9911796707
TMI Blog2021 (11) TMI 608X X X X Extracts X X X X X X X X Extracts X X X X ..... ed since the Corporate Debtor has not paid the Assured Investment return from January 2019. The application stands admitted in terms of Section 7 of IBC, 2016 - Moratorium declared. - Company Petition No. IB 889/ND/2020 - - - Dated:- 28-10-2021 - Dr. Deepti Mukesh Member (J) And Sumita Purkayastha, Member (T) For the Appellant : Piyush Singh and Aditi Sinha, Advocates For the Respondents : Vivek Kohli, Sr. Adv., Sandeep Bhuraria, Aman Anand and Monish Surendran, Advs. ORDER Sumita Purkayastha, Member (T) 1. The present application is filed 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') jointly by 40 Financial Creditors (for brevity 'Applicants') in the project named as Spaze Corporate Parkk of corporate debtor, affidavits in support of this application have been filed, by each applicant, with a prayer to trigger Corporate Insolvency Resolution Process against SPAZE TOWERS PRIVATE LIMITED (for brevity 'Corporate Debtor'). 2. The Applicants states had purc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate Debtor informed the Financial Creditors that all the office spaces had been leased out to M/S OFCSPC Worldwide Private Limited (herein referred as the Lessee) in terms of the Lease deed dated 30.09.2019 at a rent of either ₹ 55/- per sq. ft. per month or at ₹ 65/- per sq. ft per month plus applicable taxes and TDS for a period of 9(3+3+3) year. The copy of the letter dated 11.10.2019 and Lease deed dated 30.09.2019 have been annexed- On perusal of the Lease Deed, it was found that the lease commencement date was agreed as 01.10.2019 however, the Financial Creditors were shocked to see that the rent commencement date was agreed as 01.04.2020 i.e. after 6 (six) months from lease commencement date. The arrangement was detrimental to the interest of the Financial Creditor because as per Clause 17 of the MoUs, the Corporate Debtor stood completely discharged and absolved of all responsibilities/obligations, including the liability of paying the investment return as and when the office spaces were leased. 6. The Applicants submit that the arbitrary terms agreed by the Corporate Debtor with the Lessee under the Lease Deed clearly shows a mala fide intention of the Corp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, which includes the Applicants herein. The terms enshrined in the said MoUs were mutually agreed between the parties. It is submitted that Clause 2 and 9 of all of the MoUs executed between the Corporate Debtor and the Applicants herein explicitly provided for the payment of an Investment return ( Assured Return ) which was payable from the respective dates prescribed in the MoUs, till the date of leasing out of the said unit to a tenant. Clause 2 of all of the MoUs are similar in nature except for the rate of Assured Return which amount to ₹ 55 or 65 per sq. ft per month, depending on the respective MoU. Clause 2 and 9 of one of the MoUs is reproduced below for the sake of convenience: Clause 2 That the First Party will give an Investment return at ₹ 55 per sq. ft. per month w.e.f. 01.01.2011, of the super area till such time the office space is leased out (subject to clause 7 9) on behalf of the Second Party by the First Party. Clause 9 That the First Party has guaranteed the Second Party an Investment return of ₹ 55 per. alt. per month towards the office spaces (super area basis) till the date the said unit/space is put on lease. 10. It is su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the calculation of Assured Return, till the date of leasing out of the said unit and a formula in case the unit is let out at a monthly rental rate differing from the minimum guaranteed rate provided in the Clause 9 of the MoU. The said clause of the MoU executed between the Corporate Debtor and Mrs. Pushp Lath Jain Applicants No. 28 is reproduced herein below for ready reference: Clause 9. That the First Party has guaranteed the Second Party an Investment return of ₹ 55/- per sq. ft per month towards the proposed office space (super area basis) till the date the said unit is put on lease. Upon completion of the Project, the space would be let out by the First Party to a bonafide lessee at a minimum rate rental of ₹ 55/- per sq. ft per month. The First Party in fulfillment of its above referred guarantee, hereby covenants with the Second Party that in the event the proposed office space is leased at a gross monthly rental of less than the investment return of ₹ 55/- per sq. ft. per month, then the First Party agrees that the sale consideration for the proposed office space shall stand reduced by the amount calculated by the formula given below (Assured mont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Applicants started raising arbitrary demands. It is submitted that the Applicants herein are liable to pay the balance dues arising out of the units allocated to the Applicants which is also reflected in the letters dated 11.10.2019, issued by the to the Applicants herein requesting them to release the outstanding amount of ₹ 1,83,86,483/-. The amount reflected in the aforesaid letters were duly computed after adjusting the amounts which were payable by the Corporate Debtor to the Applicants, and the security amount provided by OFCSPC Worldwide Private Limited. 15. Further, it is submitted by the Corporate Debtor that the current Application fails to reach even the minimum threshold limit of ₹ 1 Crore prescribed under Section 4 of the Code that is required to be satisfied for initiating the CIRP proceedings of a Corporate Debtor, as no amount is due and payable to the Applicants herein. Further, in reality, an amount to the tune of ₹ 1,83,86,483/- is actually due and payable by the Applicants to the Corporate Debtor. On bare perusal of the amendment dated 24.03.2020 it is apparent that any Application filed under Section 7 of the Code is required to be unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rbitration agreement contained therein, and hence, the Objector's request is rejected. The order dated 12.09.2020 dismissing the Impleadment application has been annexed. The Applicant has also filed W.P.