Gajraj Jain & Ors vs Shivgyan Developers Pvt. Ltd

Gajraj Jain & Ors. ...Appellants Vs Shivgyan Developers Pvt. Ltd. ....Respondent Present: For Appellants: Mr. Piyush Singh, Mr. Nithin Chandran and Mr. Sumbul Ismail, Advocates. For Respondent:

ORDER

18.11.2019: The Appellant claiming to be allottee filed application under

Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to

as 'I&B Code') for initiation of Corporate Insolvency Resolution Process against

'M/s Shivgyan Developers Pvt. Ltd.' (Corporate Debtor). It is stated that the

Corporate Debtor failed to handover the possession of residential unit by

31st March, 2017 as per the agreement and not paid the compensation.

2. The Adjudicating Authority (National Company Law Tribunal), Jaipur

Bench, Rajasthan by impugned order dated 11th October, 2019 rejected the

application taking into consideration the submission made by the Corporate

Debtor as quoted below:-

"9. During the course of proceeding an opportunity was

given to the Financial Creditors to exercise their option for

taking possession. They have refused it on grounds that -2-

they are no longer interested in the said units, especially

since the Occupancy Certificate has not been granted in

respect of the project by the Competent Authority. It is

further submitted that the flat is not habitable.

10. Per contra, ld. counsel for the Corporate has

submitted that the process for procuring the Occupancy

Certificate had been initiated way back in the year 2017

itself. For reasons whatsoever on account of technicalities,

the said Occupancy Certificate/ Completion Certificate has

not been granted for want of certain formalities, but it is

noticed that the same is in process. Various photographs of

the flats in question, the completed towers and surrounding

areas give rise to a reasonable surmise that the project is in

a habitable condition. The photographs of he concerned units

show that they are ready to be occupied. Learned counsel

for the respondent has also submitted that a number of flats

are already occupied and sale deeds have been executed in

favour of allottees. We find no reasons for the Financial

Creditors to resist taking possession and insist only on

refund, or on initiation of CIR Process for the alleged failure to

Company Appeal (AT) (Insolvency) No. 1265 of 2019 -3-

complete the project on time or for want of the Completion

Certificate. The photographs reflect that the flats are in a

habitable condition. Moreover, defaults or dissatisfaction in

the construction, if any, can be pointed out to the respondent

for rectification, if required. The submission of the

respondent that possession of several flats has been taken

and are being occupied by the allottees has not been

repudiated by the petitioners. Clearly the facts of this case

point to an arm-twisting tactic. The initiation of Corporate

Insolvency Resolution Process is a serious matter and cannot

be resorted to by any disgruntled customer. There are other

means of redressing their grievances, if they are in respect of

lack of adequate quality of construction etc."

3. Learned counsel for the Appellant submits that the Corporate Debtor has

not offered for legal possession and in absence of the Occupancy Certificate/

Completion Certificate registration cannot be made.

4. Having heard learned counsel for the Appellant and taking into

consideration the fact that the Corporate Debtor has completed the project but

in absence of Occupancy Certificate/Completion Certificate, which has not

Company Appeal (AT) (Insolvency) No. 1265 of 2019 -4-

been granted for want of certain formalities, while we are not inclined to

interfere with the impugned order dated 11th October, 2019, expect that the

Corporate Debtor will get the Occupancy Certificate/ Completion Certificate

from the appropriate authority immediately.

5. The Appellant may bring this order to the notice of the Competent

Authority, who is expected to issue Occupancy Certificate/ Completion

Certificate on an early date on completion of formalities, if any, to be completed

by the Corporate Debtor. The appeal stands disposed of with aforesaid

observations. No costs.

[Justice S. J. Mukhopadhaya] Chairperson

[Justice Bansi Lal Bhat] Member (Judicial)

[Justice Venugopal M.] Member (Judicial) am/sk

Company Appeal (AT) (Insolvency) No. 1265 of 2019