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TMI Blog2019 (9) TMI 1570X X X X Extracts X X X X X X X X Extracts X X X X ..... Explanation to Section 5(8) (f) of the Code with effect from 06.06.2018. Therefore, petitioner being a financial creditor 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. The Corporate Debtor has committed default in repayment of the outstanding financial debt which exceeds the statutory limit of rupees One Lakh. Thus, the application warrants admission as it is complete in all respects. This Bench orders restoration of the name of the Corporate Debtor Company in the Register of RoC - Application admitted - moratorium declared. - (IB)-1075(ND)2019 - - - Dated:- 17-9-2019 - INA MALHOTRA, MEMBER (J) AND L.N. GUPTA, MEMBER (T) ORDER L.N. Gupta, Member (T) 1. Mrs. Sunita Agarwal claiming to be a 'Financial Creditor' has filed this application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (for brevity 'the Code') read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (for brevity 'the Rules') with a prayer for initiation of Corporate Insolvency Resolution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... porate Debtor vide their Receipt 0492 dated 13.07.2015. 5. Subsequently, the financial creditor executed a Memorandum of Understanding on 28.07.2015 with the Corporate Debtor for the said apartment for a total sale consideration of ₹ 25,00,000. The Petitioner has made payment of ₹ 25,00,000 on 08.07.2015. 6. That as per the Clause 2(c) of the Memorandum, of Understanding, the Corporate Debtor Company has agreed to give return of 25% per annum at the end of the 24 months or at the issuance of Final LTC by the competent authority (whichever is earlier) from the date of receipt of (10% Booking Amount and Second Demand of 10%) Investment from the Applicant. 7. That the Financial Creditor had made following averments in their petition : H. That thereafter, the financial Creditor met the representatives of the corporate Debtor and enquired about the progress of the construction work of the project and the financial creditor was informed that the construction would begin in sometime but the same turned out to be hoax. Whenever the financial creditor enquired, a vague and evasive reply was given to her. I. That the financial creditor has been constantly foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18. In view of the revised definition at Clause 8(f), any amount raised from an allottee under a real estate project is deemed to be an amount having the commercial effect of a borrowing and thus, is covered by the definition of 'Financial Debt' under the Code. Definition of 'Financial Debt' has been amended to specifically include dues of home buyers i.e. Real Estate (Residential). The amendment also recognizes home buyers as Financial Creditor . Accordingly, the home buyers can initiate Corporate Insolvency Resolution Process against defaulting builder or developer, as Financial Creditor in terms of Explanation to Section 5(8) (f) of the Code with effect from 06.06.2018. 11. Therefore, petitioner being a financial creditor 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. 12. As per the material placed on record, it is confirmed that the applicant - financial creditor had disbursed the money to the respondent - Corporate Debtor as consideration for purchase of a residential apartment. Though, a considerably long period has lapsed, even t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16. In pursuance of Section 13(2) of the Code, we direct the Interim Insolvency Resolution Professional to make a 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. 17. 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 respect of its prope ..... X X X X Extracts X X X X X X X X Extracts X X X X
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