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TMI Blog2024 (4) TMI 238X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Appellant / Petitioner, takes a stand that in the Order dated 09.05.2022 of the National Consumer Disputes Redressal Commission (vide Consumer Complaint No. 1951 of 2016), the plea of the Respondent / Corporate Debtor ascribing reasons, in regard to the delay, relating to the time, when the Respondent / Corporate Debtor, accepted the bookings from the Allottees, and regularly raised demands and accepted amounts, from the Allottees, were rejected, a clear adverse circumstance, against the Respondent / Corporate Debtor, all the more, when the outbreak of Pandemic Covid-19, came after a decade. The emphatic stand of the Respondent / Corporate Debtor is that Sushant Megapolis Township, comprise of Multiple Commercial Real Estate Projects, all the sub-projects are independent of each other, and were being developed and sold as separate Projects, within the Township. Moreover, they were Registered, under RERA Act, 2016, with different RERA Registration Numbers. As a matter of fact, each Project, is further divided into Multiple phases, with different complete Schedules - Indeed, as per definition Section 5(8)(f) explanation (ii) of the I B Code, 2016, the expressions allottee and r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Regulation Development) Act, 2016 (16 of 2016), with a view to fulfil the requirement of 10% or 100 Allottees , as envisaged, as per Section 7 (1) of the I B Code, 2016. This Tribunal, on a careful consideration of divergent contentions, advanced on either side, considering the facts and circumstances of the instant case, comes to an irresistible and consequent conclusion that the CP (IB) No. 596 (PB) / 2021, filed by the Appellant / Petitioner and other Petitioners, before the Adjudicating Authority / NCLT, Principal Bench, New Delhi, is prima facie not maintainable in the eye of Law. Further, this Tribunal, on going through the Impugned Order, dated 06.01.2023 in CP (IB) No. 596 (PB) / 2021, passed by the Adjudicating Authority / Tribunal, the views expressed in dismissing the CP (IB) No. 596 (PB) / 2021, is free from any legal flaws. Appeal dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... st. However, the Corporate Debtor failed to refund the said amount as paid by the said Applicant and did not even respond to the notice. VII. The Applicants till date have not received possession of their said units and the construction of the said project is still far from completion. It is submitted that a representative group of allottees of the project 'Sushant Megapolis' even approached the Hon'ble National Consumer Disputes Redressal Commission ("NCDRC") under the provisions of Section 12(1)(c) of the Consumer Protection Act, 1986 (that provides class action by consumers) on behalf of all such allottees of the project who wanted a refund of the amount paid to the Corporate Debtor. That the Hon'ble NCDRC noted that in the case of the project 'Sushant Megapolis', development works are not complete even in 12 years and therefore allowed the consumer complaint vide order dated 16.10.2020 with directions to the Corporate Debtor to refund the entire principal amount received from the allottees along with compensation in the form of simple interest @ 8% per annum, to the allottees of plots in the project 'Sushant Megapolis' who do not wish to wait anymore for possession. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant submits that the 'Impugned Order', dated 06.01.2023 of the 'Adjudicating Authority' / 'National Company Law Tribunal', Principal Bench, New Delhi, in CP (IB) No. 596 (PB) / 2021, holding that the 'Section 7 Petition', filed under I & B Code, 2016, is 'not maintainable', since the 'Allottees', belong to different 'Projects', and the 'Impugned Order', was passed without, considering the facts, placed on record. 5. It is represented on behalf of the Appellant that the 'Impugned Order', came to be passed, without considering the fact that all the 'Applicants', before the 'Adjudicating Authority' / 'Tribunal', in 'Section 7 Application' of the I & B Code, 2016, had entered into respective 'Buyer / Builder' Agreements, much before the 'Real Estate (Regulation and Development) Act, 2016 (16 of 2016)', came into force. In fact, the said 'Agreements', specifically, defines that 'Sushant Megapolis' / 'Megapolis', as one complete 'Project'. 