Mayank Dhamania vs M/S Ans Apartment Pvt. Ltd

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NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI Company Appeal (AT) (Ins.) No. 124 of 2021 IN THE MATTER OF: N.P. DHAMANIA R/o: Flat D 2101, Aakriti Shantiniketan, Plot GH 0/1B, Sector 143B, Noida UP- 201305 .... Appellant

Vs. M/S ANS APARTMENTS PVT. LTD. Off: Shop No. 108, 1st Floor, Vardhman Mayur Market, Mayur Vihar Phase - III, Delhi - 110096 Through Resolution Professional: Mr. Ram Phal Bhardwaj 310/25, Onkar Nagar - B, Tri Nagar, Delhi 110035 ...Respondent

For Appellant: Mr. Partha Sil, Mr. Tavish Bhushan Prasad, Advocates. For Respondent: Mr. Mohit Nandwani, Advocate for RP. Mr. RP Bhardwaj, RP. Mr. Himanshu Lilani, Mr. Rishi Gujral, Mr. GP Madaan, Mr. Aditya Madaan, Advocates for Resolution Applicant. WITH Company Appeal (AT) (Ins.) No. 125 of 2021

IN THE MATTER OF: MAYANK DHAMANIA S/o. Rakesh Dhamania R/o: Flat D 21:01,

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Aakriti Shantiniketan, Plot GH O/LB, Sector 143B, Noida UP-201305 ....Appellant

Vs. M/S ANS APARTMENTS PVT. LTD. Off: Shop No. 108, 1st Floor, Vardhman Mayur Market, Mayur Vihar Phase - III, Delhi - 110096 Through Resolution Professional: Mr. Ram Phal Bhardwaj 310/25, Onkar Nagar - B, Tri Nagar, Delhi 110035 ...Respondent

For Appellant: Mr. Partha Sil, Mr. Tavish Bhushan Prasad, Advocates. For Respondent: Mr. Mohit Nandwani, Advocate for RP. Mr. RP Bhardwaj, RP. Mr. Himanshu Lilani, Mr. Rishi Gujral, Mr. GP Madaan, Mr. Aditya Madaan, Advocates for Resolution Applicant.

JUDGMENT

Jarat Kumar Jain: J.

These Appeals are preferred against the Judgment dated 17.11.2020

passed by the Ld. Adjudicating Authority, Principal Bench, New Delhi in I.A.

No. 4885 of 2020 and I.A. No. 4564 of 2020 in CP (IB) No. 1481 (PB) of

2019. Whereby dismissed the Applications filed by NP Dhamania and

Mayank Dhamania respectively.

2. Brief facts of these Appeals are that M/s ANS Apartments Pvt. Ltd.

(ANS) Corporate Debtor (Respondent) proposed to develop a Residential

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Project of 16 Multi-Storied Towers with Project name "Alstonia" at Plot No.

10, Sector Pi-2, Greator Noida, UP. Due to financial constraints, ANS could

not complete the project and therefore, ANS entered into a written MOU

dated 03.12.2012 with Rajput Properties & Developers Pvt. Ltd. (RPD) to

complete the construction of 5 towers i.e. D, E, F, G and K. As per the MOU,

RPD has to carry out the entire construction and internal development. The

ANS has already incurred a cost of construction Rs. 17,03,55,527/-. It was

agreed that RPD will make payment of aforesaid amount to the ANS within

12 months as per the schedule. As per the clause 17 of the MOU, RPD is

entitled to sell its share of saleable area directly and collect all dues in

favour of ANS Apartments Pvt. Ltd. A/c Shri Rajneegandha Greens

(Dedicated Joint Signatory Account) and the amount will be transferred to

RPD as per mutually agreed mechanism. As per Clause 22 of the MOU, RPD

is entitled to construct and market flats to its share in the project site in the

name and style of Shri Rajneegandha Greens. The RPD decided to offer a

unique self-finance scheme to sell the flats at a notional rate of Rs. 3,600

psf. Under the said scheme the Appellants NP Dhamania and Mayank

Dhamania booked Flat No. 1003 and Flat No. 1002 in tower -E and each

Appellant deposited Rs. 30,05,659/- to RPD. Subsequently, on 23.08.2013

the MOU dated 03.12.2012 was terminated and it was agreed between ANS

and RPD that the RPD had carried out the construction worth Rs.

