Sidhartha Shankar Dey vs Emerald Tourist Home Private Limited

[Arising out of Order dated 09.06.2021 passed by the Adjudicating Authority (National Company Law Tribunal, New Delhi, Bench-VI) in IB-3081/(ND)/2019]

IN THE MATTER OF:

Sh. Siddhartha Shankar Dey S/o Shri Satyendra Nath Dey # 4, Sonali Sarani, Ananda Nagar, Guwahati-781005 Assam, India ....Appellant Phone No. 94353-31301

Versus

Emerald Tourist Home Pvt. Ltd. Having its registered 0ffice at 322, Ansal Chember II, ....Respondent Bhikaji Cama Place, New Delhi-110066.

Present: Appellant: Mr. Mani Bhushan Sinha, Advocate. Respondents: None

(18th August, 2023)

[Anant Bijay Singh (J)]

1. The instant appeal has been preferred by the Appellant (Financial

Creditor)- 'Sh. Siddhartha Shankar Dey', who is aggrieved and dissatisfied by

the order dated 09.06.2021, passed by National Company Law Tribunal, New

Delhi, Bench-VI in IB-3081/(ND)/2019, filed under Section 61 of the -2-

Insolvency and Bankruptcy Code, 2016, whereby Adjudicating Authority has

dismissed the Company Petition.

2. The brief facts giving rise to the instant Appeal are as follows:

i. The Appellant/Financial Creditor (FC) is an Individual and the investor

in the project of the Respondent/ Corporate Debtor (CD) herein for the

property of Respondent/ Corporate Debtor based at Haridwar,

Uttarakhand.

ii. The Respondent/Corporate Debtor is a builder and promoter "Emerald

Tourist Home Private Limited" is a Private incorporated on 08 June 2012.

It is classified as Non-govt. company and is registered at Registrar of

Companies, Delhi.

iii. The Respondent/ corporate debtor is involved in Hotels; camping sites

and other provision of short stay accommodation [Restaurant facilities

operated in connection with the provision of lodging remain classified in

this group.

iv. That the Respondent/Corporate Debtor sent an SMS to the Appellant/FC

regarding its new project launching on his mobile number and upon

receipt of the SMS, the Appellant/FC immediately called back to the

same number and thereafter the Appellant/FC got further information

regarding the projects for the investment required by him provided by the

Respondent/CD.

v. On the receipt of the details the FC visited the website of the

Respondent/ CD as given by the Respondent/CD to Appellant/FC.

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vi. That the Appellant/FC upon finding the good and lucrative option of the

investment opportunity, decided to invest in the project of the

Respondent/ CD offered by the Respondent/CD to the Appellant/FC with

the name and style "Emerald Rivera" based at Haridwar, Uttrakhand.

vii. That the CD upon finding the interest of FC in investing in the said

project had fixed up an appointment with the Appellant/FC and also

visited Guwahati to meet the Appellant/FC and the meeting was fixed at

his chamber at Guwahati High Court on 7.11.2012.

viii. During the meeting the Respondent/CD offered the two way investment

to the Appellant/FC in the same project, one on the pretext of the

"Guaranteed Return Plan" and another by "proposed allotment" of the

booked Flat.

ix. That Respondent/CD and Appellant/FC finalized the deal of one 350 Sq

Ft flat in the said project and finalized the consideration amount of

Rs.8,75,000/- @ Rs 2500 per Sq Ft along with PLC of Rs 8750 @

Rs. 2500/- per sq ft with total consideration of Rs 9,45,000/-.

x. The Respondent/ CD after taking the booking amount of Rs 50,000/-

and told the Appellant/FC to visit its registered office for the signing of

the documents/ MOU.

xi. Thereafter on 04.12.2012 the Appellant/FC visited the registered office at

Delhi of Respondent/ CD and paid the balance Rs. 37,500/- as the

booking amount and Respondent/ CD also issued the Booking

acknowledgement No 842 dated 04.12.2012 as confirmation of booking

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and also issued the receipt No-019 dated 05.12.2012 of amount Rs

87,500/-.

xii. That the Appellant/FC then signed the Buyer Seller Agreement/MOU

and also given the required documents to the Respondent/CD and also

paid him cumulative amount of Rs 3,75,000/- (Three Lakhs Seventy Five

Thousand Only) through Cheque no 053753 & 071002 dated 24.12.2012

of Axis Bank and SBI Bank respectively and CD issued the

acknowledgement Slip no-048 dated 14.01.2013. The True Copy of the

Payment Acknowledgement Slip no 48 dated 14.01.2013 issued by the

Respondent/CD is at Page 45 of the appeal paper book as Annexure A-5.

xiii. Thereafter the Appellant/FC also paid the Respondent/CD the balance

required amount of Rs 4.00 Lakhs in cash and Respondent/CD issued

the Acknowledgment Slip no 049 dated 14.01.2013 with a Condition that

rest 10% of the payments will be paid on possession of the Flat. The True

Copy of the Payment Acknowledgement Slip no-49 dated 14.01.2013

issued by the Respondent/ CD is at Page 46 of the appeal paper book as

Annexure A-6.

xiv. In terms of the agreement cum Memorandum of Understanding between

the parties and despite payments of the said amount the required fund is

not delivered to the appellant thereafter the appellant preferred

application under Section 7 of IBC, 2016 before the NCLT, New Delhi,

Bench VI bearing no. IB-3081/(ND)/2019, the Adjudicating Authority

after hearing the parties dismissed the Section 7 application on the

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ground that the date of default i.e. 22.12.2014 which is much beyond the

period of three years, so that, the application is time barred and

thereafter dismissed the Section 7 application.