6. It is the version of the Appellant that 'Adjudicating Authority' / 'Tribunal', had wrongly interpreted explanation (ii) of Section 5 (8) of the I & B Code, 2016, to mean that each 'RERA Registration', would constitute a 'Real Estate Project', ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Respondent / Corporate Debtor / Company and the Appellant / Petitioner (vide Page 54 of the Vol. I of the Appeal Paper Book), which runs as under: "The 'Consortium / Developer Company', is developing Hi-tech Township located adjoining Greater Noida by the name of "MEGAPOLIS", comprising of various PLOT's, Row Houses / Flats, Bungalows, High-rise Apartments, Schools / Educations Institutions, Hospitals / Health Centres, Corporate Parks, Commercial and Retail Centres, Hotels / Clubs and Leisure Areas etc., apart from all such areas that would be required for development of a modern township on the Scheduled Property ('Project') in accordance with sanctioned plans and approvals and as provided for a Hi-Tech Township Scheme of the Government." 12. According to the Appellant, the 'Single Layout Plan', for the Hybrid Project 'Sushant Megapolis / Megapolis, reflecting Group Housing, Plots and EWS Units as part of 'one Project', comprising of '2504 Acres of Property', and that the Recital Clause (e) of the Allotment Agreement, indicate that a 'Single Layout Plan', was submitted by the 'Corporate Debtor', for an 'Approval', by the 'Competent Authority'. Also that, a perusal of the 'Suppl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tegrated Marking and Sales', 'Geographical Proximity', etc. 16. The Learned Counsel for the Appellant submits that the 'Adjudicating Authority' / 'Tribunal', without considering decision of Hon'ble Supreme Court in Manish Kumar v. Union of India & Ors., reported in 2021, at Page 1, wherein, it is observed that a 'real estate' Project, can be 'composite one', for 'Plots' and 'Apartments' or for 'Plots & Buildings'. 17. Further, the definition of 'Allottee', is split into three Categories, broadly - 'Plot', 'Apartment' and 'Building' and the 'Purchasers' of these are covered under the term 'Allottee' at Paragraph No. 153 of the decision the Hon'ble Supreme Court, in Manish Kumar v. Union of India & Anr., reported in (2021) 5 SCC OnLine SCC 1. Also, it was laid down, in cases where a 'real estate project', is a 'Hybrid' Project, consisting of 'development of land into Plots' and also 'development of Buildings', then, even a 'Transferee of a Plot', will be an 'Allottee'. 18. The Learned Counsel for the Appellant, refers to the decision of Hon'ble Supreme Court in Manish Kumar's case, reported in (2021) 5 SCC, Page 1 and Spl Pg: 98, wherein, at Paragraph No. 158 of the aforesaid deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Debtor', cannot be sustained and in short, the 'Adjudicating Authority' / 'Tribunal', had committed an 'error', while equating Section 2 (zn) with Section 3 of the 'RERA' Act, 2016. 22. In this connection, it is represented on behalf of the Appellant that it is a settled law that as long as there is no ambiguity in the Statutory Language one, should not resort an external interpretative process, especially when the Hon'ble Supreme Court in Manish Kumar's case, has, after analysing the provisions of 'RERA Act, 2016 and I & B Code, 2016', had held that the 'Real Estate Project', has to be judged on case-to-case basis. 23. It is the version of the Appellant that the 'Reason' for mandating that the 'Allottees', should be of the same 'Real Estate Project', is only because such 'Allottees', have 'commonality of interests'. In the instant case, since, the 'Complete Township', which is divided into several 'Sub-Projects' (as per RERA 2016) and has 'commonality, altogether remains 'incomplete', for a 'long period of time', therefore, it is necessary that the 'Corporate Insolvency Resolution Process', may be initiated against the 'Complete Township', being a single Project, in terms of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount of resistance from the Farmers and the Land Owners', is an 'incorrect' and a 'baseless' one, because of the fact the 'Corporate Debtor', through a letter dated 22.07.2011, had assured the 'Allottees' that in 'Sushant Megapolis' Lands, were purchased on market rates with the consent of Landowners and Farmers and there is 'no dispute on the lands', in the 'Project', whatsoever. 28. Apart from that, it is the responsibility of the 'Corporate Debtor', having already entered into 'Allotment Agreements', with 'Hundreds of Allottees' and collected 'Hundreds of Crores of Rupees', to 'acquire peaceful possession of the Lands', for the 'Project'. 