Naman Infradevelopers Private Limited vs Metcalfe Properties Private Limited

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NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI COMPANY APPEAL (AT)(INS) No.74 of 2024 (Arising out of the Judgement dated 20.10.2023 passed by the National Company Law Tribunal, New Delhi Bench in CP No.105/ND/2023). In the matter of: Naman Infradevelopers Pvt Ltd 56, Rajpura Road, Behind HDFC Bank, Dehradun 248001 Appellant

Vs

Metcalfe Properties Pvt Ltd, KH No.154/470, V&PO Pooth Khurd, Delhi-110039. Respondent

For Appellant:Mr Rishi Sood, Mr Gurjot Singh, Mr Tushar Rathee, Advocatges.

JUDGEMENT

JUSTICE YOGESH KHANNA, MEMBER (JUDICIAL)

1. This is an appeal filed under Section 61 of the Insolvency & Bankruptcy

Code, 2016 against the impugned order dated 20.10.2023. The brief facts as

narrated in the Memo of Appeal and the impugned order are as under;-

a) The Appellant had approached the Corporate Debtor and had shown

its interest to buy residential plots in the PUDA approved colony

named Metcalfe Nirvana License No.LDC/DA/2011/5 dated

19.07.2011 situated at Village Bishamber Pura/Manawala/Jhitan

Kalan, Metcalfe Nirvana at Distt Amritsar. The agreement to sell was

executed between the parties on 10th March, 2012 and as per Clause

10 of the Agreement the sale deed was to be executed on or before

March, 2013. It was one of the conditions in case the seller fails to

execute the sale deed in favour of the purchaser, then the seller shall 2

be liable to return the entire amount received alongwith interest @

24% per annum from the date of payment of the amount till the

actual payment.

b) It is alleged by the Appellant he had made advance payment of Rs.5

crores through two cheques drawn on State Bank of India and the

balance payment was to be made by the purchaser when the seller

would be ready for registry of the plots. He paid some further

amounts too. Further the Appellant give him an option to effect the

registry of land project in their name and transferred a sum of Rs.50

lakhs on 21.10.2021. However, the Corporate Debtor failed to effect

the Registry and vide letter dated 25.02.2022 showed its inability to

transfer the land project and proposed to convert the outstanding

amount as loan and to repay the same with interest within four

months after entering into the Settlement agreement.

c) The Corporate Debtor allegedly agreed to pay Rs.14,91,57,539/-

alongwith 24% interest on or before 22.07.2022 and if the repayment

gets delayed then penal interest of 12% was also to be paid by the

Corporate Debtor. However, the default occurred and a petition was

filed by the Financial Creditor under Section 7 of the I&B Code,

2016.

2. The question which arose before the Adjudicating Authority (NCLT) was

if the Appellant was a Financial Creditor or Financial Institution as per

definition of the IB Code and if the petition was maintainable. . The Learned

Adjudicating Authority (NCLT) had passed an impugned order stating

interalia the debt owed to the Appellant is not a financial debt per Section 3

5(8) of the Code as the money was not disbursed as a loan with consideration

for the time value of money but was paid as an advance for purchase of

residential plots in the PUDA approved colony namely Metcalfe Nirvana.

Further it held the Appellant is not an allottee under Section 5(8)(f) but

would be a speculative buyer.

3. The Learned counsel for the Appellant, however, relied upon Venkat

Rao Marpina Va Vamuri Ravi Kumar and others Company Appeal

(AT)(CH)(Ins) No.134/2022 which in para 7 held as under:-

"7. Further, interpreting the Explanation added to Section 5(8) (f) of the

Code, the Court further held that allottees/homebuyers were included in

the main provision, i.e. Section 5(8)(f) with effect from the inception of the

Code. The advances given by Property buyers to real estate developer

will be considered as a 'borrowing' and such amounts raised from

allottees falls within the scope of Section 5(8)(f) of the Code. The

contention of the Learned Senior counsel that the allottee is a speculative

investor is unsustainable keeping in view that the 'interest' payable as

per Clause 3 of the Agreement of Sale is 'conditional' to not obtaining the

approval of HMDA."

4. Heard.

5. The judgement relied upon by the Appellant does not relate to the facts

of the case as the Appellant was never an allottee or a home buyer but was a

speculative buyer, hence would not fall within the purview of Section 5(8) of

the Code, hence we are in agreement with the order passed by the

Adjudicating Authority as it had rightly relied upon Mansi Brar Fernandes 4

Versus Sudha Sharma and Anr (Civil Appeal No.3826/2020) which affirms

the order of the Appellate Tribunal in the matter of Nidhi Rekhan Vs M/s

Samyak Projects Pvt Ltd, Company Appeal (AT)(Ins) No.1035/2020

wherein it was held that

"where the appellant is a speculative investor, he cannot claim status

and benefits as financial creditor under Explanation (i) of Section 5(8)(f)

of the IBC and is not interested in the financial well-being growth and

vitality of the Corporate Debtor but is just interested in investment and

has come in the garb of an allottee, such petition needs to be dismissed."

6. We are in agreement to say the status of 'Financial Creditor' cannot be

accorded to the Appellant, it being a speculative investor and had filed an

Application under Section 7 of the Code for recovery of its money with profit

and interest.

7. There is no merit in the Appeal. It is accordingly dismissed.

(Justice Ashok Bhushan) Chairperson

(Justice Yogesh Khanna) Member (Judicial)

(Mr. Barun Mitra) Member (Technical) Dated: 22-02-2024

BM