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TMI Blog2024 (7) TMI 194X X X X Extracts X X X X X X X X Extracts X X X X ..... r the definition of allottees . The Adjudicating Authority has further held that in the facts of the present case, as per affidavit of the Corporate Debtor, the total number of allotted units in the Floreal Tower is 504 and 366 allottees therein fall under the Assured Returns Class of Creditors. Since the present Appellants happen to be part of the Assured Returns Class of Creditors, they continue to belong to the substratum of allottees and therefore continue to be governed by the threshold limit prescribed under second proviso to Section 7(1) of IBC. Since the present application was filed before the IBC Amendment Act 1 of 2020 had come into effect, consequently upon the amendment, as financial creditors who are allottees under a real estate project, the Appellants were required to meet the threshold criteria of not being less than 100 such creditors in the same class or not being less than 10% of the total number of creditors in the same class, whichever is less, to qualify to file Section 7 application against the Corporate Debtor. This parameter has clearly not been complied with thereby making the Section 7 application non-maintainable. The Appellants cannot be said to go out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r is earlier, by the Corporate Debtor. 4. Further submission was made that the Corporate Debtor having not completed the project applied for renewal of License issued by the Town and Country Planning Department. The License had been renewed up to 13.11.2024 until final completion. Furthermore, it was submitted that though an Occupancy Certificate dated 16.08.2017 was placed before the Adjudicating Authority by the Corporate Debtor, the Occupancy Certificate cannot be viewed as Completion Certificate of the building. In any case, the liability for payment of MAR was up to 36 months from the date of Occupancy Certificate which was not complied to by the Corporate Debtor. 5. It was pointed out that the Appellant had paid the entire consideration amount of Rs.29.98 lakhs and thus had discharged their part of the obligation. It is also contended that neither the building is completed nor the office space leased out till date by the Corporate Debtor. However, the Corporate Debtor failed to make the payments as per MAR following which notices for default were issued on 09.01.2018 and 12.02.2018. Since payments were still not forthcoming, Section 7 application was filed before the Adjudica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into an MOU dated 24.04.2010 and Space Buyers Agreement (SBA) dated 26.04.2010, stated that MAR was payable by them to the Appellants up to 36 months after completion of the building or till the office space was put on lease, whichever was earlier. Since the Occupation Certificate was received on 16.08.2017, thus, in terms of the MOU, the obligation to pay MAR was only till 16.07.2020. This amount had already been paid till June, 2019 and for the remaining period up to July, 2020, the Corporate Debtor had already handed over demand drafts to the Appellants amounting Rs. 8.03 lakhs. Despite having received the complete amount, the Appellants have unlawfully claimed that the obligation of the Corporate Debtor is still continuing. The terms of the MOU being definitive and conclusive in nature, and the Corporate Debtor having complied thereto, there is no obligation to be further discharged by the Corporate Debtor. The demand of further amounts by the Appellants is not in conformity with the MOU clauses and is only a ploy to arm-twist the Corporate Debtor with a mala fide intention. 8. It is also the contention of the Respondent that the IBC is not a recovery legislation and that the j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent and separate agreement executed between the two parties for MAR. The present petition is maintainable dehors the allotment as the cause of action arises due to the default under the MOU of 24.04.2010 and not from the terms of allotment. Hence, the petition is not impacted by the judgment of the Hon ble Apex Court in Manish Kumar supra and is maintainable without need of any modification. It is also the contention of the Appellants that the Corporate Debtor have repeatedly breached the Settlement Deed which clearly reflects their misconduct and that they are trying to wriggle out of their undertaking by taking refuge under the amendment of Section 7 of the IBC which amounts to abuse of process of law. 12. Repelling the above arguments of the Appellant, the Learned Counsel for the Respondent vehemently contended that the present petition is not maintainable in the light of amendment to Section 7 of the IBC which expressly provides that for financial creditors who are allottees, a Section 7 application can be filed against the Corporate Debtor jointly by not less than 100 of such allottees under the same real estate project or not less than 10% of the total number of such allott ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isos as the case may be within thirty days of the commencement of the said Act, failing which the application shall be deemed to be withdrawn before its admission. 14. The second proviso to Section 7(1) of the IBC refers to financial creditors who are allottees under a real estate project. As such allottees are not defined in the statutory construct of IBC. However, in terms of Explanation (ii) to Section 5(8)(f) of IBC, the definitions of allottee and real estate project is to be derived from Real Estate (Regulation and Development) Act, 2016 ( RERA in short) which is as under: 2. Definitions. In this Act, unless the context otherwise requires, - .. (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; (zn) real estate project means the development of a building or a building consisting of apartments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttee . After taking notice of the judgement of this Tribunal in Nikhil Mehta supra, the Adjudicating Authority has also correctly noted that this judgement has nowhere observed that assured returns class of creditors in a particular project do not come under the definition of allottees . The Adjudicating Authority has further held that in the facts of the present case, as per affidavit of the Corporate Debtor, the total number of allotted units in the Floreal Tower is 504 and 366 allottees therein fall under the Assured Returns Class of Creditors. Since the present Appellants happen to be part of the Assured Returns Class of Creditors, they continue to belong to the substratum of allottees and therefore continue to be governed by the threshold limit prescribed under second proviso to Section 7(1) of IBC. This threshold criterion was also made applicable even in respect of all Section 7 applications filed before the amendment and given two months period for modifying their petition accordingly. Since the present application was filed before the IBC Amendment Act 1 of 2020 had come into effect, consequently upon the amendment, as financial creditors who are allottees under a real est ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yers that can approach and seek remedies under RERA no others. In such circumstances, to treat a particular segment of that class differently for the purposes of another enactment, on the ground that one or some of them had elected to take back the deposits together with such interest as ordered by the competent authority, would be highly inequitable. As held in Natwar Agarwal (HUF) (Supra) by the Mumbai Bench of National Company Law Tribunal the underlying claim of an aggrieved party is crystallized in the form of a Court order or decree. That does not alter or disturb the status of the concerned party - in the present case of allottees as financial creditors. Furthermore, Section 238 of the IBC contains a non obstante clause which gives overriding effect to its provisions. Consequently its provisions acquire primacy, and cannot be read as subordinate to the RERA Act. In any case, the distinction made by the R.P. is artificial; it amounts to hyper classification and falls afoul of Article 14. Such an interpretation cannot therefore, be countenanced. 9. In view of the foregoing reasons, the impugned order is hereby set aside; the appellants are declared as financial creditors withi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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