29. According to the Appellant, all the '107 Allottees', who were parties to the Section 7 Application of the Code, belong to the 'Real Estate', the documents, such as the sanctioned Map of the Project, Agreements, entered between the 'Developer' and the 'Allottees', Environmental Clearance, 'Marketing Brochure' and 'Letters', were issued by the Respondent, were placed before the 'Adjudicating Authority' / 'Tribunal' and despite the said documents clearly demonstrating that a 'Single Project', in question, namely 'Sushant Megapolis', and he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in (2021) 5 SCC, On-Line SCC 1 (vide Paragraphs 170-173) and was relied upon by this 'Tribunal', in Mist Direct Sale Private Ltd. v. Mitin Batra & Ors. (vide CA AT INS No. 1478 / 2022) all that proviso to Section 7 of the I & B Code, provides his 'Endorsement' of Section 7 'Application', by 100 or 10% of the 'Allottees', whichever is less of the same 'Real Estate Project'. In fact, the proviso, nowhere imposes an 'embargo on Allottees', having purchased different facilities Viz. 'Plot' or 'Apartment' from coming together, to meet the 'threshold', prescribed under second proviso to Section 7 of the I & B Code, 2016. 33. The Learned Counsel for the Appellant contends that, 'if in case a 'Project', comprises of three buildings, which are to be developed, along with the common areas, such as connecting Roads, Parks, Swimming Pools, etc., in different places, then the 'Developer', in compliance with Section of the 'RERA', will obtain three separate RERA Registrations', for each of the Buildings'. 34. The Learned Counsel for the Appellant takes a plea that as per the 'Impugned Order' of the 'Adjudicating Authority' / 'Tribunal', 100 or 10% of the 'Allottees', from the 'same Building', ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in relation to filing a Petition under Section 7 of the Code for 'invocation of Corporate Insolvency Resolution Process', there against. 39. The Learned Counsel for the Respondent points out that the 'purpose' and 'intent' of the 'Legislature', and the 'objectives', behind it, were canvassed in detail, by the Hon'ble Supreme Court of India, bearing in mind the 'three distinguishing characteristics', attributed to the real estate 'Allottees', that 'distinguishes' Allottees, from the other 'Class of Financial Creditors', which are (a) Numerosity, (b) Heterogeneity and (c) Individuality in decision making leading to high level of subjectivity. 40. According to the Learned Counsel for the Respondent in the aforesaid Manish Kumar's Judgment, the Hon'ble Supreme Court, had clearly observed and held that 'the said provisos and requirements for maintaining a Petition by 'one tenth' or 'at least 100 Allottees', in a 'real estate project', under Section 7 of the I & B Code, 2016, to be constitutional in terms of the objects of the Code which provides for the interest of various Stakeholders, including the non-parties to the Petition, as in the present case, who may oppose the Application b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the RERA Act, 2016, and IBC, 2016 in the said regard, would exhibit, that having regard to the legislative intention the term 'Allottees', as defined, in Section-2(d) of the RERA Act 2016, must be understood, undoubtedly, on its 'own terms predominantly', but, at the same time, the other provisions, which form part of the RERA Act 2016, and therefore, the 'Scheme', must also be borne in mind. Similarly, the definition of the 'Real Estate Project', is to be construed, having regard to, the 'Scheme' of the 'RERA Act 2016', in addition to Section 2(zn) thereof. 44. According to the Learned Counsel for the Respondent, it is clarified by the Hon'ble Supreme Court of India, that the 'task of ascertaining who will be 'Allottees', and therefore, what would constitute one-tenth of total number of 'Allottees', must depend upon the nature of the 'Real Estate Project', in question. Further, it will depend on what is offered by the 'Promoter', under the project. It may be 'Real Estate Project', which seeks, to 'Develop' a 'building', and sale of the Building. It may be a project for the Construction of Apartments with the 'Agreements', to convey, the 'undivided interest of land' also. It may b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. It would also necessarily include common areas. The expression "apartment", as defined in RERA, is a very comprehensive one." 48. According to the Respondent, a 'Project', would be in relation to 'Plots', 'Apartments' or 'Buildings'. It could also be for a 'composite one', for 'Plots' and 'Apartments' or for 'Plots' and 'Buildings'. 