NCLAT sets aside CIRP plea as allottee was a speculative investor and corporate debtor agreed to repay principal amount

Case Details: Ankit Goyat v. Sunita Agarwal - [2021] 131 taxmann.com 219 (NCLAT- New Delhi)

Judiciary and Counsel Details

• • Anant Bijay Singh, Judicial Member and Ms. Shreesha Merla, Technical Member
  • Chandra Shekhar Yadav, Vinod Chaurasia and Ms. Gitanshi Arora, Advs. for the Respondent.

Facts of the Case

The Memorandum of Understanding (MoU) was executed between allottee-financial creditor and corporate debtor/real estate developer wherein it was agreed that after a payment of Rs. 25 lakhs by the allottee, one unit would be earmarked for allottee along with a return of 25 percent per annum at end of 24 months.

The financial creditor, on the other hand, issued a demand notice demanding principal with interest. Thereafter, a financial creditor filed an application under section 7 of the Insolvency and Bankruptcy Code, 2016, and the same was admitted by NCLT by the impugned order.

The corporate debtor raised an issue that the allottee was a ‘speculative investor’ and triggered Code with malicious intentions. However, the assured rate of interest offered indicated that the allottee had invested, seeking interest in form of high assured returns.

NCLAT Held

Since allottee sought to benefit from a lucrative agreement as he was securing his money by way of that agreement which gave him lien over flat and unlike a normal builder-buyer agreement, where the home buyer does not have the option of exercising choice of taking or not taking possession of flat, in instant case buyer was to get his money plus 25 percent assured return even if he chose not to retain apartment.

Thus, homebuyers sought the benefit of a lucrative agreement and the Code prohibits and discourages recovery. Since corporate debtor was ready to return principal amount, order of admission under section 7 was to be set aside.

Case Review

• • Mrs. Sunita Agarwal v. Antriksh Infratech (P.) Ltd. [2021] 131 taxmann.com 218 (NCLT – NEW DELHI) (para 20) set aside.
  • Pioneer Urban Land & Infrastructure Ltd. v. Union of India [2019] 108 taxmann.com 147/155 SCL 622 (SC) (para 18)
  • Binani Industries Ltd. v. Bank of Baroda [2018] 99 taxmann.com 164/150 SCL 703 (NCLAT – New Delhi) (para 18) followed.

List of Cases Referred to

• • Pioneer Urban Land & Infrastructure Ltd. v. Union of India [2019] 108 taxmann.com 147/155 SCL 622 (SC) (para 3)
  • Shubha Sharma v. Mansi Brar Fernandes [Co. Appeal (AT) (Insolvency) No. 83 of 2020. dated 17-11-2020] (para 15)
  • Mansi Brar Fernandes v. Shubha Sharma [Civil Appeal No. (s) 3826 of 2020, dated 11-12-2020] (para 16)
  • Binani Industries Ltd. v. Bank of Baroda [2018] 99 taxmann.com 164/150 SCL 703 (NCLAT – New Delhi) (para 18).