Uttam Singhal V
M/s. Anushree Home Developers Pvt. Ltd.
DATE OF ORDER:
JUDGE (S):.SHRI P.S. N. PRASAD, HON’BLE MEMBER (J)
DR. BINOD KUMAR SINHA, HON’BLE MEMBER (T)
Petitioner: Uttam Singhal
Respondent: M/s. Anushree Home Developers Pvt. Ltd
The National Company Law Tribunal has reaffirmed that the individuals to whom flats have already been sold after the completion of the construction would still be allottees and would be included for estimation of the threshold limit of section 7, IBC while adjudicating an application under Section 7 of Insolvency and Bankruptcy Code, 2016 ("IBC, 2016") in Uttam Singhal & Ors vs M/s Anushree Home Developers Ltd.& Anr.
- M/s Anushree Home Developers Private Limited and Swatantra Land and Finance Private Limited ("Corporate Debtors") created an Association of Persons ("Developer AOP") to establish advertising for a Group Housing Colony ("the Project") in Faridabad. In 2015, the 13 Applicants ("Financial Creditors") invested in 10 units of the project. In October 2015, the Financial Creditors and the Developer AOP signed a Builders' Buyers Agreement ("BBA"), under which the Developer AOP was required to provide possession of the aforementioned apartments within three years of the BBA's execution.
ARGUMENTS ADVANCED ON BEHALF OF APPLICANTS
- The Financial Creditors alleged that the Project's development was not finished to date and that the default occurred on October 26, 2018, and February 28, 2020.
- It was further argued that the current Financial Creditors constitute 10% of the class of allottees in the relevant Project. The Group Housing Project comprised three sites in all, but the BBA was only applicable to Site 2 with 249 flats, and the BBA excluded Sites 1 and 3 from the Project. Only 99 of the 249 flats had been assigned at the time the petition was filed. Because the Financial Creditors account for more than 10% of the 99 allottees, the criteria under Section 7, IBC is met.
ARGUMENTS ADVANCED ON BEHALF OF RESPONDENT
- The Corporate Debtor, on the other hand, contended that the Group Housing Project, according to information on the Haryana Real Estate Authority website, has 12 buildings that have been reserved. Eight of these towers were completed, while four more were under development.
- Thus, at the time of petition filing, there were 653 allottees, with a minimum of 64 allottees required for petition maintainability. The arguments that allottees of flats whose construction was completed should not be included in the formulation of the threshold limit under Section 7, IBC were untenable.
ANALYSIS OF THE TRIBUNAL
- The Tribunal noticed that the project specifications given by the Haryana Real Estate Authority stated that the building had 12 towers with 820 units, 653 of which had been allocated. Eight towers had been finished, with four towers still under construction. As a result, the petition's minimum maintainability level was 64 allottees.
- Furthermore, the Tribunal emphasized that those to whom the flats had already been sold following the completion of the construction would still be deemed allottees and would be included in Section 7, IBC threshold limit. The Supreme Court decision in Manish Kumar V. Union of India, 2021 (5) SCC was cited, which stated that in the instance of apartments, all persons to whom allocation had been made would be deemed as allottees to compute the threshold under Section 7, IBC.
- The Tribunal dismissed the petition based on the aforementioned observations.