3. Counsel for the Appellant in the memo of appeal and also in the written

submissions filed on behalf of the appellant and also during course of the

arguments while assailing the Impugned Order submitted as follows:

i. The FC/Appellant and CD/Respondent executed an Agreement termed

as MOU (Memorandum of Understanding). The one of the clause no 3 of

the agreement cum Memorandum of Understanding ref. no

ETH/ER/DL/04/12/2012-2013 confirms that Rs 15750/- Quarterly

commitment amount to be paid to Investor /Financial Creditor,

Appellant herein after 90% of the investment amount is received by the

Respondent/Corporate Debtor from the FC/Appellant w.e.f March 2013

till September 2014 or till the possession is not handed whichever is

later.

ii. That means if the possession of the property is not handed over to the

appellant then the limitation is continuing, as the assured investment

amount was defaulted by the CD/Respondent as the FC/Appellant has

not received any amount against the same assured return guaranteed by

the CD/Respondent. And more so the CD/Respondent has not handed

over the possession of the Flat also.

iii. The MOU is not a builder buyer agreement and it does not convey any

right, interest in any property of the project till the allotment/possession

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offer is not made and in the present case the CD/Respondent has not

even paid the assured and guaranteed amount also.

iv. The CD/Respondent upon finding the interest of FC/Appellant in

investing in the said project had fixed up an appointment with the

FC/Appellant and visited at Guwahati on 7.11.2012 at his chamber and

finalized the deal of investment wherein the CD/Respondent secured the

investment by assuring a collateral of one 350 Sq Ft flat in the said

project and finalized the consideration amount of Rs 8,75,000/- @ Rs

2500 per Sq Ft along with PLC of Rs 8750 @Rs 2500/- per sq ft with total

consideration of Rs 9,45,000/- also taken the Advance booking amount

of Rs 50,000/. Thereafter on 04.12.2012 the FC/Appellant visited the

Delhi office of CD/Respondent and paid the balance Rs 37500/- as the

booking amount and CD/Respondent issued the Booking

acknowledgement No 842 dated 04.12.2012 as confirmation of booking

and also issued the receipt No 019 dated 05.12.2012 of amount

Rs 87,500/- and later the CD/Respondent started pressurizing the

FC/Appellant in lieu of the Flats are getting booked at faster pace and if

he want to get secured booking he would have to pay the complete

payment at earliest and accordingly the FC/Appellant visited Haridwar

and signed the MOU and given the required documents to the

CD/Respondent and also paid him cumulative amount of Rs 3,75,000/-

(Three Lakhs Seventy Five Thousand Only) through Cheque no 053753 &

071002 dated 24.12.2012 of Axis Bank and SBI Bank respectively and

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CD/Respondent issued the acknowledgement Slip no 048 dated

14.01.2013, the FC/Appellant again paid the CD/Respondent Rs 4.00

Lakhs in cash and also taken the Acknowledgment Slip no 049 dated

14.01.2013 with a condition that rest of the payments (10% of the total

amount) will be paid on possession.

v. That as per the MOU, the corporate debtor guaranteed Rs 15,750/-

quarterly commitment amount against the investment amount by FC till

September 2014 or till the offer of possession is made, whichever is later

and by virtue of that MOU, the Financial Creditor became entitled for the

defaults amount till the date of initiation of the Section 7 application

under Insolvency & Bankruptcy Code 2016.

vi. That upon realizing the delays and default of the CD, the FC sent the

legal notice dated 25.11.2014 which was delivered on 28.11.2014 but the

CD has not replied back that Legal notice then on 16th November 2016

the FC has filed the Complaint "Case no 3016 of 2016" in the District

Court of Kamrup (Metro) at Guwahati under Section 420, 406, 417, 34 of

Indian panel Code 1860. The Learned Court of Shri Sarfraz Nawaz

Judicial Magistrate First Class, Kamrup (Metro) at Guwahati has issued

"Warrant of Arrest' against Mr Suresh Saini and Mr Rajesh Saini the

directors of the CD, who are yet to be arrested by the Police.

vii. The agreement as termed as MOU on guaranteed return plan with

commitment amount to be paid back to the FC and the FC is not an

"allottee" but an "intended allottee" as there were no allotment or builder

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buyer agreement with the Corporate Debtor and hence that was only the

investment opportunity given by the CD to FC by way of offering assured

and guaranteed return plan with the Commitment amount of Rs 15750/

quarterly to be paid to FC by CD between March 2013 to September

2014 by way of MOU. The CD failed to release even single instalment

despite all efforts. Therefore the FC also filed 2 Computation in Appeal

also, First for the Investment amount and other computation is for the

Commitment amount which has been defaulted by the CD.

