Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2024 Supreme(Online)(NCLAT) 1187

NATIONAL COMPANY LAW APPELLATE TRIBUNAL
NARESH SALECHA, MEMBER (TECHNICAL)
Anand Sonbhadra – Appellant
Versus
Gulshan Sehti – Respondent
Company Appeal (AT) (Insolvency) No. 810 of 2021 | Company Appeal (AT) (Insolvency) No. 768 of 2021

Advocates:
For the Appellants/Petitioners: Mr. Abhishek Anand, Mr. Nipun Gautam, Ms. Kashish Rehan, Adv.
For the Respondents: Mr. Nakul Mohta, Mr. Puneet Pathak, Adv.

Homebuyers are recognized as financial creditors under the Insolvency Code, critical for determining claims irrespective of the investor's speculative intentions.

Headnote:(A) Insolvency & Bankruptcy Code, 2016 - Sections 5(8)(f), 18(6), 25(2)(e), and 61 - Appeal against claims acceptance - Appellant claimed respondents were speculative investors, while respondents insisted they were homebuyers entitled to be treated as financial creditors - Supreme Court's judgments in Pioneer Urban Land and Swiss Ribbons referenced - Court concluded that any allottee in a real estate project is a financial creditor regardless of their speculative intent and upheld the decision of the lower court to accept respondents' claims. (Paras 36, 37, and 63)

(B) The doctrine of indoor management protects genuine transactions despite disqualifications of directors; whether respondents acted as commission agents does not negate their status as creditors. (Paras 56, 61, and 62)

Table of Content
1. introduction of appeals and context of claims. (Para 1 , 2 , 5)
2. definition of financial creditors under the code. (Para 22 , 29 , 37)
3. arguments regarding respondents' status as genuine buyers versus speculative investors. (Para 39 , 41 , 62)
4. conclusion and affirmation of lower court's ruling. (Para 56 , 61 , 63)

JUDGEMENT

(08.05.2024)

NARESH SALECHA, MEMBER (TECHNICAL)

1. Two Appeals have been filed by Anand Sonbhadra (in short Appellant who is the Resolution Professional of Shubhkamna Buildtech Pvt. Ltd. (in short ‘Corporate Debtor’) i.e., under Section 61 of the Insolvency & Bankruptcy Code, 2016 (in short ‘Code’) in Company Appeal (AT) (Insolvency) No. 810 of 2021 and Company Appeal (AT) (Insolvency) No. 768 of 2021 against the Impugned Order dated 23.07.2021 passed by the National Company Law Tribunal, New Delhi Bench, Court No. IV (in short ‘Adjudicating Authority’)

2. It has been brought out that the Corporate Debtor went into Insolvency on 26.11.2018 as per the order of the Adjudicating Authority and the Appellant was appointed as the Interim Resolution Professional (in short ‘IRP’)/ Resolution Professional.

3. The Appellant made the public announcement in ‘Form A’ on 29.11.2018 and 05.01.2019 and the last date of submission of the claims was 12.01.2019.

4. It has been stated that both the Respondents i.e., Gulshan Sethi in Company Appeal (AT) (Ins.) No. 810 of 2022 made the claim of Rs. 17,72,75,157/- and Anuradha Sethi in Company Appeal (AT) (Ins.) No. 728 of 2022 made the claim of Rs. 3,93,74,137/-. We shall refer both the Respondents i.e, Gulshan Sethi and Ms. Anuradha Sethi as the Respondents, herein after, as the causes of issue of both the appeals are same.

5. The Resolution Professional did not accept the claim and thereafter the Respondents- Gulshan Sethi and Anuradha Sethi filed their appeals before the Adjudicating Authority and the Adjudicating Authority accepted the claims of the Respondents in terms of clause 8.6(3) of the Resolution Plan.

6. It is the case of both the Respondents that they filed the claims well within the statutory period described under Regulation 12 of CIRP Regulation, 2016 and alleged that the Appellant did not act in accordance with Section 18(6), Section 2 5(2)(e) of the Code and also in terms of judgment of the Hon’ble Supreme Court of India passed in Swiss Ribbons and Committee of Creditors of Essar Steel Vs. Satish Kumar [ (2020) 8 SCC 531 ].

7. The issue raised by the Appellant is whether the Respondents are ‘Allottee’ within the meaning of Section 5(8)(f) of the Code or should be treated as ‘Speculative Investor’, in terms of judgment of the Hon’ble Supreme Court of India in the matter of Pioneer Urban Land Infrastructure Limited & Ors. Vs.

Union of India (UOI) & Ors. [AIR 2019 SC 4055] .

8. The Appellant submitted that the claims made by the Respondents on the basis of alleged settlement agreement dated 14.11.2017 was indeed entered by the Respondents with the disqualified Directors of the Corporate Debtor on the relevant date, hence is not valid.

9. We are informed by the Respondents that the Respondents i.e., Gulshan Sethi in Company Appeal (AT) (Ins.) No. 810 of 2022, booked 15 flats in the projects of the Corporate Debtor in the year 2013-14 for which consideration was paid by cheques and cash and similarly Respondents – Anuradha Sethi in Company Appeal (AT) (Ins.) No. 768 of 2022 also booked 6 flats in 2013-14 and made the payment in cheques and cash to the Corporate Debtor.

10. It is the case of both the Respondents that their payments were reflected in the books of the Corporate Debtor and alleged that the Corporate Debtor committed fraud on them and resold the said flats to third parties and therefore, both the Respondents filed an FIR which led to arrest of Directors of the Corporate Debtor.

11. The Respondents also brought out that the Trial Court released the said directors of the Corporate Debtor on bail on 14.11.2017 which was based on the settlement w