(C) 523/2020 CM APPL 27448/2020 before the Hon'ble High Court of Delhi wherein the Applicant has filed a writ petition for classification of the Pinal Award dated 01/10/2020 of the Arbitral Tribunal as illegal and asking for directions to SFIO to undertake the investigation into the affairs of the Corporate Debtor. The copy of the Writ Petition has been annexed. 18. It is submitted by the Corporate Debtor that the possession of the units of the Applicants have been duly offered by the Corporate Debtor. That OFCSPC Worldwide Private Limited vide its email dated 11.10.2020 called upon the Corporate Debtor to take over the physical possession of the Demised Premises on 16.10.2020, Further the possession of the units of the Applicants have been offered vide letters dated 17.10.2020, during the pendency of the current proceedings. However, rather than taking the said possession, the Applicants herein are bent up in raising a sham claim for buttressing the Corporate Debtor to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, where the Occupation Certificates have been received and where possession can be immediately offered at the stage of considering the above NCLT proceeding, there is no question of default occurring within the meaning of the Code, and no question of any allottee hoping for another developer to takeover and complete the project in question as the Project is already complete. In the present case approx. 96 allottees have already taken possession, where the project is complete, Occupation Certificates have been obtained, and possession has already been offered, there is no question of an allottee losing faith in the management of the Corporate Debtor. In such situations, an application under Section 7 would not be maintainable, and it ought to be rejected at the very outset. 20. The Corporate Debtor submits that the Hon'ble Supreme Court in Pioneer Urban Land Infrastructure Ltd. Vs. Union of India (UOI) and Ors has also observed that a there can be situations when an allottee who has knocked at the doors of the National Company Law Tribunal is a speculative investor and not a person who is genuinely interested in purchasing a flat/apartment. In such a situation it is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the MoU. Hence, the sums would not fall within the definition of financial debt under the Code and the Applicants would not be entitled to receive this amount A bare perusal of the Application will show that the Applicants have also failed to adequately explain the basis for the calculation of their claims. In as much as the computation is essential for determining the claim of the Applicants, in the absence of the same, the form is bereft of material particulars and is liable to be rejected on this ground alone. 22. It is submitted by the Corporate Debtor that the Hon'ble Supreme Court in Pioneer Judgment has held that, in order to show that there has been a default for amount due and payable, an allottee must satisfy the Tribunal that the following have occurred. i. Real estate developer has failed to offer possession of the unit; and ii. The real estate developer has failed to offer compensation for the delayed period in terms of the buyer agreement; or iii. Amount claimed as other-wise become due and payable under the buyer agreement. Thus, The Corporate debtor submits that it is evident that no default has occurred In the Section 7 Application, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.2019 has tried to raise a demand against the Financial Creditors by giving a credit of the pending assured return from 01.05.2019 to 30.09.2019 and also giving a credit of the 3-months' security deposit. Also basis the unit wise Ledger Accounts as admitted by the Corporate Debtor, an amount of ₹ 1,49,403554/- is the total balance outstanding to be paid to the Financial Creditors. That the Corporate Debtor has wrongfully raised a demand in complete and violation of Clause II of the MoUs as these charges were to be paid from the date of execution of the conveyance I sale deed by the Corporate Debtor. It is an admitted fact that the Corporate Debtor had received the Occupation Certificate only on 28.01.2020 and offered possession of the units to the Financial Creditors only on 17.10.2020: moreover, the execution of the sale deed was offered by the Corporate Debtor on 24.11.2020. Therefore, there is no question of any amount which would fall due as on 11.10.2019 to be paid by the Financial Creditors to the Corporate Debtor and the credit of the assured returns due and the 3-months' security deposit was wrongly adjusted and never paid to the Financial Creditors. d. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank 1(2018) I SCC 4071, Pioneer Urban Land and Infrastructure Ltd. v. Union of India [ (2019) 8 SCC 416] it has been held as follows: Dispute or adjudication may be important for adjudication of Section 9 but not for Section 7 under the Code as has also been held in Innovative Industries Ltd. v. ICICI Bank 1(2018) I SCC 4071 . The relevant observations in this regard are as under: 27. The scheme of the Code is to ensure that when a default takes place in the sense that a debt becomes due and is not paid the insolvency resolution process begins. Default is defined in Section 3(12) in very wide terms as meaning non-payment of a debt once it becomes due and payable, which includes nonpayment of even part thereof or an installment amount For the meaning of debt , we have to go to Section 3(11), which in turn tells us that a debt means a liability of obligation in respect of a claim and for the meaning of claim , we have to go back to Section 3(6) which defines claim to mean a right to payment even if it is disputed. The Code gets triggered the moment default is of rupees one lakh or more (Section 4). The corporate insolvency resolution process may be triggered by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2019 and September 2019, which amounts to ₹ 4,72,95,975 and refund of 