NCLAT (17.11.2020) in Shubha Sharma Vs. Mansi Brar Fernandes, & Anr.[Company Appeal (AT) (Insolvency) No. 83 of 2020] held that ; we are of the considered view that the Respondent No. 1 is a speculative investor (on account of buy back agreement) and not a person who is genuinely interested in purchasing the apartments. Therefore, she cannot be termed as a allottee as per the explanation attached to clause (f) of Section 5(8) of the I&B Code and the light of observations of the Hon’ble Supreme Court in the case of Pioneer Urban Land & Infrastructure Ltd. (Supra). The Respondent No. 1 is not a genuine allottee, therefore, the amount of Rs. 35 lacs paid to the Respondent No. 2 is not a Financial Debt and the Respondent No. 1 is not a Financial Creditor.
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Excerpts of the order;
The Appellant Mr. Shubha Sharma, Former Director of Gayatri Infr Planer Pvt. Ltd. (Corporate Debtor) has preferred the instant Appeal under Section 61(1) of the Insolvency and Bankruptcy Code, 2016 (In Short I&B Code) against the order of admission of Application under Section 7 of the I&B Code, filed by Mrs. Mansi Brar Fernandes claiming to be the Financial Creditor. The order of admission passed on 02.01.2020 by the Adjudicating Authority (National Company Law Tribunal) New Delhi, Principal Bench with consequences of imposing the memorandum and appointment of Interim Resolution Professional (IRP) has been assailed in the instant Appeal.
# 2. Gayatri Infra Planner Pvt. Ltd. Company is engaged in the business of real Estate development and allied activities. Gayatri Infra Planner Pvt. Ltd. (Respondent No. 2/Corporate Debtor) and Mrs. Mansi Brar Fernandes (Respondent No. 1/Financial Creditor) entered into an Agreement/MOU on 06.04.2016. A provisional allotment of an under construction located in Sector
# 16, Noida Extension, UP having 4 apartments area of 6,740 Sq. Ft. (Approx.) in a project named “Gayatri Life” was made infavour of the Financial Creditor at an agreed consideration of Rs. 1,03,78,521/-and as part payment an amount of Rs. 35 lacs was paid at the time of the signing of the Agreement. The construction likely to complete within a period of 12 months from the date of execution of the agreement i.e. by April, 2017. There was a compulsory buyback provision in the agreement which stipulates that upon the expiry of 12 months, the Corporate Debtor was to return Rs. 35 lacs paid by the Financial Creditor and also an additional payment of Rs. 65 lacs as premium. For the same, the Corporate Debtor issued two postdated cheques in favour of the Financial Creditor. In the Agreement, there was a condition that on the expiry of the period contained in the said Agreement, the Financial Creditor inquired from the Corporate Debtor whether it intends to allot the said apartments to the Financial Creditor or he intends to exercise the compulsory buyback. The Corporate Debtor exclaimed his interest to buyback the said apartments from the Financial Creditor. Accordingly, in view buy back the said cheques were deposited for encashment but both the cheques were dishonored. Thereafter, another MOU dated 07.04.2017 was entered between the parties for seeking extension of 6 months of the original MOU. However, even after expiry of 6 months no money was repaid. Thereafter, another extension letter dated 07.10.2017 was entered between the parties wherein extension of MOU till 06.10.2018 was sought. However, despite second extension the Corporate Debtor, neither paid the amount nor given the possession of the apartments. Therefore, the Financial Creditor has filed the Application under Section 7 of the I&B Code, for initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor.
# 3. The Corporate Debtor in its reply has mainly raised two objections in regard to the Application under Section 7 of I&B Code, first objection is that Financial Creditor does not come under the definition of the Financial Creditor and second objection is that the Corporate Debtor has not committed default in payment of Financial Debt and the Financial Creditor has paid only Rs. 35 lacs to the Corporate Debtor, whereas, the Financial Creditor is claiming Rs. 1,02,50,000/-.
# 8. Learned Senior Counsel for the Appellant also submitted that the Respondent No. 1 (Financial Creditor) in her Application under Section 7 of the I& B Code mentioned that the total debt disbursed is Rs. 1,02,50,000/- whereas, admittedly only Rs. 35 lacs were paid to the Corporate Debtor. Thus, the Application itself defective. Therefore, the impugned order is liable to be set aside.
# 9. Learned Senior Counsel for the Appellant further submitted that the MOU dated 06.04.2016 between the Respondent No. 1 and 2 an is irrevocable contract that they shall compulsorily buy back the apartments at the end of the term of MOU and Respondent No. 1 is duty bound for execution of this buyback and Respondent No. 2 shall refund the amount plus premium of Rs. 1,00,00,000/- to Respondent No. 1. Therefore, the Respondent No. 1 cannot be considered as a Financial Creditor for alleged claim of Rs. 1,02,50,000/- as a Financial Debt against the Respondent No. 2 (Corporate Debtor). Thus, there is no relationship between the Respondent No. 1 and 2 as a Financial Creditor and Corporate Debtor. Therefore, the Application itself under Section 7 of the I&B Code, is not maintainable.
