Subbaiya chithambaram vs IDBI Bank Ltd

Dr. Alok Srivastava, Member (Technical)

This appeal has been filed by the  Appellant aggrieved by Impugned Order dated 16.1.2020 passed by the Adjudicating Authority (National Company Law Tribunal, New Delhi) in CA-70/2019 & CA-71(PB)/2019 in (IB)77/ALD/2017 under section of 61 of Insolvency and Bankruptcy Code, 2016 (in short "IBC").

The Appellant has stated that he is a senior citizen, long retired, and that he had put in his hard earned money in booking of a flat in the project of Jaypee Infratech Ltd.. After paying the full cost of the flat that is still incomplete, he is seeking refund of the amount deposited with Jaypee Infratech Ltd. His application was declined by the Impugned Order on the ground that there is no recourse under law to refund the claimed amount during the CIRP period, and also that if such a payment is made, it would be preferential payment to an allottee which is not permitted in law.

The relevant portion of the Impugned Order passed by the Adjudicating Authority is as follows:-

"Since the sum and substance of the application is refund of money paid for the allotment of a house, the point to be seen herein is, as to whether the IRP or the RP, as the case may be, is entitled to refund the money to any of the allottees during the CIRP period.

Once CIRP period is commenced, it has to be construed as calm period, in which, the IRP is supposed to maintain status quo position until the resolution Plan is approved or the company is sent for liquidation.

Therefore, the question of refunding allotment to one of the allottees will not arise during the CIR period, whereby this application is hereby dismissed with liberty to proceed in accordance with law."

During  hearing  of  this  appeal,  the  Appellant  had  sought transfer of this appeal to the Hon'ble Supreme Court so that it could be heard along with similar petitions on the same matter.

The  Appellant  thus  filed  T.P.  (Civil)  No.  1058/2020  before  the Hon'ble Supreme Court in which order was delivered on 12.11.2021.

IA  No.  95616/2020  (which  is  application  for  stay)  and Transfer  Petition  (Civil)  No.  1058/2020  both  preferred  by  the Appellant before Hon'ble Supreme Court were disposed off by the Hon'ble Supreme Court on 12.11.2021 by the following order:-

"In light of the decision dated 24.03.2021 in Civil Appeal No. 3395 of 2020 titled as Jaypee Kensington Boulevard Apartments Welfare Association & Ors. Vs. NBCC (India) Ltd. & Ors. reported in 2021 (5) SCALE 142, nothing more is required is to be in this petition and the same is disposed of.

Pending applications, if any, stand disposed of."

In written submissions submitted by the Appellant, he has claimed that the cut off date for claiming refund is 9.8.2017 as per order dated 24.3.2021 of Hon'ble Supreme Court in Civil Appeal No. 3395 of 2020. He has also claimed that his claim for refund was submitted to the Interim Resolution Professional before 9.8.2017 and therefore, he is eligible to get full refund. He has also attached statement of accounts as on 9.8.2018 maintained by the CD, wherein the details of amount paid by the Appellant are available (attached at pp.27-29 of Appeal paper book). He has further annexed e-mail dated 29.11.2018 from the Interim Resolution Professional regarding admission of his claim.

The Learned Counsels for the parties were heard in the appeal and their pleadings and written submissions perused by us.

In  arguments,  the  Learned  Counsel  for  Appellant  has claimed that the Appellant is a senior citizen of advanced age, who had put all his life savings to purchase a flat in the said project of Jayee Infratech Ltd.. He has suffered some personal tragedies in his life and does not now want a completed flat. Instead he has requested for full refund of the money deposited by him with the promoters of the project.

The  Learned  Counsel  for  IRP  (Respondent  No.  2)  has submitted that after the captioned appeal was transferred to Hon'ble Supreme Court as Transfer Petition bearing T.P. (Civil) No. 1058 of 2020, which was disposed off by the order dated 12.11.2021 (supra) of the Hon'ble Supreme Court nothing remains in this appeal. He has further submitted that the revised Resolution Plan submitted by NBCC and Suraksha and the Committee of Creditors in its commercial wisdom approved the Resolution Plan dated 7.6.2021 read with addendum dated 09.06.2021 submitted by Suraksha, and the Resolution Plan is now pending adjudication before the Hon'ble Adjudicating Authority. Therefore, he has contended there is no need to interfere with the Impugned Order and the appeal may be dismissed.

The CIRP of Jaypee Infratech Ltd. (Corporate Debtor) was going on when the Appellant submitted his request for refund. According to the provisions of IBC, the claim of the Appellant shall be settled in accordance with relevant provision in the approved Resolution Plan of the Corporate Debtor.

A perusal of the Impugned Order makes it clear that it was passed by the Adjudicating Authority during the currency of the CIRP and the prayer of Appellant for full refund, while the CIRP was going on, was declined. In view of the disposal of T.P. (Civil) No. 1058 of 2020 and also the fact that now the Resolution Plan of the Jaypee Infratech Limited approved by the Committee of Creditors is pending approval of the Learned Adjudicating Authority, it is clear that the Impugned Order has lost relevance.. The Appellant will be entitled to receive his rightful dues as contained in the Resolution Plan once it is approved by the Adjudicating Authority.

In case refund of the deposited amount with interest does not accrue to the Appellant as per the provisions of the Resolution Plan after its approval by the Adjudicating Authority, and looking to the circumstances of this case and the indigent condition of the Appellant, we leave it open to the Successful Resolution Applicant to consider the request of Appellant for refund of the amount deposited by him along with interest.

The appeal is thus disposed of.  No order as to costs.