49. It is represented on behalf of the 'Respondent', that as opposed to the limited argument of the 'Appellant', as to what constitutes 'a real estate project', the aforesaid entire context, is to be borne in mind, which not only includes the terms and conditions of the Project, but, also the scope of the Project, the 'Scheme of the Law', the objects of the 'Code', and further understanding, as to what exactly has been offered by the 'Promoter', while taking into account the 'three distinctive features', of the 'Real Estate Allottees'. 50. The Learned Counsel for the Respondent, points out that the 'Adjudicating Authority / Tribunal', had made 'inquiry' and considered all the records pertaining to the "Township Sushant Megapolis" including the allotment agreements of the allottees which time and again show the intent of the Promoter to sell a unit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ans', relating to the 'respective Projects', as issued by the 'Competent Authority', in this regard. 54. The Learned Counsel for the Respondent, submits that contrary to the Appellant's contentions, even if the 'Adjudicating Authority / Tribunal', had relied upon the explanation to Section 3 of the RERA Act, 2016, for suggesting the definition of the 'Real Estate Project', as defined under Section 2(zn) of the RERA Act, 2016, for the purpose of the I & B Code, 2016, the 'said act was not questioned', in terms of the settled position of Law that, when such has been the 'intent of the Legislature', as provided for, in the I & B Code, 2016 and RERA Act, 2016. Respondent's Decisions: 55. The Learned Counsel for the Respondent / Corporate Debtor, refers to the decision of the Hon'ble Supreme Court in Manish Kumar v. Union of India (2021) Page 1 at Spl Pgs: 43 & 57 wherein, at Paragraph Nos. 8, 47 & 48, it is observed as under: 8. "Under the second proviso, a new threshold has been declared for an allottee to move an application under Section 7 for triggering the insolvency resolution process under the Code. The threshold is the requirement that there should be at least 100 allottee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preme Court in Manish Kumar's case (2021) 5 SCC Page 1 at Spl Pg: 80, wherein, at Paragraph 107, it is observed as under: "2 (d) 'Allottee', in relation to a 'real estate project', means the person to whom a plot, apartment or building, as the case may be, has been allotted, sold (whether as freehold or leasehold) or otherwise transferred by the promoter, and includes the person who subsequently acquires the said allotment through sale, transfer or otherwise but does not include a person to whom such plot, apartment or building, as the case may be, is given on rent." 57. The Learned Counsel for the Respondent, relies on the decision of the Hon'ble Supreme Court in Manish Kumar's case (2001) 5 SCC Page 1 at Spl Pgs: 93 & 94, wherein, at Paragraph Nos. 147 & 148, it is observed as under : 147. "For appreciating the meaning of the word 'allottee', for the purpose of the Code, undoubtedly, it is necessary to travel to Section 2(d) and 2(zn)of RERA for the reason that in Section 5(8)(f) of the Code, the following Explanation was inserted by Act 26 of 2018 w.e.f. 06.06.2018. This provision has been upheld by this Court in Pioneer Urban Land & Infrastructure Ltd. v. Union of India (2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct may relate to plots or apartments or buildings." 151. ……. The task of ascertaining who will be an allottee as also the question as to what will be the total number of allottees and therefore what would constitute one-tenth of total number of allottees must depend upon the nature of the real estate project in question. It will depend on what is offered by the promoter under the project. It may be real estate project which seeks to develop a building and sale of the building. It may be a project for the construction of apartments with the agreements to convey the undivided interest of land also. It may be a project which envisages converting an existing building or a part into an apartment. It may be a project for merely development of land into plots and sale of the plotted land as such. It may be also that the same person may also develop either apartments or building to be sold. In this regard we may remember the explanation in Section 2(zk) (vi)defining the