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TMI Blog2021 (8) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority on the ground that the Corporate Debtor failed to make payment of a sum of INR. 30,36,344/- (Indian Rupees Thirty Lakh Thirty-Six Thousand Three Hundred and Thirty-Four only). The total principal amount includes INR 19,03,188/- (Indian Rupees Nineteen Lakh Three Thousand One Hundred Eighty-Eight only) and INR 68,990 (Indian Rupees Sixty-Eight Thousand Nine Hundred and Ninety Only). Interest on the principal amount and tax @ 15% as per the terms and conditions of the Agreement. INR 10,64,166/- (Indian Rupees Ten Lakh Sixty-Four Thousand One Hundred and Sixty-Six only). Submissions of the Financial Creditor a. The Financial Creditor has filed the present petitioner under Section 7 of the Code in relation to defaults committed by the Corporate Debtor in repayment of investment made in the Corporate Debtor as per the Investment Agreement dated 25.06.2016. b. In the year 2016, on the basis of the representation and assurance given by the Corporate Debtor, the Financial Creditor evinced interest in the project layout proposed to construct by the Corporate Debtor at New Link Road, Goregaon (West), Mumbai- 400104 to be known as "The Lion Park". Accordingly, the agreement date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spite acknowledging the it's liability, the Corporate Debtor has failed, evaded and ignored for reasons best known to the corporate Debtor, to re-pay the said payment along with interest admittedly payable to the Financial Creditor. j. However, the Corporate Debtor has miserably failed to repay the admitted and acknowledged liability. This clearly evidence the Corporate Debtor's inability to pay the amounts due to the Financial Creditor amount to a Financial Debt as defined under Section 5(8) of the IBC, 2016. Submissions of the Corporate Debtor a. The Corporate Debtor submitted in this reply that a sum of Rs. 19,03,188/- is the amount due and payable by the Corporate Debtor to them, as the said amount has been paid by the applicants for the purpose of purchasing a Flat being Flat No. 1907, 19th Floor, in 'B' Wing having a carpet area of 621 sq. ft. in the property known as Lion Park, New link Road, Goregaon (West), Mumbai 400104. b. Firstly, it is submitted that the present petition pertains to refund of money in a Real Estate project which squarely falls within the scope and ambit of the Real Estate Regulation Act, 2016 ("RERA"). The said statute has been created for the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucted within a period of 18 months plus 6 months grace. The Applicant/Financial Creditor claimed that he is not a homebuyer but an Investor in this project because of Para 10 of the agreement only. However, the bench notes that this agreement is actually an agreement between a homebuyer Mrs. Rajshree Vora and Ms. Prachi Bora in the "Lion Park" Project in Goregaon (West) for the purchase of a Flat No. 1907 on the 19th floor, B Wings Tower. The Bench further notes that the payment schedule of money which is mentioned in the agreement is a typical homebuyer Agreement where the schedule of payment is dependent of the level of construction. In this regard the payment schedule as mentioned at Para 3 of the agreement is as under: "...in consideration of the total investment for reserving the said area, you shall pay to us a Total Lump Sum Consideration of Rs. 95,15,940/- (Rupees Ninety Five Lac Fifteen Thousand Nine Hundred Forty only) plus service tax, VAT & any other taxes as per Government regulation out of which we have received Rs. 19,03,188/- (Rupees Nineteen Lac Three Thousand One Hundred Eighthly Eight only) and balance is to be paid by you as per schedule. You shall also bear t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e commercial effect of a borrowing; Explanation. -For the purposes of this sub-clause, - (i) any amount raised from an allottee under a real estate project shall be deemed to be an amount having the commercial effect of a borrowing; and (ii) the expressions, "allottee" and "real estate project" shall have the meanings respectively assigned to them in clauses (d) and (zn) of section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016); 6. Therefore, an allottee in a real estate project is a Financial Creditor. However, under Section 7 for the purposes of initiation of CIRP there is a threshold limit with regard to number of allottee who can jointly file petition to initiate CIRP against the Corporate Debtor. Section 7 in this regard reads as under: Section-7. (1) A financial creditor either by itself or jointly with other financial creditors may file an application for initiating corporate insolvency resolution process against a corporate debtor before the Adjudicating Authority when a default has occurred. Explanation: For the purposes of this sub-section, a default includes a default in respect of a financial debt owed not only to the applicant fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under: "In section 7 of the principal Act, in sub-section (1), before the Explanation, the following provisos shall be inserted, namely:- "Provided that for the financial creditors, referred to in clauses (a) and (b) of sub-section (6A) of section 21, an application for initiating corporate insolvency resolution process against the corporate debtor shall be filed jointly by not less than one hundred of such creditors in the same class or not less than ten per cent. of the total number of such creditors in the same class, whichever is less: Provided further that for 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 per cent. of the total number of such allottees under the same real estate project, whichever is less: Provided also that where an application for initiating the corporate insolvency resolution process against a corporate debtor has been filed by a financial creditor referred to in the first and second provisos and has not been ..... 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