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TMI Blog2021 (8) TMI 1155X X X X Extracts X X X X X X X X Extracts X X X X ..... ated against the Corporate Debtor vide order dated 01.08.2018 passed in IB 470/ND/2017 and Mr. Yogesh Kumar Tyagi was appointed as Interim Resolution Professional of the Corporate Debtor. Subsequently, Mr. Kashi Viswanathan Sivaraman was appointed as Resolution Professional (RP). ii. That it is further contended that the Applicant has provided various legal and allied services to the Corporate Debtor for the period 01.04.2014-31.03.2018 based upon the Retainership Agreement dated 23.03.2014 ("Agreement") with effect from 01.04.2014, executed between the Corporate Debtor and Applicant, and the amount agreed for the Retainership under the agreement for a period of each Six Months was Rs. 75,00,000/-. Thereafter, consolidated invoices dated 03.10.2017 to the extent of Rs. 5,25,00,000/- for the period from 01.04.2014-30.09.2017 were raised by the Applicant upon the Corporate Debtor. iii. That it is further contended that the corporate vide letter dated 13.10.2017 requested to reduce the retainership amount to Rs. 60,00,000/- per six months instead of Rs. 75,00,000, which was duly accepted by the Applicant. Accordingly, a fresh consolidated invoice of an amount of Rs. 4,20,00,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the following paragraph: "5. That on account of failure to make the payment towards the legally outstanding debt, the corporate debtor entered into a memorandum of understanding dated 19th April 2018 with the applicant wherein the corporate debtor allotted 20 units to the applicant in lieu of the outstanding debt along with immediate possession and accordingly executed Apartment Buyer Agreements (the "ABAs") for each such unit. Therefore, in terms of the ABAs read with the MOU dated 19th April 2018, the applicant became an allottee within the meaning of section 5(8)(f) of the Insolvency and Bankruptcy Code, 2016 ("IB Code"). However, since the definition of an allottee was a bit unclear when an allottee was included within the definition of a financial creditor as well as by way of an inadvertent error, the applicant mistakenly preferred a Form B instead of Form CA under the Insolvency and Bankruptcy Board Of India (Insolvency Resolution Process For Corporate Persons) Regulations, 2016 (the "IBBI Regulations"). It would be trite to mention that the RP has not verified the claims till date, let alone pointing out the usage of wrong Form. Moreover, meanwhile, the honorable Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t get invalidated merely because of subsequent amendment. The proviso to Section 5(12) as amended thereafter is reiterated as under: "Provided that where the interim resolution professional is not appointed in the order admitting application under section 7, 9 or section 10, the insolvency commencement date shall be the date on which such interim resolution professional is appointed by the Adjudicating Authority;" As on the date of the Order dated 30.07.2018, the said proviso was applicable, therefore, the Insolvency Commencement date would be when the IRP was appointed in the instant case i.e. 30.07.2018 in terms of the proviso. iv. That it is further contended that Section 17 of IBC is abundantly clear that it is only on the date of the appointment of IRP that the Board of Directors stand suspended and the management would vest in the IRP. It cannot be the case that the Board of Directors would be suspended prior to the appointment of IRP. In such circumstances, the MOU dated 19.04.2018 entered prior to such appointment is valid in law. That moreover, the RP being bound by such contracts cannot unilaterally choose to not accept the claims based on the same. 4. The facts me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... follows: 5(12) "insolvency commencement date" means the date of admission of an application for initiating corporate insolvency resolution process by the Adjudicating Authority under sections 7, 9 or section 10, as the case may be; vii. That Section 14 of the Code states as follows: 14(1) Subject to provisions of sub-sections (2) and (3), on the insolvency commencement date, the Adjudicating Authority shall by order declare moratorium for prohibiting all of the following, namely:- (a)................................. (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........................ viii. The Hon'ble Supreme Court of India in "P. Mohanraj and Ors. Vs. Shad Brothers Ispat Pvt. Ltd. - AIR 2021 SC 1308" held that: "A cursory look at Section 14(1) makes it clear that subject to the exceptions contained in sub-sections (2) and (3), on the insolvency commencement date, the Adjudicating Authority shall mandatorily, by order, declare a moratorium to prohibit what follows in clauses (a) to (d). Importantly, under sub-section (4), this order of moratorium d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is the reason, the applicant has filed this application seeking amendment in the earlier application filed by the applicant referred to above. 11. The objection of the RP is that the MoU between Applicant and Mr. Paramjit Gandhi was executed on 19.04.2018, whereas the application for initiation of CIRP was admitted on 09.03.2018 and on this ground, the Ld. Counsel for RP contended that the MoU was entered during the pendency of the moratorium period. 12. In reply, the contention of the applicant is that, as per the public announcement made by the RP, the date of commencement of the insolvency was 22.06.2018 i.e. date of receipt of order by the RP and in support of this, the applicant has also placed reliance upon order dated 30.07.2018 passed by this Bench, by which the IRP was changed. 13. In view of the claim and counter-claim made by the parties in support of their contention, at this juncture, we would like to refer to the order dated 30.07.2018 passed by this Adjudicating Authority which is also enclosed by the applicant (at page 5 of the written submissions) and the scanned copy of same is reproduced below:- 14. A bare perusal of the order shows that, though the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we consider the Section 5(8) of IBC, 2016 and the relevant portion of definition of "financial debt" given in Section 5(8) of IBC, which is quoted below:- 5(8) "financial debt" means a debt alongwith interest, if any, which is disbursed against the consideration for the time value of money and includes-- (a)..................... (b)..................... (c).................... (d)..................... (e)...................... (f) any amount raised under any other transaction, including any forward sale or purchase agreement, having the commercial effect of a borrowing; 2[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);] (g)................... (h)...................... (i)........................ 24. A bare perusal of the aforesaid provision shows that there is no "if and but" regarding t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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