viii. The FC submits that the since the clause 3 of the MOU clearly states

that there is commitment amount to be paid to Investor /Financial

Creditor after 90% of the payment received by the Corporate Debtor till

March, 2013 and total of Rs 15750/- payments will be paid to the

Financial Creditor quarterly w.e.f. March 2013 till September 2014 or till

the possession is not offered whichever is later, in this context it is

submitted that its continuing case of action and been covered under

section 18 of the Limitation Act, so the present application is also not

bared by the Limitation.

ix. In the matter of Samruddhi Co-operative Housing Society Ltd. V/s Mumbai

Mahalaxmi Construction Pvt Ltd in Civil Appeal No 4000/2019, Hon'ble

Supreme Court has laid down the principle of continuing wrong leading

to the fresh limitation with emphasis on CWT v. Suresh Seth (1981-2

SCC-790) a two-judge Bench of this Court dealt with the question of

continuing wrong. In M Siddiq vs Suresh Das (2020) 1 SCC 1. A

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continuing wrong occurs when a party continuously breaches an

obligation imposed by law or agreement.

x. In the matter Sunil Krishna Ghosh and Ors v/s Calcutta Improvement

Trust in Suit no 156 of 1999 decided by Hon'ble High Court of Calcutta

"17. The true principle appears to be that where the wrong complained of is the omission to perform a positive duty requiring a person to do a certain act the test to determine whether such a wrong is a continuing one is whether the duty in question is one which requires him to continue to do that act. Breach of a covenant to keep the premises in good repair, breach of a continuing guarantee, obstruction to a right of way, obstruction to the right of a person to the unobstructed flow of water, refusal by a man to maintain his wife and children whom he is bound to maintain under law and the carrying on of mining operations or the running of a factory without complying with the measures intended for the safety and well-being of workmen may be illustrations of continuing breaches or wrongs giving rise to civil or criminal liability, as the case may be, de die in diem."

4. Based on the submissions, counsel for the appellant has submitted that

the impugned order cannot be sustained, sought for setting aside the aforesaid

order and the appeal to be allowed.

5. From the perusal of the records it appears that the instant appeal was

preferred on 28.07.2021. On 15.02.2022, after hearing counsel for the

appellant notices were directed to be issued on Sole Respondent by both modes

and matter was directed to be listed on 06.04.2022. Sole Respondent has failed

to appear on 31.10.2022. On 06.01.02023, Ld. Counsel for the Appellant has

submitted that substituted services of notice under Order 5 Rule 20 of the CPC

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by publishing notice under the local newspaper has taken on Sole Respondent

and then the matter was listed on 13.03.2023. Despite publication of notice in

two newspapers the sole respondent has failed to appear under order dated

13.03.2023 and the matter was directed to proceeded against sole respondent

ex-parte and thereafter the matter was heard and on 04.08.2023 the Judgment

was reserved.

6. After hearing counsel for the parties and from the perusal of the records

it appears that Ld. Adjudicating Authority has dismissed the application under

Section 7 IBC, Code, 2016 filed by the appellant on the ground that the date of

default i.e. 22.12.2014 had occurred about three years prior to the date of filing

of application i.e. 21.11.2019, thus, the present application is time barred.

7. Although counsel for the appellant in his written submissions has relied

on two Judgments in "Samruddhi Co-operative Housing Society Ltd vs. Mumbai

Mahalaxmi Construction Pvt. Ltd, (2022) SCC OnLine SC 35" and "Sunil Krishna

Ghosh & Ors. Vs. Calcutta Improvement Trust, AIR 2001 Cal 199",

but both the Judgments are not applicable in the facts of the present case.

As much as from the perusal of Section 7 IBC application preferred by the

appellant/FC before the Adjudicating Authority, copy of which has been

annexed as Annexure-A-10 (Page 54-79) of the appeal paper book, at Page 67

Column 2 amount claimed to be in default and date on which the default

occurred, the amount claimed has been mentioned but date of default has not

been mentioned.

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8. The Adjudicating Authority in the impugned order after hearing the

parties have come to the conclusion that the date of default is 22.12.2014 and

the application under Section 7 of IBC was preferred on 21.11.2019 which is

beyond period of three years, so the application is barred by limitation.

9. We have no occasion to differ with the aforesaid finding of the

Adjudicating Authority and we affirm the finding. We do not find any merit in

the appeal. Hence, the appeal is hereby dismissed.

10. The Office of the Registry is directed to upload the Judgement on the

website of this Tribunal and send the copy of this Judgement to the

Adjudicating Authority (National Company Law Tribunal, New Delhi, Bench-VI)

forthwith.

[Justice Anant Bijay Singh] Member (Judicial)

[Dr. Alok Srivastava] Member (Technical)

Principal Bench, New Delhi

sa

Company Appeal (AT) (Ins.) No. 835 of 2021