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TMI Blog2021 (4) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... t liberty granted to the Petitioner is to invoke any other remedy available under any Law , do not mean to invoke provisions of the Code again by changing Section. Since the judgment has become final, the Petitioner is estopped from invoking the provisions of the Code for the same set of facts. There is no correlation to various documents filed by the Parties with reference to the debt and default in question, and unless debt and default in question prima facie proved/established, CIRP cannot be initiated. There are no legally valid agreements produced in support of case of Petitioner, only one letter dated 10th April, 2014 started cause of action. And the Petitioner has not produced any legally valid agreement/contract executed between the Parties except by way of mere exchanging letters. Therefore, disputed question of fact and law on letters exchanged cannot be adjudicated in summary proceedings as contemplated under the provisions of Code, to decide question of debt and default. It is also not in dispute that the Petitioner has initiated suit before the Commercial Court, Bangalore, by way of Pre Institution Mediation in PIM No. 244/2019. Report has been issued by Bengalur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Corporate Debtor Expat Projects has arisen in terms of Guarantee guaranteeing to fulfill all obligations of Expat Bangalore in terms of above letters. (3) Expat Bangalore and Expat Projects had approached the Applicant, requesting him to invest in a project known as Expat Central - The Hub now known as Expat Navata at Chandapura, proposed to be developed by Expat Bangalore. It was represented by the Respondent that Expat Bangalore/Expat Group is the owner of about 26 acres of land in Chandapura and had envisaged a project in 67 acres of land into apartment complexes, and that it would develop the land into apartments of several units. The Corporate Debtor inter alia assured that the project master plans would be available by June, 2014 and project launch is scheduled for January 2015 and possession of the investor flats would be handed over by December 2016. Based on the representations, the Applicant agreed to invest into the project towards the purchase of total of fifty-six apartments in the project with an option to exit in the event of delay or default by Expat-Group. The said booking confirmation/letter provides, that, in case, the Expat Bangalore fails to meet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re. In view of the same, the Respondent agreed to stand as Guarantor for Expat Bangalore, in respect of the Project and for repayment of the amounts to the Applicant, in the event of there being delay/default, as per the terms of the Agreement. The Corporate Debtor defaulted as the development was delayed and to this day, the project has not commenced. In terms of Clause 21(a) of booking confirmation/letter, notice of exit from the project was issued by the Applicant on 24.10.2016, the receipt has been acknowledged. In view of the same, principal liability to pay the amounts along with interest originally arose on 24.11.2016; i.e., within 30 days from receiving notice of the exit, in terms of Clause 18 of the Agreement dated 10.04.2014. On the said date, total amount payable to Applicant was ₹ 10,96,30,253/-. (7) Subsequently, in pursuant to mutual discussions and the payment schedule shared by Expat Bangalore and the Respondent, it was agreed that a total amount ₹ 11,72,29,534/- would be repaid by the Respondent and/or Expat Bangalore to the Applicant in instalments between January and August 2017. Subsequently, the payment schedule was extended till not later tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r being categorised as a Home Buyer or an Investor, it is clear that the amount disbursed by the Petitioner was against the consideration of the time value and money and did have a commercial effect of borrowing in the hands of the Corporate Debtor . It further added that the order will not come in the way of the Applicant to invoke any other remedy available under any law. (10) Under Guarantee dated 20.06.2016 executed by the Respondent, the Respondent had irrevocably guaranteed the full performance by Expat Bangalore of its obligations under the Booking Confirmation Letter and had undertaken to indemnify the Applicant immediately upon demand without deduction for all losses, expenses and liabilities. Further, the Respondent had expressly stated that the liability of the Respondent under the Guarantee shall be primary Obligor and in no way conditional upon Applicant first proceeding against Expat Bangalore. 3. The Respondent has filed its statement of objections dated 20.02.2020 by inter alia contending as follows: (1) There are pre-existing disputes with another Company in respect of the claim made against this Respondent. Further, the Petitioner has initiated a suit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Management Services Co. WLL by the Petitioner. The receipts issued reflects as under: Sawraj Kumar Director M/s. Maritime Management Services Co. WLL Therefore, it constitutes sufficient proof that the transactions were made by the Petitioner on behalf of the M/s. Maritime Management Services Co. WLL, which has been now disputed by the Petitioner for reasons best known to him and these Insolvency proceeding has been initiated by the Petitioner fraudulently, and with malicious intention to coerce the Respondent and extort money. (4) Since the Petitioner claims