# 10. It is also submitted on behalf of the Appellant that the Respondent No. 1 (Financial Creditor) is a speculative home buyer and did not have requisite locus to file the Application under Section 7 of the I&B Code, speculative home buyer has no locus to file an Application under Section 7 of the I&B Code, as held by the Hon’ble Supreme Court in Pioneer Urban Land & Infrastructure Ltd. & Anr. Vs. Union of India & Ors. (2019) SCC Online SC 1005. Hence, the Appeal be allowed and the impugned order be set aside.
# 13. After hearing Learned Counsel for the parties, following issues arise for our consideration: -
i. Whether in view of the I&B Code (Amendment)Ordinance 2019/Amendment Act, 2020, the Application under Section 7 of the I&B Code by one allottee is not maintainable?
ii. Whether MOU dated 06.04.2016 is an agreement for sale the apartments or an agreement for buyback the apartments?
iii. Whether the Respondent No. 1 is a genuine allottee or a speculative investor?
Issue No. 1
# 19. With the aforesaid observation of the coordinate bench of this Tribunal, we are of the view that provision of Section 7 of the I&B Code, as is obtained prior to the date of Amendment occupies the field as of now. Thus, we hold that there is no effect of the I&B Code, Amendment Ordinance 2019 which was replaced by the I&B Code Amendment Act, 2020, on the present Application under Section 7 of the I&B Code. Therefore, it is not required to be considered whether in the light of the aforesaid Amendment whether the Respondent No. 1 has modified the Application under Section 7 of the I& B Code, or not.
Issue No. 2.
A. Incorrect Particulars mentioned in the Application
# 23. We have considered overall facts of this case and of the firm view that the Respondent No. 1 has deliberately mentioned the incorrect particulars and not disclosed the date of default in the Application.
B. Whether MOU is an agreement for sale the apartments or an agreement to
buy back the apartments?
# 34. With the aforesaid, features of the MOU, it is clear that MOU is not an agreement for sale the apartments to the Respondent No. 1.
# 36. Bare reading of these clauses, it is apparent that MOU is an irrevocable contract and the Respondent No. 1 is duty bound for execution of buy back. There is a provision in the event of failure of the Respondent No. 2 to complete the buy back by the end of 12 month. On completion of all buy back of apartments by the Respondent No. 2, the Respondent No. 1 have no right, claim & interest in the apartments. As per clause 8 of the MOU, the Respondent No. 2 ensures the Respondent No. 1 that in the event of dishonor of any cheques (one cheque of Rs. 65 lacs and another cheque of Rs. 35 lacs), the Respondent No. 1 shall take possession of the apartments on the basis of MOU and no possession letter or any further act or deed would be required. The Respondent No. 1 shall be free to sell/deal with the same in any manner and no demand shall be payable by the Respondent No. 1. Thus, we hold that the MOU is an agreement to buyback the apartments.
Issue No. 3
Whether the Respondent No. 1 is a genuine allottee or a speculative investor.
# 41. In such circumstances, we are of the considered view that the Respondent No. 1 is a speculative investor and not a person who is genuinely interested in purchasing the apartments. Therefore, she cannot be termed as a allottee as per the explanation attached to clause (f) of Section 5(8) of the I&B Code and the light of observations of the Hon’ble Supreme Court in the case of Pioneer Urban Land & Infrastructure Ltd. (Supra). The Respondent No. 1 is not a genuine allottee, therefore, the amount of Rs. 35 lacs paid to the Respondent No. 2 is not a Financial Debt and the Respondent No. 1 is not a Financial Creditor. We are unable to subscribe of the view of the Learned Adjudicating Authority that the Respondent No. 1 is a Financial Creditor.
# 42. In view of the aforesaid findings, we have no other option. But to set aside the impugned order dated 02.01.2020. The Application preferred by the Respondent No. 1 under Section 7 of the I&B Code, is dismissed. The Respondent No. 2 is released from rigours of the moratorium and is allowed to function through its Board of Directors from immediate effect. The Interim Resolution Professional will provide and intimate the fees for the period he has functioned and cost of the CIRP incurred by him to the Respondent No. 2 and the amount if any, already received. The Respondent No. 2 will pay the amount to the Resolution Professional after adjusting any amount already paid by the Respondent No. 1. The Interim Resolution Professional will hand over the assets and records to the Board of Directors.
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