Bibhuti Bhushan Biswas & Ors. vs M/s. Ansal Properties and Infrastructure Ltd.

PER SH. L. N. GUPTA, MEMBER (T)

Mr. Bibhuti Bhushan Biswas and 125 others (collectively called as, the 'Applicants/Financial Creditors') have filed the present application under the Section 7 of the Insolvency and Bankruptcy Code, 2016 (for brevity, the 'IBC, 2016') read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 with a prayer to initiate the Corporate Insolvency process against M/s. Ansal Properties and Infrastructure Limited (for brevity, the 'Respondent').

The Respondent namely, M/s. Ansal Properties and Infrastructure Limited is a Company incorporated on 30.06.1967 under the provisions of erstwhile Companies Act, 1956 with CIN L45101DL19673LC004759 having its registered office at 115, Ansal Bhawan 16, Kasturba Gandhi Marg New Delhi-110001, which is within the territorial jurisdiction of this Tribunal. The Authorized Share Capital of the Respondent Company is Rs.1,50,00,00,000/- and Paid-up Share Capital of the Company is Rs.78,70,24,380/- as per the Master Data annexed with the Application.

It is submitted by the Applicants that they have purchased flats/villas in the project developed by the Respondent, namely, "The Fernhill" situated at "Revenue Estate of Village Mewka, Tehsil-Manesar, Sector-91, District Gurgaon, Haryana (hereinafter referred to as "the Project") in the year 2011. It is submitted that the Applicants had purchased the residential flats / villas ("Units") as the Respondent had assured timely physical possession. Pursuant to booking of the units, the Applicants executed separate builder-buyers' agreements with respect to the allotted units. Terms and Conditions of these agreements were identical except the sales consideration of each unit.

The Allotee-wise details of the units allotted, dates of allotment and amount of default as stated by the Applicants in the application are summarized in the table given below:

It is stated by the Applicants in terms of the Clause 5.1 of Builder-Buyer Agreement, the Respondent had promised to hand over the physical possession of the said units booked within 48 months i.e., by 30^th July 2017 for majority of the Applicants. Even after including the grace period, the Respondent was required to hand over the allotted units by 30^th January, 2018. Whereas, till 31^st March, 2021, the said units were not completed and the entire Project is lying incomplete/unfinished even after a gap of 04 years from the promised date of handing over physical possession.

It is further stated by the Applicants in their Written Submissions that as per the Bank Statements of the Applicants/ Respondent's Ledger Account/Receipts, the total amount of paid/disbursed to the Respondent by the Applicants against the units purchased is approximately Rs.53,46,32,282/-.

It is further stated by the Applicants that instead of using this amount in development of the Project, the Respondent has transferred the excess amount to Samyak Projects & Infrastructure Limited (hereinafter referred to as "SPIL"). As per the MoU dated 6th January 2011 and Addendum thereto dated 3rd February 2020, SPIL should have received Rs. 114.04 Crore (after taking into account the revenue sharing ratio of 70:30, which was subsequently revised to 80:20 as per the MoU & Addendum), whereas they actually received the total amount of Rs. 169.26 Crore, thereby an excess of Rs. 55.22 Crore was paid to them. That neither the Respondent nor the SPIL have been able to justify this transaction. With an aim to cover up this excess payment, an Addendum dated 3rd February 2020 was signed between the Respondent and the SPIL, whereby the revenue sharing percentage of the SPIL was increased from 34.5% to 45%. It is submitted by the Applicant that the project under reference was always a cash rich project, however, the non-completion of the project raises suspicions of siphoning off of funds.

It is contended by the Applicants that since the Respondent has neither handed over the possession nor refunded the payment made by the Applicants, it has committed default and hence, CIRP be initiated against the Respondent.

On perusal of records, it was noticed that Form-2 dated 16.04.2021 with the consent of one Navjit Singh, IP (who is reported to have expired) is filed with the present Application. This being the curable defect, vide order dated 03.11.2022, the Applicants were directed to rectify and file the fresh Form-2 within a week. The Applicants vide their Affidavit dated 05.11.2022 have filed the fresh Form-2, which is taken on record.

