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Judgment
ORDER
This application has been filed by Navneet Kumar Ranka and others under Section 60(5) of Insolvency and Bankruptcy Code 2016 r/w Rule 11 of NCLT Rules 2016 against Mr. Ramakrishnan Sadasivan Resolution Professional of M/s. Lokaa Developer Pvt. Ltd. & Another seeking the following reliefs,
i)To Pass an Order granting leave to the Applicants to intervene in IA(IBC) (PLAN)/11(CHE)2024 filed by the Respondent No.1/RP for approval of the said Resolution Plan submitted by the Respondent No.2/Resolution Applicant and to object to the approval of said Resolution Plan on the reasons particularly set forth in this instant application.
ii) To Pass an order to remand back the said Resolution Plan filed by the Respondent No. 2/Resolution Applicant and to include and treat the Intervenors/ Applicants as the same status on par with other allottees.
2. APPLICANT SUBMISSIONS:
The Applicants have stated that they had entered into a Sale and Construction Agreement with the Corporate Debtor and paid ₹50,00,000/- for a flat. It is stated that the Corporate Debtor failed to meet their obligations, hence the Applicants approached the Tamil Nadu Real Estate Regulatory Authority (TNRERA) and vide order dated 25.10.2023 in RCP/103/2023 TNRERA ordered the Corporate Debtor to refund ₹50,00,000 along with interest at 10.70% and ₹50,000/- as compensation, and to intimate the encumbrance created by the charge in the order to the sub registrar who created an encumbrance on the flat.
The Applicants have stated that vide order dated 07.06.2023 CIRP was initiated against the corporate debtor and the applicant filed the claim for Rs 82,60,000/- on 24.06.2024 to the Resolution Professional (RP), The applicants contend that the RP treated the claim as a "refund on cancellation" and misclassified the claims in the Information Memorandum (IM) and in plan documents. The Applicants submit that there was no voluntary cancellation of the flat and their rights arise out of a binding TNRERA order, which has not been challenged by the Corporate Debtor.
The applicants contend that as per the order, TNRERA provided a protective measure for the Applicants by creating an encumbrance over the flat in question, to remain in force until the Corporate debtor refunds the amount due.
It is stated that in the resolution plan submitted by “M one Flat owners Association” the payment qua the Applicants has been treated as contingent in nature, which the Applicants may realize only in the event of a successful outcome in the avoidance application filed by the Resolution Professional (RP), The applicants contend that the allottees under the RERA cannot be equated with the operational creditor hence they have filed the present application to place their objection on record and assert their rights over the encumbered flat.
3. RESPONDENT SUBMISSIONS:
It is stated that the Corporate Debtor Lokaa Developer Pvt Ltd ("CD") was admitted to CIRP by this Tribunal vide an Order dated 07.06.2024 in CP(IB)/124(CHE)/2023. The CD is involved in the development of real estate project. It is stated that the Apartment Buyers themselves formed an Association and have submitted a Resolution Plan which has been approved by the CoC.
It is submitted that the present Intervention application has been filed by Navneet Kumar Ranka & Babulal Ranka & Sons (HUF), purporting to be "Allotees" under an unregistered "Agreement of Sale" and an unregistered "Construction Agreement" both dated on 16.11.2017 in relation to Apartment No 1906. It is stated that the applicants had filed their claim to the RP on 24.06.2024 in Form CA for a principal sum of Rs.50,00,000/- Interest of Rs. 32,10,000/- and compensation of Rs.50,000/- total aggregating to Rs. 82,60,000/-.
It is stated that the applicant have relied on the order of TRERA dated 25.10.2023 in RCP no 103 of 2023 therefore the claim was classified as the “refund” in CIRP.
It is stated that the Resolution Professional has moved an Application IA/ 865/2025 bringing on record new facts and documents seeking directions from this Adjudicating Authority to set aside/annul the claims of the applicant.
It is stated that the Intervenors herein had voluntarily acquiesced to all the actions taken all along and at this stage they have no locus to intervene, nor do they have any ground to oppose the Plan.
4. FINDINGS OF THIS TRIBUNAL
We have heard Learned counsels for the parties and perused the document placed on record.
The applicants have sought for intervention in IA(IBC)(PLAN)/11(CHE)/2024 in CP(IB)/124(CHE)/2023, The applicants state that the applicants had entered into a sale and construction agreement with the corporate debtor, and paid a sum of Rs 50,00,000/- towards purchase of the flat.