word 'promoter'. The said section reads as under : "(zk) "promoter" means,-- (i) xxx xxx xxx (ii) xxx xxx xxx (iii) xxx xxx xxx (iv) xxx xxx xxx (v) xxx xxx xxx (vi) such other person who constructs any b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A. In regard to a real estate project, all persons, who are treated as allottees, as per the definition of allottee would be entitled to be treated as allottees, for the purpose of Section 5(8)(f) (Explanation) and also, for the purpose of the impugned provisos. All that is required is that the allottees must relate to same real estate project. In other words, if a Promoter has a different real estate project, be it in relation to apartments, in the case an application under Section 7, those would not be reckoned in computing one-tenth as well as the total allotments. 177. …………. The connection with the same real estate project is crucial to the determination of the critical mass, which Legislature has in mind, as a part of its scheme, to streamline the working of the Code. If it is to embrace the total number of allottees of all projects, which a Promoter of a real estate project, may be having, in one sense, it will make the task of the applicant himself, more cumbersome." 61. The Learned Counsel for the Respondent, cites the decision in Veena Parakh Parth Infratech (P) Ltd. (2023) SCC OnLine SCC 1387, wherein at Paragraphs 23 & 24, it is observed as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lottee who is entitled to file Section 7 application? 14. When we look into the sequence of the facts and material on record, it is clear that the project is one namely-- 'Festival City' in which project under first Collaboration Agreement w.e.f. 26.10.2012, 'Mist Avenue' undertook to develop the project and allotted the units to the allottees including the Applicants who are Respondents herein. After cancellation of first Collaboration Agreement and entering into second Collaboration Agreement, on same date, the second Collaboration Agreement, 'Mist Direct' issued letter to allottees informing allottees that now 'Mist Direct' has taken charge of the inventories already sold and has received all documents together with the account of money paid by allottees. It is useful to extract the letter dated 02.12.2017 issued by 'Mist Direct' to all allottees, which is to the following effect:- "MIST DIRECT SALES PRIVATE LIMITED Registered office: Grg. No. 1 Gole market, Bhagat Singh Marg. New Delhi -110001 CIN: U70101DL2013PTC253541 PAN-AAICM6219N [email protected] Date-02-Dec-17 To Mr. Gaurav Bhardwaj FLAT No. 615, Supertech Avant GARDE, Plot No. 1, Sec- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d admeasuring 1,00,980 sq.m." 63. The Learned Counsel for the Respondent, adverts to the decision in Naresh Kumar Agarwal v. SNG Real Estate Pvt. Ltd. (2023) SCC OnLine NCLT, 1390, wherein, at Paragraph No. 12, it is observed as under: 12. " The Corporate Debtor has contended that the Applicant does not meet the minimum threshold criteria under Section 7 of the Code, being the allottee as per the provisions of the RERA Act. It has been brought on record that as per the available information on web portal of RERA, the said project has 38 flats, 2 stilt floors, 1 club house and 2 commercial units, therefore the said petition deserves to be dismissed in light of 1st and 3rd proviso of Section 7(1) of IBC, 2016. Also, as per the Tripartite Agreement, the Applicant has already subrogated his all right in favour of SBI. According to clause 2, 4, 13 & 18 of the agreement, in the event of default by the Applicant, SBI may at its discretion enforce the security, in furtherance of which the SBI has already on 19.10.2019, in the capacity of creditor, had already proceeded against the Corporate Debtor by filing an Original Application No. 1356/2019 (recovery suit) and claiming the security ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant would be at liberty to do so in which case, the observations in the present order will not stand in its way as any adjudication on the merits or maintainability of such an application. The order of the NCLAT dated 13 December 2022 disposing of the appeal filed by the appellant, namely, Company Appeal (AT) (Insolvency) No 1392 of 2022 shall not come in the way of the appellant in taking recourse to its remedies before the NCLT in fresh proceedings, if so advised. In the alternative, since the appellant has a consent decree of the NCDRC, it would be at liberty to execute it in accordance with law. The execution proceedings before the NCDRC are expedited and may be taken up for early disposal." Appellant / Petitioner(s) Contents in Company Petition : 65. Before the 'Adjudicating Authority', 'National Company Law Tribunal', Principal Bench, New Delhi, the 'Appellant / Financial Creditor / Applicant', along with 151 other 'Financial Creditors / Applicants', had filed C.P.