3-months' security deposit which is ₹ 4,44,34,965. The Default amount as per the section 7 application of the Petitioner's is 33,23,69,949/- which also includes amount as calculated as per Clause 9 of the MOU. Also, from January 2019 till date the Corporate Debtor has neither paid investment/assured return nor paid the guaranteed lease rent. 24. The Corporate Debtor filed their written submission dated 23.03.2021 and has placed the following submissions: a. The Corporate debtor has submitted that the Project is complete and the units of the Applicant have been delivered. The Corporate Debtor has annexed Occupation Certificate dated 28.01.2020, letters dated 17.10.2020 requesting the Applicants to take possession of their respective units and letters dated 24.11.2020 requesting the Applicants to come forward to execute conveyance deed of their respective units. Hence, it is apparent that the Units of the Applicants have been duly provided to them as per the MoUs. However, till date the Applicants have failed to come forward to take possession of their units and get the conveyance deed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 4,44,34,956/- which was provided by OFCSPC Worldwide Private Limited, raised a net demand of ₹ 1,83,86,483/- which is due and payable by such Applicants to the Corporate Debtor. The said adjustments were undertaken subsequent to the execution of the lease deed with OFCSPC i.e., 30.09.2019 which is a registered document wherein the stamp duty of ₹ 26,68,000/- has been paid which is not in dispute. Further, in para 8 of the Written Submissions of the Applicants, they have clearly agreed to the quantum of the charges that have been demand in the letters dated 11.10.2019 which was demanded after the constructive possession of the units of the Applicants were provided to the Applicants on 30.09.2019. The only dispute arises with respect to the timing of the raising of the said demand by the Corporate Debtor. The Corporate Debtor had Immediately upon receipt of the Final Award dated 01.10.2020, with respect to the arbitration proceedings with OFCSPC, issued letters for possession to all of the Applicants on 17.10.2020 and subsequently even requested the Applicants to get the conveyance deeds executed in their favor for their respective units vide letters dated 24.11. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d dated 01/10/2020 of the Arbitral Tribunal as illegal and asking for directions to SFIO to undertake the investigation into the affairs of the Corporate Debtor. g. The National Company law Appellate Tribunal in Navin Raheia Vs. Shills. Jain and Others Company Appeal (AT) (Insolvency) No. 864 of 2019 has held that a situation may rise wherein the allottee does not, in fact, want to go ahead with its obligation to take possession of the flat/apartment under RERA, but wants to jump ship and really get back, by way of this coercive measure, monies already paid by it. And thus would qualify as a speculative Investor. h. Further, the correctness of the information provided in the application field under Section 7 of the Code is absolutely essential for adjudicating an application requesting initiation of the CIRP proceedings qua a Corporate Debtor, The Hon'ble Appellate Tribunal in Shubha Sharma Vs. Mansi Brar and Mr. Company Appeal (AT) (Insolvency) No. 83 of 2020 while identifying a speculative investor and setting aside the Order which initiated the CIRP proceedings of a solvent company had observed that Incorrect information was provided in the application, inter alia, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents placed on record. It is observed that the Claim of the Financial Creditor in the present application arises out of the MoUs executed in 2010-2012, with respect to Assured Monthly investment return to be received from the Corporate Debtor and the monthly rent received by the Corporate Debtor and paid to the Financial Creditor for their respective office space unit leased to OFCSPC Worldwide Pvt. Ltd. As per the averments mentioned by the Financial Creditor the default has occurred since the Corporate Debtor has not paid the Assured Investment return from January 2019. 1. On perusal of the documents it has been observed that the Corporate Debtor has not placed on record the bank statement reflecting the payment of Assured monthly investment returns (since January 2019) paid to the respective financial creditors or any other document to evince the genuineness of the fact that the payment has been received by the Applicant. Further while perusing the lease deed dated 30.09.2019 entered between the Corporate Debtor and OFCSPC Worldwide Pvt. Ltd., it has been observed that the lease commencement date was agreed as on 01.10.2019 however, the rent commencement date was agreed as o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of the moratorium period, terms of Section 14(2) to 14(3) of the Code shall come in force. 31. We direct the applicant to deposit a sum of ₹ 2 lacs with the Interim Resolution Professional namely Mr. Gaurav Katiyar to meet out the expense to perform the functions assigned to him in accordance with regulation 6 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Person) Regulations, 2016. The needful shall be done within three days for the date of receipt of this order by the applicant. The amount however is subject to adjustment by the Committee of Creditors as accounted for by Interim Resolution Professional and shall be paid back to the applicant. 32. In terms of above order, the application stands admitted in terms of Section 7 of IBC, 2016. A copy of the order shall be communicated to the applicants as well as to the Corporate Debtor above named by the Registry. Applicants are also directed to provide a copy of the complete paper book with copy of this order to the IRP. In addition, a copy of the order shall also be forwarded to IBBI for its records and to ROC for updating the master data. ROC shall send compliance report to th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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