrs. Urvashi Dilip Kamath and Mr. Dilip Gopal Kamath comes within the meaning of 'Financial Debt', as the Corporate Debtor raised the amount through a transaction of agreement having commercial effect of a borrowing (Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the above, during the period of moratorium, the following are also to be strictly followed:- (i) The supply of essential goods or services to the Corporate Debtor, if continuing, shall not be terminated or suspended or interrupted during the moratorium period; (ii) That the provisions of sub-section (1) of section 14 of the IBC shall not apply to such transactions as may be notified by the Central Government in consultation with any sectoral regulator; (d) The moratorium shall have effect from the date of this order till the completion of the CIRP or until this Tribunal approves the Resolution Plan under sub-section (1) of section 31 of the IBC or passes an order for Liquidation of Corporate Debtor under section 33 of the IBC, as the case may be. (e) Public announcement of the CIRP shall be made immediately as specified under section 13 of the IBC read with Regulation 6 of the Insolvency Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. (f) This Tribunal appoints Mr. K T Mathew, holding Registration No. IBBI/IPA-001/IP-P-01522/2019 -2020/12464, residing at Kuruvanthanathu, Kolani P.O., Thodupuzha, Kerala-685608, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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