2,16,06,850/- and RPD has given Rs. 51,00,000/- security deposit to ANS

at the time of execution of MOU. The total balance amount payable to RPD

Rs. 2,50,000/-. It is also settled that ANS will settle the accounts of the RPD

as per terms of the relevant clause of MOU dated 03.12.2012 and ANS shall

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free to deal with the said project in any manner whatsoever and the RPD

shall not claim any profit or compensation from ANS on the basis of prior

dealing between the parties.

3. The Appellants have also filed Consumer Compliant No. 341 of 2014

and 342 of 2014 before the State Consumer Disputes Redressal

Commission. These proceedings are still pending before the State

Commission.

4. Subsequently, CIRP initiated against the ANS and Mr. Ram Phal

Bhardwaj was appointed as IRP. On 28.01.2020 both the Appellants have

filed their claims before the IRP. However, IRP has rejected the claims of the

Appellants holding that there is no proof showing that they have entered

into an agreement with ANS (Corporate Debtor/Respondent) or paid money

to ANS for allotment of flats. Being aggrieved both the Appellants have filed

Applications I.A. No. 4885 of 2020 and I.A. No. 4564 of 2020 before the

Adjudicating Authority and Ld. Adjudicating Authority by the impugned

order dated 17.11.2020 dismissed both the Applications on the ground that

none of the documents relied upon by the Appellants reflecting any kind of

jural relationship between the Appellants and ANS.

5. Being aggrieved with the order, the Appellants have filed these

Appeals.

6. Ld. Counsel for the Appellant submitted that the Ld. Adjudicating

Authority failed to take into consideration the definition of claim and debt.

The Hon'ble Supreme Court in the case of Pioneer Urban Land and

Infrastructure Limited Vs. Union of India &Ors. (2019) 8 SCC 416 held that

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any claim which arises, even if there is breach of contract, notwithstanding

that there is no adjudication of the said breach falls within the definition of

claim as defined under Section 3 (6) of the Insolvency and Bankruptcy Code,

2016 (IBC).

7. Ld. Counsel for the Appellant submitted that the MOU dated

03.12.2012 is in the nature of agency. For this purpose, he drew our

attention towards the different clauses of the MOU and clause 6 of deed of

termination of the MOU and submitted that the terms clearly show that the

right, title and interest of the project land was agreed to be retained by the

ANS (Respondent/Corporate Debtor). Minutes of meeting dated 15.04.2013

would show that ANS was only authorised to issue allotment letter.

Therefore, ANS being a principal is bind by the acts of his agent RPD and

obliged to honour the terms and conditions agreed between the Appellants

and RPD.

8. Ld. Counsel for the Appellants further submitted that the MOU

dated 03.12.2012 is not a collaboration agreement but an agency

agreement. The Hon'ble Supreme Court in the case of Faqir Chand Gulati vs

Uppal Agencies Pvt. Ltd. & Anr (2008) 10 SCC 345 has specifically dealt with

meaning of joint venture/development agreement/collaboration agreement

and held important features of such agreement. In the light of the Judgment

of Hon'ble Supreme Court if we examined the facts of the present case, in

the agreement, there is no element of sharing of profits and losses between

ANS and RPD and no mutual accountability in the said project to each

other. As per the clause 6 of deed of termination of MOU all assets liability

and obligation of the project have reverted back to ANS

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(Respondent/Corporate Debtor) which means any liability arising out of

breach of contract between the RPD and prospective home buyers will now

be the liability and obligation of the ANS.

9. It is submitted that ANS in the Reply Affidavit has not specifically

denied its liability in respect of the allotment to the Appellants. Thus, it is

deemed liability of the ANS. It is also submitted that it is settled principle of

law that if a person has a right, he cannot be left remediless. Ld.

Adjudicating Authority has erroneously held that the Appellants have failed

to prove jural relationship with ANS. Therefore, the impugned order is liable

to be set aside and the Appeals may be allowed.