On issuance of notice, the Respondent has filed its Reply and written submissions and opposed the prayer made by the Applicants. It has stated that most of the Applicants are not bona fide Home Buyers. It has further submitted that -

The Applicants have filed their Written Submissions and has stated that the Resolution Plan submitted by the Respondent, seems like an insincere effort on their part to justify their position. To begin with, the Resolution is undated, unsigned, extremely vague and is not detailed enough. The Financial Creditors have not been presented with any such Resolution Plan and have not given their assent to any such Resolution. The Resolution Plan seems more like a last-minute effort to present their position before this Adjudicating Authority.

After hearing submissions of both the parties and perusing the documents placed on record, we notice that the present Application has been filed by more than 100 Allotees of the Project ‘The Fernhill’ hence, the present Application meets the eligibility in terms of proviso to Section 7 of IBC, 2016. Hence, we would now like to proceed to examine the application on its merits.

It is stated by the Respondent that the Project got delayed due to the following reasons:

At this stage, we would like to refer to the MoU/ Builder Buyer Agreement entered by and between the parties herein. Since, it is not possible to refer to all the builder-buyer agreements, we refer to the Agreement entered into by one of the Applicants Mr. Vikram Jeet Garg (serial number 1 of the table of the Applicants given in Para 5 above), and find that the said agreement was executed on 10.07.2013. From the clause 5.1 (relating to Possession of Flat) we find that the Respondent was required to handover the possession of the unit to the Applicant within 48 months i.e., by 09^th July 2017 and with grace period of 6 months by 09^th January, 2018 i.e., by a date, which was much before the commencement of COVID-19 period. We are aware that the First Lockdown on account of Covid-19 was enforced by the Government on 25.03.2020. Hence, in our view, the Corporate Debtor had sufficient time to complete the Project in terms of the Builder-Buyer Agreement, which it failed to deliver.

As regards, the alleged disruptions due to the orders of Hon'ble Courts or NGT, we observe that these were the orders in rem and not in personam or Project-specific, which could provide solace to the Respondent. Further, all these are contingencies, which every developer anticipates in advance and provides alternate/fallback arrangements to ensure completion of construction activity and delivery as per the schedule under the agreement/contract. In our considered view, the Applicant/Homebuyers, who have invested their hard-earned money cannot be subjected to loss or asked to bear the brunt of such contingencies.

As regards the so termed resolution plan proposed, though the Respondent has submitted that many homebuyers have given their assent but we do not find any document in support of this contention filed on record or produced before us. Even the applicants herein have not shown any confidence in the said resolution plan. Hence, this Adjudicating Authority cannot compel the Applicants to settle with the Respondent.

At this juncture we refer to the Judgment of Hon'ble Supreme Court passed in the matter of Innoventive Industries Ltd. Vs. ICICI Bank and Ors. – (2018) 1 SCC 407, whereby it is held that:

In view of the above discussion, the applicants have succeeded in proving their debt and default on the part of the Respondent in the instant case. Hence, in the given facts and circumstances, the present Application being complete and the default being committed above the threshold limit, the present Application is admitted in terms of Section 7(5) of the IBC and accordingly, moratorium is declared in terms of Section 14 of the Code. As a necessary consequence of the moratorium in terms of Section 14(1) (a), (b), (c) & (d), the following prohibitions are imposed, which must be followed by all and sundry:

As proposed by the Financial Creditor, this Bench appoints Mr. Ashwani Kumar Singla, IP (Email: [email protected]) having Registration No. IBBI/IPA001/IP-P02035/2020-21/13122, as IRP subject to the condition that no disciplinary proceeding is pending against the IRP so named and disclosures as required under IBBI Regulations, 2016 are made by him within a period of one week from this Order. This Adjudicating Authority orders that:

The Financial Creditor is directed to deposit Rs. 2,00,000/- (Two Lakh) only with the IRP to meet the immediate expenses. The amount, however, will be subject to adjustment by the Committee of Creditors as accounted for by Interim Resolution Professional and shall be paid back to the Financial Creditors.

A copy of this Order shall immediately be communicated to the Financial Creditors, the Corporate Debtor and the IRP mentioned above by the Court Officer/Registry of this Tribunal.

In addition, a copy of the Order shall also be forwarded by the Court Officer/Registry to the IBBI for their record.