Indiabulls Housing Finance Ltd vs Rudra Buildwell Projects Pvt Ltd

Indiabulls Housing Finance Ltd., Having its Registered Office at M-62 & 63, First Floor, Connaught Place, New Delhi-110001. Appellant

Versus

Rudra Buildwell Projects Private Ltd, D-53, Okhla, Phase I, New Delhi-110020 Respondent

Present: Mr. Sumesh Dhawan with Ms Vatsala Kak, Advocates for Appellant.

Mr. P.K. Sachdeva, Advocate for Respondent.

JUDGEMENT

SUDHANSU JYOTI MUKHOPADHAYA, J

Indiabulls Housing Finance Ltd, appellant, (financial creditor) (IHFL)

has preferred this appeal challenging the order dated 30.11.2018 passed by

the Adjudicating Authority (National Company Law Tribunal), Special Bench,

New Delhi rejecting the application under Section 7 of the Insolvency and

Bankruptcy Code, 2016 (I&B Code) filed by the appellant.

Company Appeal (AT) (Insolvency) No.172/2019 2

2. The question arises for our consideration is whether appellant,

Indiabulls Housing Finance Ltd, can claim to be a 'Financial Creditor' of

Respondent, Rudra Buildwell Projects Pvt Ltd (Corporate Debtor). The case of

the appellant is that as per request of the borrower, Sh Devender Singh and

Ms Sushma Rajput, the appellant sanctioned loan of Rs.74,20,160/- on 6th

April, 2015. The loan agreement was executed between appellant and the

borrower on 6th April, 2015 and the aggregate loan amount sanctioned vide

said loan agreement dated 06.04.2015 was for Rs.73,23,391/-.

3. In addition a tripartite agreement dated 6.4.2015 was also executed

between the appellant, Corporate Debtor and the Borrower. According to

appellant in terms of the tripartite agreement dated 6.4.2015 the borrower

and the Corporate Debtor are jointly and severally liable for payment of the

Pre-Equated Monthly Instalment interest till commencement of the Equated

Monthly Instalment. The Corporate Debtor has repaid a sum of Rs.1,26,940/-

vide cheque dated 29th March, 2018 and another sum of Rs.63,470/- vide

cheque dated 31st May, 2018. It was alleged that the borrowers and the

corporate debtor have failed to maintain the financial discipline and have

defaulted in the payment of the Pre-Equated Monthly Instalment

interest/Equated Monthly Instalment in terms of loan agreement and

tripartite agreement. The Adjudicating Authority taking into consideration

the aforesaid fact held that the application filed under Section 7 of I&B Code

is not maintainable against M/s Rudra Buildwell Projects Private Ltd, the said

respondent having not taken loan from the appellant.

4. From the record and the agreement dated 6th April, 2015, we find that

one Mr Davendra Singh son of Shri Rajendra Singh, R/o B-441, Gali No.5,

Company Appeal (AT) (Insolvency) No.172/2019 3

Majlis Park, Azadpur, Delhi-110033 had taken loan from appellant, Indiabulls

Housing Finance Ltd. The said agreement makes it clear that Mr. Davendra

Singh is the borrower and the appellant, Indiabulls Housing Finance Ltd is

the financial creditor. As per the tripartite agreement dated 6th April, 2015,

the borrowers informed the appellant about the scheme of arrangement

between the borrower and the builder in terms whereof the builder assumed

the liability on account of interest payable by the borrower to the IHFL during

the period to be referred to as the "Liability Period" in terms of 24 months i.e.

till 30th April, 2017 (Clause 4 of Tripartite Agreement dated 6.4.2015). As the

builder in terms of the said agreement assumed the liability of interest payable

by the borrower to the IHFL for the period till 30th April, 2017 paid the amount

in favour of the IHFL, as noticed above. Section 5(7) of Insolvency &

Bankruptcy Code, 2016 defines "financial creditor" whereas Section 5(8) of

Insolvency and Bankruptcy Code, 2016 defines "financial debt" which reads

as follows:

"5(7) "financial creditor"-means any person to whom a financial

debt is owed and includes a person to whom such debt has been

legally assigned or transferred to;

5(8) "financial debt" means a debt alongwith interest, if any,

which is disbursed against the consideration for the time value

of money and includes-

a) Money borrowed against the payment of interest;

b) Any amount raised by acceptance under any acceptance credit

facility or its de-materialised equivalent;

Company Appeal (AT) (Insolvency) No.172/2019 4

c) Any amount raised pursuant to any note purchase facility or

the issue of bonds, notes, debentures, loan stock or any similar

instrument;

d) The amount of any liability in respect of any lease or hire

purchase contract which is deemed as a finance or capital

lease under the Indian Accounting Standards or such other

accounting standards as may be prescribed;

e) Receivables sold or discounted other than any receivables sold

on non-recourse basis;

f) Any amount raised under any other transaction, including any

forward sale or purchase agreement, having the commercial

effect of a borrowing;

g) Any derivative transaction entered into in connection with

protection against or benefit from fluctuation in any rate or

price and for calculating the value of any derivative

transaction, only the market value of such transaction shall

be taken into account;

h) Any counter-indemnity obligation in respect of a guarantee,

indemnity, bond, documentary letter of credit or any other

instrument issued by a bank or financial institution;

i) The amount of any liability in respect of any of the guarantee

or indemnity for any of the items referred to in sub-clauses (a)

to (h) of this clause;

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5. In terms of Clause 5(8) of I&B Code, if disbursement is made for

consideration of time value of money, a person can claim to be a financial

creditor with regard to amount paid.

6. Admittedly the appellant, IHFL, has disbursed the amount for

consideration of time value of money in favour of borrower, Mr. Davender

Singh and not to the builder. Therefore, the Adjudicating Authority has

rightly held that Rudra Buildwell Projects Pvt Ltd is not the corporate debtor

of the appellant and the application under Section 7 of I&B Code is not

maintainable.

7. In absence of any merit, the appeal is dismissed. No costs.

(Justice S.J. Mukhopadhaya) Chairperson

(Justice A.I.S. Cheema) Member (Judicial)

(Kanthi Narahari) Member (Technical)

Dated:14-05-2019

New Delhi

Bm

Company Appeal (AT) (Insolvency) No.172/2019