10. On the other hand, Ld. Counsel appearing on behalf of the

Respondent (ANS) submitted that the MOU is akin to a collaboration

agreement where ANS was the owner of the land and RPD was to develop

and complete the project at its own cost and in return was allotted saleable

area in the project. As per clause 17 of MOU, the RPD had compete freedom

to sell its share of saleable area directly and collect all dues. It is submitted

that the MOU does not create any agency between the RPD and ANS. Clause

42 of the MOU specifically provides that the MOU shall not be deemed to

constitute a partnership between the parties and they shall not be agent of

the other. Therefore, ANS is not liable for any actions/failures of RPD. As

RPD was not the agent of ANS. Hon'ble Supreme Court in the case of Nabha

Power Limited Vs. Punjab State Power Corporation Limited & Anr. (2018) 11

SCC 508 in para 49 of the Judgment held that explicit terms of a contract

are always the final word with regards to the intention of the parties. In para

72 of the Judgment it was observed that it should not be an endeavour of

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commercial courts to look to implied terms of contract. Normally, a contract

should be read as it reads, as per its express terms.

11. Ld. Counsel for the Respondent further submitted that admittedly

the Appellants have paid amounts to RPD for allotment of units in project

Shri Rajneegandha Greens which as per the said MOU constitutes of the

area allowed to RPD. The rights and liabilities with respect to this project are

on account of RPD and even otherwise RPD undertook to indemnify ANS

against any claim of allottees like the Appellants. Since, the payments were

made to RPD for allotment of unit, in case of any dispute between RPD and

ANS, the remedy of Appellants would lie against RPD. Ld. Adjudicating

Authority has rightly held that there is no jural relationship between the

Appellants and ANS (Respondent). Thus, the Appeals are liable to be

dismissed.

12. After hearing Ld. Counsels for the parties, we have minutely

examined the documents on record.

13. Following issues arise for our consideration.

(a) Whether RPD being agent of ANS collected the part sale

consideration from the Appellants?

(b) Whether there is jural relationship between the

Appellants and ANS?

Issue No. (a)

Whether RPD being agent of ANS collected the part sale consideration from

the Appellants?

14. We have considered the MOU, on 03.12.2012 ANS entered into a

MOU with RPD to complete the construction of five towers i.e. D, E, F, G &

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K. ANS has already incurred the construction cost of Rs. 17,03,55,527/-. It

was agreed that RPD shall complete the construction and for the due

performance of the contract, RPD agreed to pay interest free security

amount of Rs. 5 Crores in four instalments to ANS (as shown in clause 13 of

MOU) and also agreed to pay already incurred cost of Rs. 17,03,55,527/- to

ANS within 12 months in four instalments (as shown in clause 6 of the

MOU). Clause 17 of the MOU provides that RPD shall sell its share of

saleable area directly and collect all dues in favour of ANS and deposit in the

A/c Shri Rajneegandha Greens (Dedicated Joint Signatory Account) and the

said amount will be transferred to RPD as per mutual agreed mechanism.

15. Clause 22 of the MOU provides that RPD shall construct and market

flats to its share in the project site in the name and style of Shri

Rajneegandha Greens. Clause 31 of the MOU provides that RPD and ANS

both parties shall collect the sale proceeds from the sale of their respective

areas in the name of ANS Apartments Pvt. Ltd. A/c Shri Rajneegandha

Greens only. Clause 42 of the MOU provides that this MOU shall not be

deemed to constitute a partnership between the parties hereto nor shall

make one an agent of the other. The parties shall have individual liabilities

for their taxes.

16. The MOU is an admitted document between the parties. There is the

explicit terms and conditions of the MOU that the MOU shall not be deemed

constitute a partnership between the parties hereto nor shall make one an

agent of the other. Thus, we are unable to convince with the argument of Ld.

Counsel for the Appellants that RPD has collected the amount from the

Appellants being an agent of ANS. Actually, this is an agreement to complete

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the construction of five towers i.e. D, E, F, G & K and after completion of

construction, RPD and ANS were free to sell their saleable area directly and

collect the consideration. However, they have to deposit the sale proceeds

from the sale of their respective areas in the account in the name of ANS

Apartments Pvt. Ltd. A/c Shri Rajneegandha Greens only.

Issue No. (b)

Whether there is jural relationship between the Appellants and ANS?

17. To prove this fact, the Appellants have placed reliance on following

documents:-

i. MOU 03.12.2012 ii. Minutes of Meeting 15.04.2013 iii. Minutes of Meeting 15.04.2013 iv. Termination of Deed of MOU 23.08.2013 v. Letter send by RPD to ANS 18.02.2014 for issue of credit note. vi. Request by RPD to ANS 18.02.2014 for issuing allotment letter in favour of the Appellants.