(IB) No. 596 (PB) / 2021 wherein, under Part II Column, the 'Respondent / M/s. Ansal Hi-Tech Township Limited, is described as the 'Corporate Debtor' and in Part IV of the main 'Company Petition', the Total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pment of various services as per government policies, etc. That the 'scheduled property' on which the 'Corporate Debtor' has been authorized to develop the real-estate project "MEGAPOLIS" upon, has been specifically denoted and termed as 'the project' by the 'Corporate Debtor'. 68. According to the 'Appellant', the 'Respondent / Corporate Debtor', had 'invited Applications', inter alia, for allotment of residential units in the project 'SUSHANT MEGAPOLIS', also known as 'MEGAPOLIS', comprising of 'Plots' / 'Builtup Plots' / 'Row Houses' / 'Flats' / 'Floors', 'Villas' / 'Bungalows', 'High-rise Apartments', under 'various allocated sites', inclusive of the project. That the 'Applicants' herein are 'Allottees', in the same Real Estate Project 'MEGAPOLIS', being developed by the 'Corporate Debtor' and therefore, fall under the requisite ambit of the provisos of the amended Section 7(1) of the I & B Code 2016, pertaining to the minimum threshold requirement of 'atleast 100 Allottees', to support the 'Application' or '10% of the Total Allottees', whichever is less, belonging to the 'same Real Estate project'. 69. Further, the 'Financial Creditors / Petitioners', being impressed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ps', with word class infrastructure, including facilities for living, working as well as recreation. Accordingly, the Respondent / Corporate Debtor, started developing 'Sushant Megapolis', as a 'Township', comprising of various Projects in form of Group Housing Projects, Plotted Developments, Commercial Projects, Recreation Centres as well as built ups. 74. The Respondent / Corporate Debtor, points out that since the Township involved acquisition of large chunks of lands, the Government, had an important role and responsibility in providing support to the 'Developers', as well as maintaining 'Law and Order', but the Township was phased with a violent resistance, from the Farmers of the Area which caused delay in construction. Subsequently, the Project was further delayed, due to a 'Stay Order', passed by the 'National Green Tribunal'. In fact, due to the reasons which were totally out of control of the Respondent / Company, the Township's Project got delayed and the onset of Covid-19 and delays in the timely payments by the 'Allottees' of various Projects, further brought the construction to a complete halt. 75. According to the Respondent /Corporate Debtor, the significant const ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcial Real Estate Project', and all the 'sub-projects', which are 'independent of each other' and are being developed and sold as 'separate Projects', within the Township are separately registered under 'RERA' with separate RERA Registration Numbers. Each Sub Project, is further divided into 'multiple flats' with 'different completion Schedules'. 80. The plea of the Respondent / Corporate Debtor, the Appellant / Petitioner, belong to 'separate Projects' of the 'Township', who is to 'Qualify', for '100 Allottees' or '10% of the Total Allottees', of the same 'Real Restate Project', at the 'Threshold', as mandated by the 'I & B Code, 2016'. In reality, the '100 Allottees Threshold', is not met, even for the 'Single Real Estate Project', from the entire 'Township'. Under the circumstances, the main CP (IB) No. 596 (PB) / 2021, filed before the 'Adjudicating Authority' /Tribunal', ought to be dismissed, in 'limine', 81. According to the Respondent / Corporate Debtor, approximately 50 Petitioners to the main CP (IB) No. 596 (PB) / 2021, are 'Co-Applicants' or 'Third Applicants' for a 'Single Unit'. Such 'joint Applicants / Petitioners', were represented as 'Different Allottees', to sim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Authority and it would not really represent a critical mass of the allottees in the real estate project concerned. Therefore, we have no hesitation in rejecting the contentions of the petitioner on having made the said interpretation." 