Non-registration of a charge under Section 77 of the Companies Act does not prevent a creditor from being classified as a secured creditor under the Insolvency and Bankruptcy Code.

JUDGEMENT

JUSTICE YOGESH KHANNA, MEMBER (JUDICIAL)

This appeal is filed against an impugned order dated 02.05.2023. The appellant is aggrieved of the fact it has been kept in the category of an unsecured creditor instead of being a secured creditor.

2. The learned counsel for the Appellant has referred to Loan Agreement dated 29.10.2015 to show the Appellant had granted a loan of Rs.11 crores to the Corporate Debtor on 29.10.2015, initially payable after three years, but the date was later extended from time to time. Two options were given qua interest payable on such loan (a) the interest @ 18% or (b) four flats bearing No.1501, 1502, 1504 and 1601 could be transferred in favour of the appellant towards interest in its full and final payment. It was one of the clauses of the agreement that in case the Corporate Debtor fails to pay the principal amount of Rs.11 crore then also four apartments bearing No.1901, 1902, 1904 and 2001 would be transferred in favour of the appellant. Admittedly the Corporate Debtor could not pay the principal amount of Rs.11 crore and the cheques given were dishonoured due to insufficient funds.

3. On 29.06.2020 the Corporate Debtor was admitted to CIRP. The appellant filed two claims, one in Form C for Rs.11 crore as a secured financial creditor and another in Form CA as the holder of four flats towards the interest payable.

4. The RP had admitted the claim of the appellant as home buyer qua four flats allotted in lieu of interest and the appellant has no grievance qua the same. However, he is aggrieved as the four flats to be given to him towards non-payment of principal amount Rs.11 crores, the appellant was shown as an unsecured financial creditor. To proceed further it would be important to examine relevant clauses of the agreement dated 29.10.2015 as under:

“2.1 It is agreed by and between the Parties that the tenure of the Loan shall be twenty nine (29) months (Loan Period) to be commenced from the date of receipt of the first tranche of Loan amount (Loan Period). The Developer shall within fifteen (15) days from the expiry of the Loan Period i.e. on or before November 15, 2017, repay the entire Loan to the Firm in the manner provided in this Agreement.

“3.1 It is agreed by and between the Parties that the Developer would be liable to pay to the firm, interest on a lump sum basis of Rs.____(Interest Amount) on the Loan from the date of receipt of the Loan tranches as provided above in Clause 2, till expiry of the Loan Period as and by way of interest during the entire loan period.

3.2 However, in lieu of the Interest Amount Payable by the Developer to the Firm on the Loan advanced in terms of this Agreement, the Developer has proposed to allot, transfer and assign to the Firm, in consideration of the Interest Amount four apartments being apartment No.s 1501, 1502, 1504 and 1601, admeasuring in aggregate about 4508 sq ft carpet area and 9304 sq ft saleable area, on the 15th and 16th floor of the Building to be constructed on the Property by the Developer together with four car parking spaces in the (basement/podium/automatic) in the Building (the Car Parking Spaces) (the aforesaid apartment No.1501, 1502, 1504 and No.1601 and the Car Parking Spaces are hereinafter collectively referred to as the “Allotted Apartments”) and more particularly described in schedule II hereunder written, to which the Firm has agreed. The floor plans of the Allotted apartments are annexed as Annexure III to this Agreement.

3.3 The Developer has, simultaneously on the execution of this Agreement, executed four (4) separate Agreements for Sale, as required under the provisions of the Maharashtra Ownership of Flats Act, 1961 (MOFA), in respect of each of the Allotted apartments thereby, int