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Judgment
Virendra Kumar Gupta, Member (Technical)
IA NO.179/2020
This application has been filed by the applicants of IA No.178/2020 for stay of CIRP process against the Corporate Debtor and interim relief, if any.
This application is devoid of merits, hence dismissed. As far as interim relief is concerned, this ground has also become infnictuous as IA No.178/2020 is being disposed of now.
IA NO.178/2020
In this application, there are 20 applicants who have deposited the entire sale consideration in designated escrow account being operated by the Union Bank of India/ Corporate Debtor as per the direction/ consent of HUDCO. HUDCO had also given NOC to applicants enabling them to raise housing loan from different Financial Institutions/ Banks. The applicants have also complied with the conditions of such NOC. In the background of these facts, it is the grievance of the applicants that HUDCO was obliged to issue the NOC in favour of homebuyers for the execution of registered sale deed in their favour. It has also been claimed that the status of the units even as per the communication of HUDCO with auditors dated 10.06.2014 stand as sold. It is also claimed that the RP has the requisite power under the provisions of IBC, 2016 to execute the sale deed. Further, RP be directed to comply with all laws and obtain occupancy certificate for the project as a whole.
IA NO.302/2020
This application has been filed by 16 homebuyers. The reliefs sought in this application are similar to the relief sought in IA No.178/2020. The other facts are identical except that the amount of sale consideration and source thereof may be through their own savings and not out of any loan availed by them and in case of loan, NOC by HUDCO has been obtained and terms and conditions of such NOC have been complied with by such homebuyers. It is also to be noted that in case of both the applications, i.e., IA No.I78/2020 and IA No.302/2020, the possession of flats has been given and the applicants arc residing therein.
Arguments on behalf of applicants
Ld. Counsel appearing on behalf of the applicants narrated the basic facts and contended that there was no fault on the part of such applicants as they had complied with all the conditions of their agreement with the Corporate Debtor as they had deposited the entire sale consideration in the designated escrow account and they had no control over the operations of such account or any misappropriation of funds by the Corporate Debtor therefrom. It is further pointed out that they are having the poggesgion, however, for want of registered sale deed in their favour they are having multiple issues which can be solved only after execution of registered sale deed in their favour.
Arguments on behalf of RP/ CoC/ HUDCO
Ld. Counsel appearing for HUDCO appeared and took lead in opposing the applications. The main ground is that the HUDCO had consented for establishment of designated escrow account for the project which was to be operated by corporate debtor and Union Bank of India. However, the said account was operated in irregular manner and there were eventualities of misappropriation/ siphoning off the funds. Hence, NOC cannot be given.
However, on a query from the Bench, Ld. Counsel appearing for HUDCO could not point out any mistake on the part of the applicants in compliance of terms and conditions of the agreement entered into by them with the corporate debtor. Even in case of NOC given for borrowing purposes by individual homebuyers, no fault in compliance to such NOC could be pointed out.
Ld. Counsel appearing for RP/ CoC also could not point out any non-compliance or default on the part of applicants of the agreement entered into by and between them and the corporate debtor.
Conclusion
We have heard the Ld. Counsel appearing on both sides and perused the material on record.
It is not in dispute that the applicants in IA No.179/2020 and in IA No.302/2020 had entered into an agreement for purchase of flats of the Corporate Debtor which has been admitted into CIRP. The Corporate Debtor is still going under CIRP. The RP has taken charge and is conducting CIRP as well as managing the affairs of the Corporate Debtor as a going concern.
It is further noted that all the applicants have paid their entire sale consideration either through their own savings or borrowing money from financial institutions after getting NOC for the same purpose from HUDCO. It is also noted that such loans have also been paid and there is no violation of NOC given by HUDCO to them. In nutshell, nothing remains to be complied by such applicants.
We also find ourselves in agreement with the contention made on behalf of the applicants that if there is a siphoning off funds by the corporate debtor or any other irregularity being committed in the operation of escrow account, the same cannot be a legally sustainable and justified basis for not granting NOC by HUDCO for execution of registered sale deed in favour of the applicants as such applicants do not have any control over this arrangement between HUDCO, corporate debtor and the Union Bank of India. The HUDCO may pursue, if it is so advised legal remedy against the Corporate Debtor or Union Bank of India for such breach of agreement between them.
Thus, we accept all pleas of the applicants and direct as under :-
I. is directed to grant NOC for execution of sale deed in favour of all the applicants herein to RP within seven days from the uploading of this order on portal of NCLT, being Adjudicating Authority.
II. The RP shall complete all formalities for the execution of sale deed and take all necessary steps with the concern authorities for execution of the same within 30 days from the date of uploading of this order on portal of NCLT being Adjudicating Authority.
III. The applicant/ homebuyers shall pay the applicable stamp duty and other charges in terms of their agreement with the Corporate Debtor to facilitate the process and enable the RP for execution of sale deed.
IV. RP shall also take necessary steps to obtain occupancy certificate for the project as required under relevant law/ rules.
V. The registry is directed to upload the copy of this order immediately on pronouncement.
VI. In the result, IA No.178/2020 and IA No.302/2020 stand allowed in terms of directions given as above. IA No.179/2020 stands dismissed as infructuous in view of our order in IA No.178/2020.
VII. Certified true copy of this order, if applied for, be issued upon compliance with all requisite formalities.