83. The Learned Counsel for the Respondent / Corporate Debtor, points out that the Hon'ble Supreme Court of India, in the matter of Pioneer Urban Land Infrastructure Ltd. v. Union of India, reported in (2019) 8 SCC at Page 416, had laid down the criteria that an 'Allottee', who himself 'Defaulted on Payments', can prefer an 'Application', under Section 7 of the I & B Code, 2016, before the 'Adjudicating Authority' / 'Tribunal'. As a matter of fact that over '79 Allottees', had defaulted in 'their payments of dues', and hence, will not be eligible, to prefer an 'Application', under Section 7 of the 'Code', against the 'Respondent / Corporate Debtor'. 84. According to the Respondent / Corporate Debtor, it filed a 'Writ Petition' (MISC Bench No. 4924 of 2024 - Court No.3, vide Annexure A4, Page 46 of the Respondent / Corporate Debtor's Appeal Paper Book), before the Hon'ble Allahabad High Court', Lucknow Bench, seeking directions to the Administra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Construction Activities'. Further, in the wake of 'Covid-19', the 'Lock downs', had resulted in the 'Migration of Labour Workers', due to which, 'No Construction', could take place. 88. The Learned Counsel for the Respondent / Corporate Debtor, points out that the 'Lockdown', had caused an 'erosion of the Customer base', and the consequent demand break down, due to which, the 'Customers' started 'defaulting', on their 'Instalments' and the 'potential buyers', had decided against investing in the 'Project'. 89. The Learned Counsel for the Respondent / Corporate Debtor submits that the Respondent / Company, despite all the hurdles in the 'Project', beyond its control, had endeavoured to 'settle the Customers', with an 'alternate properties', in its ' Group Companies', and the 'Properties' of its 'Associates' and other 'Builders'. The Respondent / Corporate Debtor, had already settled about 1000 such Allottees, with 'alternate properties, at alternate Projects'. 90. It is represented by the Respondent / Corporate Debtor, that a 'Single Layout Plan' for the 'Hybrid Project - Sushant Megapolis / Megapolis ', was submitted by the Respondent, 'for sanction by the 'Competent Authority', ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... definition, whereby, the purview of the 'Financial Debt' is mentioned, in the teeth of definition of 'Allottee' and the 'Real Estate Project', and the same is as follows: "(f) any amount raised under any other transaction, including any forward sale or purchase agreement, having the commercial effect of a borrowing; 1[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);" 94. At this stage, the Respondent / Corporate Debtor's side, points out Sections 2(d) & 2(zn) of 'RERA', 2016, defining the term 'Allottee' and the 'Real Estate Project', which proceeds to the following effect: "At this juncture, this 'Tribunal' points out that the Section 2 (d) of the 'Real Estate (Regulation & Development) Act, 2016, defines 'Allottee', in relation to a 'Real Estate Project', means the person to whom a plot, apartment or b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the 'Corporate Debtor', in its 'Entirety', as per 'Order', dated 04.02.2020 of this 'Tribunal', in 'Flat Buyers Association Winter Hills v. Umang Realtech Pvt. Ltd.' (vide Comp App (AT) (INS) 926 / 2019). Gist of Appellant's Rejoinder : 98. The Appellant, in his 'Rejoinder' (on his behalf / Home Buyers), in the instant 'Appeal', had averred that the entire 'Project' i.e., 'Hi-tech City / Township 'Megapolis' is a single 'Real Estate Project', as per Section 7 of the 'Code' and hence, the CP (IB) No. 596 (PB) / 2021, filed by the Appellant and other Petitioners / Home Buyers / Financial Creditors in class, in accordance with Section 7 of the I & B Code, 2016 and deserves to be admitted. 99. According to the Appellant / 1st Petitioner, the Respondent / Corporate Debtor, was not correct in taking a plea of 'Force Majeure', against an 'Application', filed under Section 7 of the I & B Code, 2016. In fact, the Learned Counsel for the Appellant refers to the Judgment, dated 11.05.2023 of the Hon'ble Supreme Court in the matter of M. Suresh Kumar Reddy v. Canara Bank & Ors., (vide Civil Appeal No. 7121 / 2022), wherein, at Paragraph 10, it is observed and held as under: 10. "Thus o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder', passed by the 'Adjudicating Authority' / 'Tribunal', is 'incorrect', because of the 'wrong interpretation of Section 7 read with explanation provided in Section 3 of the 'Code'. 