to be a Flat buyer, the proceedings are not maintainable in the light of the principles laid down by the Hon'ble Apex Court in Pioneer Urban Land and Infrastructure Limited Anr. Vs. Union of India Ors. wherein it is inter alia held allottee, who has knocked at the doors of the NCLT as a speculative investor and not a person who is genuinely interested in purchasing a flat/apartment and taking possession and merely seeking refund shall not be entitled to any remedy under this Code. (5) The Respondent is a Company engaged in the business of Realty and has over years build a brand and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it for the Applicant in case of the Respondent failing to develop as per agreed timelines and on such exit, the Respondent was obligated to return the amounts paid by the Applicant together with interest and payment schedule shared with the Applicant at Document No. 19 provides for a scheme for the return of money to the Applicant and undeniably provides for interest to be payable at the rate of 12% on the principle amount. (3) The Guarantee executed on 20.06.2016, the last payment was made on 24.04.2017, the guarantee was invoked on 16.11.2017 and the instant Application was filed on 13.11.2019/15.11.2019 and thus Application is not time barred. 5. Heard Ms. Bhargavi Devi, learned Counsel for the Petitioner, and Mr. Uday Shankar R., learned Counsel for the Respondent, through Video Conference. We have carefully perused the pleadings of the Parties and the extant provisions of the Code, the Rules made there under, and the Law on the issue as cited and relied upon by the Parties. 6. Ms. Bhargavi Devi, learned Counsel for the Petitioner, while reiterating elaborate averments made in the Petition, as briefly stated supra, has also filed her written arguments dated 14.08.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roperties India Pvt. Ltd., Expat Projects and Development Pvt. Ltd. and M/s. Maritime Management Services Co. The Petition is liable to be dismissed on the ground of vagueness. Since the so-called Agreement needs to be proved in trial before the trial court as it is a booking letter dated 10.04.2014 and 05.02.2015 and the same letter has been executed between Expat Properties India Ltd. and M/s. Maritime Management Services Co. W.L.L. and Expat Projects Development Pvt. Ltd. and M/s. Maritime Management Services Co, on the same subject matter leading to a doubt as to which document is genuine. (2) The Respondent is not the corporate guarantor under Section 5-A of Code. A valid Guarantee Agreement is a Tripartite Agreement and as per Sec. 126 of Indian Contract Act, 1872, there needs to be existence of Principal Debtor, Creditor and a Guarantor. The letter at Document No. 17 has been obtained via misrepresentation and fraud. The similar nature of two agreements has been executed by and between M/s. Maritime Management Services Co. WLL and Expat Properties India Pvt. Ltd. Expat Projects and Development Pvt. Ltd. via email dated 10.04.2014 and 05.02.2015. (3) The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... flat without any transfer fee levied by the builder. The Purchaser has the option to use Expat services for transfer/registration formalities at an agreed fee. 23. Formal Agreement of Sale will be executed once approvals come through. This document will govern the sale transaction detailed herein till a formal agreement is carried out. Therefore, it is relevant to point out here that Clause 21(b), 22 23 above would be ultimate cause of action for the Petitioner to invoke. However, terms and conditions are being changed and parties also changed in furtherance of original transaction by creating confusion about ultimate terms and conditions to govern the parties. 9. Subsequently, Addendum dated 05.02.2015 to the said letter was issued by further clarifying the terms and conditions mentioned earlier. Subsequently, by another letter dated 17.08.2015, booking of 56 units in Expat Central - The Hub, was confirmed, which consists of 28 one BHK, 14 two BHK and 14 two and a half BHK. The Respondent has further issued a letter dated 20.06.2016 in consonance with the Agreement/Letter dated 10.04.2014 read with Addendum dated 05.02.2015, by inter alia guaranteeing the Petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any other remedy available under any Law , do not mean to invoke provisions of the Code again by changing Section. Since the judgment has become final, the Petitioner is estopped from invoking the provisions of the Code for the same set of facts. 12. In terms of letter dated 10.04.2014 and 05.02.2015 and other connected letters, it is clear that the Applicant invested money for purchase of Flats in question. Clause 21(b) of letter dated 10.04.2014 confers rights to the Purchaser (Petitioner herein) to exercise lien mutually agreed asset of Expat properties having a value equivalent to that of the full amount paid by Purchaser along with 12% compounded interest. Expat would allot a property/asset that is mutually agreeable to both parties and is easily marketable. Formal Agreement of Sale will be executed once approvals come through. This document will govern the sale transaction detailed herein till a formal sale agreement is carried out. Therefore, the original letter confers right only to exercise lien on the property but not to recover the money, which are subsequently alleged to have been agreed upon by the Parties. There are so many differences in the booking of the Fla ..... X X X X Extracts X X X X X X X X Extracts X X X X
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