18. We have considered the relevant clauses of MOU, clause 17 and 31

of the MOU provides that RPD shall sell its share of saleable area directly

and collect all dues in favour of ANS Apartments Pvt. Ltd. A/s Shri

Rajneegandha Greens (Dedicated Joint Signatory Accounts) and the same

will be transferred to RPD as per mutually agreed mechanism. It is also

agreed that both the parties shall collect the sale proceeds from the sale of

their respective areas in the name of ANS Apartments Pvt. Ltd. A/c Shri

Rajneegandha Greens only. After execution of MOU between ANS and RPD,

there was a meeting held on 15.04.2013 in which documentation and

allotment procedure is decided. Thereafter, another meeting was held on

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11.05.2013. The Minutes of the meeting is Annexure A-4. The Minutes

which are relevant for the purpose of these Appeals are as under:-

"1......

2......

3. All proceeds of dues from flats of tower G,F,K,D,&E will henceforth be deposited in joint A/c ANS Apartments Pvt. Ltd. A/c Shri Rajneegandha Greens and statement will be provided to RWA at the end of every month.

4......

5......

6......

7......

8. List of all flats allotted to Shri Rajneegandha Greens will be made available to RWA and whenever any refund is made will be made known to RWA."

19. From the aforesaid documents as per terms of MOU and Minutes of

meeting, RPD was free to sell its share of saleable area directly and collect all

dues in favour of ANS and the same is required to be deposited in the bank

A/c of Shri Rajneegandha Greens (Dedicated Joint Signatory Account). As

per the minutes of meeting dated 15.04.2313, the RPD was required to send

printed agreement in triplicate pre-signed by the costumers to ANS and ANS

was required to return two copies with in two working days. There is no such

flat buyer agreement placed on record. In clause 3 of minutes of meeting

dated 11.05.2013 the same condition was reagitated in the minutes of

meeting and no document has been placed on record to show that the list of

all flats allotted to Shri Rajneegandha Greens be made available to RWA.

20. Now we have considered the letter dated 18.02.2014 sent by RPD to

ANS for issue of credit note in favour of the Appellants and request by RPD

to ANS for issuing allotment letters in favour of the Appellants dated

18.02.2014. For ready reference, the copies of these letters are as under:-

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21. On perusal of these letters, it is apparent that RPD has collected the

part consideration i.e. Rs. 30,05,659/- from each Appellant for booking flats

and deposited the same in their bank A/c i.e M/s Rajput Properties and

Developers Pvt. Ltd. In the aforesaid letter, RPD requested the Director ANS

for issue of credit note of the aforesaid amount in favour of the Appellants

and it is stated that the amount deposited by the Appellants will be adjusted

against the full and final bill of construction. There is another letter dated

18.02.2014 as aforesaid in which details of amount received from the

Appellants by RPD is mentioned and the same has been deposited in the

bank A/c of RPD. It is stated that the amount will be deducted from the due

cost at the time of final settlement between RPD and ANS. It is requested

that the allotment letters be issued in favour of the Appellants. Thus, it is

clear that part consideration has been collected from the Appellants but the

same has not been deposited by the RPD in the A/c of Shri Rajneegandha

Greens as per clause 17 and 31 of the MOU. There is nothing on record to

show that in response to these letters ANS has issued credit note and

allotment letters in favour of the Appellants.

22. With the aforesaid discussion, we are of the considered view that

RPD has not deposited the amount collected from the Appellants in the A/c

of Shri Rajneegandha Greens as agreed terms of the MOU and therefore, the

ANS has not issued any credit note/allotment letters in favour of the

Appellants. Thus, Ld. Adjudicating Authority has rightly held that there is

no jural relationship between the Appellants and ANS. The RPD has not

collected the part sale consideration from the Appellants as an agent of ANS.

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23. With the aforesaid, we are of the view that the RP as well as Ld.

Adjudicating Authority has rightly rejected the claims of the Appellants.

Hence, no interference is called for in the impugned order dated 17.11.2020.

Thus, these Appeals are dismissed. However, no order as to costs.

[Justice Ashok Bhushan] Chairperson

[Justice Jarat Kumar Jain] Member (Judicial)

[Dr. Ashok Kumar Mishra] Member (Technical)

New Delhi 18th November, 2021.

SC

Company Appeal (AT) (Ins.) No. 124 & 125 of 2021