102. The Appellant's version, in the instant case is that, the complete 'Township', which is divided into several sub-projects, 'remains incomplete', for a 'long period of time'. Therefore, it is necessary the 'Corporate Insolvency Resolution Process', may be initiated against the complete township, being a 'Single Project', in terms of the 'Sanction Plan', as obtained, from the 'Uttar Pradesh RERA website', letter received from the 'Environment Impact Assessment Authority'. 103. The Appellant relies upon the Judgment of this 'Tribunal', dated 08.04.2021 in Mr. Ambika Prasad Sharma, Erstwhile Director of Horizon Buildcon Pvt. Ltd., Rajasthan v. Horizon Buildcon Pvt. Ltd., & Anr., wherein, it is held that 'the contention of the Corporate Debtor that the 'Real Estate Project', could not be completed on account of 'Force Majeure', is untenable in 'Law'. 104. The Appellant cites the 'Order' of the 'Adjudicating Authority' / 'Tribunal', in Atul Rajwadkar, Liquidator for Gupta Infrastructure (India) Pvt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Petitioner', takes a stand that in the Order dated 09.05.2022 of the National Consumer Disputes Redressal Commission (vide Consumer Complaint No. 1951 of 2016), the plea of the Respondent / Corporate Debtor 'ascribing reasons', in regard to the delay, relating to the time, when the 'Respondent / Corporate Debtor', accepted the bookings from the 'Allottees', and regularly raised demands and accepted 'amounts', from the 'Allottees', were 'rejected', a clear adverse circumstance, against the 'Respondent / Corporate Debtor', all the more, when the outbreak of 'Pandemic - Covid-19', came after a decade. 109. At this stage, it is worthwhile for this 'Tribunal', to make a pertinent mention that the Respondent / Corporate Debtor', had furnished a 'Chart', before the 'Adjudicating Authority' / 'Tribunal' (vide Respondent's Reply at Paragraph No. 78 of this Judgment, mentioned Supra). 110. Apart from that, according to the Respondent / Corporate Debtor, the 'Home Buyers List', being the 'Joint Holders', but, represented as different 'Allottees', in the present case (vide Annexure R1 - Page 46 of the Appellant's Appeal Paper Book), is as follows: S. No. CUSTOMER NAME APPLICANT DETAIL 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant's Appeal Paper Book). 112. Indeed, as per definition Section 5(8)(f) explanation (ii) of the I & B Code, 2016, 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). 113. As a matter of fact, Section 5 (8) (f) & (i) of the I & B Code, 2016, defines 'Financial Debt', meaning 'A debt along with Interest, if any, which is disbursed against the consideration for the time value of Money and includes; "Any amount raised under any other transaction, including any forward sale or purchase agreement, having the 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." 114. Section 7 of the I & B Code, 2016, provides for an initiation of 'Corporate Insolvency Resolution Process', by 'Financial Creditor'. The two essential features of an 'Admission' of an 'Application', under Section 7 of the 'Code' are (a) Existence of Debt and (b) Default. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tees under the same real estate project, whichever is less". 122. Therefore, in the present case on hand, the foremost aspect to be taken into account is the 'RERA Registration' of the 'Projects', of the 'Corporate Debtor', for ensuring the 'initial limit' for 'pressing into service' of the ingredients of Section 7 of the 'Code'. 123. It cannot be forgotten that the Respondent / Corporate Debtor's Projects were of 'different character', containing terms and conditions therein. Also that, in the instant case, it is a 'Township' of more than 1500 Acres with 'different type of developments' (Viz. 'Plot, Apartments, Builtup Industrial and Commercial', etc.) with independent, 'RERA' Registrations, and no phasewise Registrations. 124. Moreover, the present Township, comprises of 'real estate projects' of different character, Viz. 'Plots', 'Apartments' (named 'Fairway Apartments') in this case, 'LIG EWS Builtup', etc., the said 'Real Estate Projects', were given different Building Sanctioned Plans, having independent terms. In fact, for the said Sanctioned Plans, being the subject matter of 'RERA' Registrations, secured for the said ongoing Projects, under the 'Township', different 'Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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