The applicants have stated that the corporate debtor did not fulfil the obligations hence the applicants approached TNRERA, and TNRERA vide dated 25.10.2023 ordered as follows,
On perusal of TNRERA order dated 25.10.2023 in RCP No 103 of 2023, it is seen that it is an ex-parte order, where the direction has given to the corporate debtor to refund Rs 50,00,000/-. along with interest.
Subsequently the applicants filed the claim for Rs 82,60,000/- on 24.06.2024 to the resolution professional. The relevant portion of the claim submitted is extracted below,
It is seen that the applicants had filed the claim to RP in form CA giving the details of the debt which fell due i.e non-refund of the amount paid to the tune of Rs 50,00,000/- as per the payment schedule for the purchase of the apartment and as a consequence of failure to hand over the possession.
The RP categorised the claim filed by the applicants under the category of homebuyers who seek refund of the amounts paid by them against the cancellation of flat. The relevant portion is extracted below,
The most critical aspect of this intervention lies in the Intervenors' claim of being 'Home Buyers” and classification under the refund category, It is seen that the classification of the Intervenors into a "Refund Category" by the RP is based on claim filed by the applicant, for an amount of Rs 82,60,000.
On perusal of the resolution plan, it is seen that the Homebuyers in the refund category are dealt in the resolution plan as follows,
The RP that the RP has filed an application IA/865/2025 bringing on record the documents seeking direction from this tribunal for setting aside/annulling the claim of the applicants, stating that the amount paid by the applicant herein was not paid to the Corporate debtor instead it was paid to the suspended director.
In the instant case the Intervener have filed the claim relaying on TNRERA order and on the unregistered documents.
Applicants have placed reliance on the decision of Hon’ble supreme court, In the case of Vishal Chelani & Others vs. Debashis Nanda, Civil Appeal No. 3806 of 2023 and stated that allottees are to be treated as financial creditors and should not be subjected to undue classification, merely due to the existence of a RERA order. The relevant portion of the Hon’ble supreme court’s decision is extracted below,
The Resolution Professional’s view appears to be that once an allottee seeks remedies under RERA and opts for return of money in terms of the order made in her favour, it is not open for her to be treated in the class of home buyer. This Court is unpersuaded by the submission. It is only home buyers 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 within the meaning of Section 5(8)(f) (Explanation) and entitled to be treated as such along with other home buyers/financial creditors for the purposes of the resolution plan which is awaiting final decision before the adjudicating authority.
The decision of the Hon’ble supreme court lays down a proposition that once the allotee seeks recourse under RERA and secures an order in his favour, the allotee should be treated as homebuyers and not in any other category of financial creditor.
Facts of the present case are distinguishable from the facts of the case referred supra. In the present case, the agreement to sale and construction agreement are the unregistered documents. The payment was made to the suspended director and not to the corporate debtor meaning thereby that there was no privity of contract, between the applicant and Corporate debtor as the consideration was not paid to the corporate debtor, A per the Indian Contract Act 1872 a contract without consideration is void under section 10 & 25.
It is seen that in the suit filed before TNRERA, the applicants had made Corporate Debtor as the respondent, but since it was set ex-parte, the facts couldn’t have been brought to the notice of the Corporate debtor. Further there was no NOC from LIC, and the allotment was cancelled, The apartment no 1906 was encumbered with LIC Housing and couldn’t have been sold to the applicants without the NOC from LIC Housing. Prior to TNRERA order, the apartment was sold and registered in the name of another homebuyer, Hence RP classified the claim filed by the applicants under the refund category. The Intervenors do not have valid allotment as against the apartment no 1906. There is no NOC from LIC housing, It was sold to third party which fact was not brought to the knowledge of TNRERA, It was submitted to TNRERA that they wanted refund of the amount paid, This Tribunal also takes note of the fact that the applicants have no title to the allotted property as they have not complied with the process of allotment and registration of the property, Further the intention of the applicant to approach TNRERA was to obtain refund for the money paid which has been challenged by RP in IA/865/2025.
It is to note that consequent to CIRP of the Corporate debtor there cannot be any encumbrance on the assets of CD and all the claims are to be dealt as per section 53 of IBC.
In the present case after issuing of NOC the flat was sold to the other buyer, who has been treated as homebuyer in the plan. We are of the view that the applicants cannot be categorised as financial creditor. Further the RP has filed an application for nullifying the claim of the Applicants. That being the position, the Applicants cannot be allowed to intervene in the Resolution plan.
For the above-mentioned reasons, we don’t find tenable reasons for applicants to intervene in IA(IBC)(PLAN)/11(CHE)/2024 in CP(IB)/124(CHE)/2023. Therefore INV.P.(IBC)/5/2025 is Dismissed and disposed of, No order as to costs.