Mr. Avinash Totade And Ors vs Sinew Developers Private Limited
- CitationCompany Appeal (AT) (Insolvency) No.1131 of 2023
Ratio decidendi
The rule this decision rests on
Where a Section 7 application is founded on a financial creditor's claim for interest under a RERA order, and the RERA authority has extended the time for completion of the real estate project, the Corporate Debtor is entitled to complete the project within the extended period, and a corporate insolvency resolution process is not warranted at that stage; the rejection of the application on that basis is therefore not an error. Recovery of interest under a RERA order remains available to the creditor through the mechanism provided by that order, and does not require initiation of insolvency proceedings under Section 7. A financial creditor may file a fresh Section 7 application if a new cause of action or event arises; the dismissal of the present application does not bar such a fresh filing.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Avinash Totade & Ors. ...Appellants
Versus
Sinew Developers Pvt. Ltd. Respondent
Present: For Appellants: Mr. Aayush Agarwala, Mr. Siddharth Nahata, Advocates. For Respondent:
ORDER
13.09.2023: There is delay of 14 days in filing the Appeal. Learned counsel for the Appellants submits that there are eight Appellants who were situated at different places at the time of filing the appeal, therefore, delay occurred in filing the appeal. Cause shown sufficient, delay in filing the appeal is condoned. I.A. No. 3941 of 2023 stands disposed of.
2. This Appeal has been filed against order dated 19.05.2023 passed by the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench by which Section 7 application filed by the Appellants has been rejected. Appellants claim to be Financial Creditors of the Corporate Debtor who had filed a complaint to Maharashtra RERA, where the Maharashtra RERA has passed order directing the Corporate Debtor to pay interest at prescribed rate. The Appellants' case is that interest has not been paid as agreed and the project is not completed, hence, application was filed so that project may be completed by some other entity. The Adjudicating Authority rejected the application observing that RERA has extended time for completion of the real estate project to 03.12.2023 and the proceedings for recovery of the interest could not be entertained under Section 7.
Cont'd.../ -2-
3. We have heard learned counsel for the Appellants and perused the record.
4. Admittedly, the time for completion of the project has been extended till 03.12.2023 by RERA, hence, the resolution of the Corporate Debtor at this stage is not warranted and Corporate Debtor is entitled to complete the project till the time RERA has granted extension i.e. 03.12.2023.
5. Insofar as decree in favour of the Appellants regarding recovery of interest, it is always open for the Appellant to recover interest as per order of the RERA. We are of the view that no error has been committed by the Adjudicating Authority in rejecting Section 7 application.
6. We, however, of the view that it shall be open for the Appellant to file fresh Section 7 application if any cause and event arises.
7. Learned counsel for the Appellant submits that even by 03.12.2023 the project shall not be completed. We cannot assume that project shall not be completed before the date of completion has come.
8. We dismiss the Appeal.
[Justice Ashok Bhushan] Chairperson
[Barun Mitra] Member (Technical) Archana/nn
Company Appeal (AT) (Insolvency) No.1131 of 2023
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