Nandkishore Harikishan Attal vs Marvel Landmarks Private Limited

ORDER

“We have purchased flat at Marvel Ganga Sangaria, Flat no. 301 of E Building located at S. No. 21- Mohmmand Wadi, Pune. As per agreement, till date we have paid ₹2,68,04,228/- to you against above flat. As per agreement terms, we should have got possession of our flat by 31^st December 2013, but till date we have not got possession. After several follow up calls, meetings, communication, we were assured that we will get possession of our flat by 15^th may, 2015. But, even after four years, we are yet to receive possession of the flat as well as compensation for delay in giving possession of the said flat. There has been delay of almost six years even though we have paid 80% of the flat value by December 2013 itself. We have suffered huge loss not only financial but also mental trauma. Hence, we request you to resolve the issue immediately.

We herewith demand you to waive off the balance outstanding payment in lieu of the delayed interest cost for which we have annexed the interest calculation sheet for your ready reference. Hence, considering the above account scenario, we request you to give us the possession immediately without any further delay and balance amount of 2.78 Crores (approx.) within three months.”

“7)

In respect of the prayer made in your notice, the same is not genuine, proper and acceptable, hence denied by us. We would like to remind you that, our representatives continuously followed you for delivering possession of the said unit. Firstly on 27.04.2016, our representative has mailed you as follows, ‘We are pleased to inform you that your unit is complete and ready for the furniture possession. Please find the attached full and final statement herewith for you reference. Request you to please make the payment and complete the possession formalities. After the said mail, from time to time our representative requested you to clear the dues in respect of the unit and take the possession of the said unit, but unfortunately till date, you have not taken any steps for taking possession of the said unit by clearing payment due by you in respect of the said unit.

8)

That, by this notice reply, we humbly request you to please clear the dues in respect of Unit No. E-301 and complete possession formalities as early as possible. For your perusal, we have attached herewith completion certificate of the unit, looking forward for your co-operation.”

“Partial Compensation received towards delay in giving possession of flat at Marvel Sangria E-301.” Since the Petitioner has already accepted and received the compensation albeit partially, for the claim being compensation which is not yet determined, CIRP cannot be initiated for the claim of compensation.

“28.

When it comes to a financial creditor triggering the process, Section 7 becomes relevant. Under the Explanation to Section 7(1), a default is in respect of a financial debt owed to any financial creditor of the corporate debtor — it need not be a debt owed to the applicant financial creditor. Under Section 7(2), an application is to be made under sub-section (1) in such form and manner as is prescribed, which takes us to the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. Under Rule 4, the application is made by a financial creditor in Form 1 accompanied by documents and records required therein. Form 1 is a detailed form in 5 parts, which requires particulars of the applicant in Part I, particulars of the corporate debtor in Part II, particulars of the proposed interim resolution professional in Part III, particulars of the financial debt in Part IV and documents, records and evidence of default in Part V. Under Rule 4(3), the applicant is to dispatch a copy of the application filed with the adjudicating authority by registered post or speed post to the registered office of the corporate debtor. The speed, within which the adjudicating authority is to ascertain the existence of a default from the records of the information utility or on the basis of evidence furnished by the financial creditor, is important. This it must do within 14 days of the receipt of the application. It is at the stage of Section 7(5), where the adjudicating authority is to be satisfied that a default has occurred, that the corporate debtor is entitled to point out that a default has not occurred in the sense that the “debt”, which may also include a disputed claim, is not due. A debt may not be due if it is not payable in law or in fact. The moment the adjudicating authority is satisfied that a default has occurred, the application must be admitted unless it is incomplete, in which case it may give notice to the applicant to rectify the defect within 7 days of receipt of a notice from the adjudicating authority. Under sub-section (7), the adjudicating authority shall then communicate the order passed to the financial creditor and corporate debtor within 7 days of admission or rejection of such application, as the case may be.”

“…

16.

Timelines for refund-Any refund of monies along with the applicable interest and compensation, if any, payable by the promoter in terms of the Act or the Rules and Regulations made thereunder, shall be payable by the promoter to the allottee within forty-five days from the date on which such refund along with applicable interest and compensation, as the case may be, become due.

It can thus be seen that just as information utilities provide the kind of information as to default that banks and financial institutions are provided Under Sections 214 to 216 of the Code read with Regulations 25 and 27 of the Insolvency and Bankruptcy Board of India (Information Utilities) Regulations, 2017, allottees of real estate projects can come armed with the same kind of information, this time provided by the promoter or real estate developer itself, on the basis of which, prima facie at least, a "default" relating to amounts due and payable to the allottee is made out in an application Under Section 7 of the Code. We may mention here that once this prima facie case is made out, the burden shifts on the promoter/real estate developer to point out in their reply and in the hearing before the NCLT, that the allottee is himself a defaulter and would, therefore, on a reading of the agreement and the applicable RERA Rules and Regulations, not be entitled to any relief including payment of compensation and/or refund, entailing a dismissal of the said application. At this stage also, it is important to point out, in answer to the arguments made by the Petitioners, that Under Section 65 of the Code, the real estate developer can also point out that the insolvency resolution process under the Code has been invoked fraudulently, with malicious intent, or for any purpose other than the resolution of insolvency. This the real estate developer may do by pointing out, for example, that the allottee who has knocked at the doors of the NCLT is a speculative investor and not a person who is genuinely interested in purchasing a flat/apartment. They can also point out that in a real estate market which is falling, the allottee does not, in fact, want to go ahead with its obligation to take possession of the flat/apartment under RERA, but wants to jump ship and really get back, by way of this coercive measure, monies already paid by it. Given the above, it is clear that it is very difficult to accede to the Petitioners' contention that a wholly one-sided and futile hearing will take place before the NCLT by trigger-happy allottees who would be able to ignite the process of removal of the management of the real estate project and/or lead the corporate debtor to its death. …”