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AAJ Legal & Management Consultancy Llp (Formerly Aaj Finance & Credit Ltd.) v/s Keltech Infrastructures Ltd.

    Civil Appeal No. 3408 of 2020
    Decided On, 22 January 2021
    At, Supreme Court of India
    For the Appellant: Vishnu Sharma, Advocate. For the Respondent: ------

Judgment Text
Indira Banerjee, J.This appeal under Section 62 of the Insolvency and Bankruptcy Code 2016, hereinafter referred to as IBC, is against a final judgment and order dated 5th March 2020 passed by the National Company Law Appellate Tribunal (NCLAT), New Delhi, dismissing Company Appeal (AT) (INS.) No. 1248 of 2019 filed by the Appellant.2. On or about 30.05.2013, a Memorandum of Understanding was executed by and between the Appellant, hereinafter referred to as the Financial Creditor, and the Respondent, hereinafter referred to as the Corporate Debtor, whereby the Financial Creditor agreed to grant the Corporate Debtor loan of Rs.50,00,000 with interest @ 2% per month.3. To secure the aforesaid loan, the Corporate Debtor agreed to mortgage 2 flats at the "Kumar Imperial Greens" at Greater Noida to the Financial Creditor.4. It is not necessary to delve into details of the subsequent agreements executed by and between the Corporate Debtor and the Financial Creditor or to the disputes which arose between the parties.5. Suffice it to mention that the Financial Creditor issued a letter dated 2nd May 2017 to the Corporate Debtor, through its lawyer, demanding repayment of the entire loan.6. On or about 4th January 2018, the Financial Creditor invoked the IBC and filed a petition against the Corporate Debtor under Section 7 thereof, being Company Petition [IB] No.28/ND/2018 in the National Company Law Tribunal (NCLT), New Delhi. The said petition under Section 7 of the IBC was dismissed by the NCLT by an order dated 13th September 2019.7. The NCLT found that on 1st October 2016 the Financial Creditor had entered into an agreement with the Corporate Debtor, for purchase of a flat in a complex which the Corporate Debtor was developing. In terms of the said agreement the outstanding dues of the Corporate Debtor were to be appropriated towards consideration for the flat.8. The NCLT held that the Financial Creditor had chosen to enter into an Agreement with the Corporate Debtor for purchase of a flat in the "Kumar Golf Vista". The Financial Creditor could, in case of default on the part of the Corporate Debtor, to maintain a petition as home buyer. The relevant part of the order of the NCLT is extracted herein below:"7. In terms of clause 5(i) of the agreement the promoter was required to complete the building within 12 months from the date of signing the agreement and also providing under clause 5(ii) a grace period of 180 days. The price of the flat namely K-708, under clause 3 (a) is fixed as Rs.49,59,375/-. However, it is important to note from clause 5(ii) the following words which are material for the purpose of the case in hand and which read as follows."However, all the payments/demands have been received by the builder within the scheduled time"8. The above wordings in clause 5(ii) clearly evidences that the parties have virtually agreed to appropriate the loan amount granted earlier as the consideration for the flat purchase as otherwise the wordings as extracted above is an anomaly. It is pertinent to note that the execution of the agreement dated 1 October 2016 is not denied by the parties. Hence, considering the said agreement to be the fresh bargain as entered into between the parties thereby giving a go by to the earlier MOUs as well as the loan transaction of Rs.50 Lakhs.9. Still, the Financial Creditor will be entitled to maintain a petition under Section 7 IBC, 2016 in case of a default in handing over possession of the flat, being the subject matter of the agreement within the time schedule and for the refund of the money made available under the agreement along with compensation, if any contemplated.10. From the records, it is seen that the letter of offer of possession is enclosed dated 7 March 2018 by the Corporate Debtor in its reply. From the terms of the agreement and as given in paragraph supra in relation to time limit for possession to be given, taking into consideration the grace period of 6 months and well as contracted period of 12 months.11. The possession of flat booked should be given on 1.4.2018 (as the agreement dated 1/10/16 stipulated that the possession will be given within 18 months i.e. 12 months plus grace period of 6 months) it is also required to note that the petition was filed on 4.1.2018 well before the period fixed under the agreement dated 1.10.2016.12. From the dates it is quite evident that there is subsequent agreement dated 1.10.2016 wherein the parties seem to have entered into a fresh bargain as narrated in the earlier portion of order.13. It is evident from above that the petitioner had given advance for purchase of a flat for which formal agreement was signed on We find that on the date of filing of petition as a (Home Buyer) no default stands established, more so, when the possession also seems to be offered before the completion of the date of possession as given in the agreement namely In the circumstances this petition had been filed premature and the Tribunal dismiss it on the said count."9. In appeal, the NCLAT found that the admitted document executed between the parties which was the latest in point of time, was the agreement dated 1st October 2016. Considering the contents of the said agreement, the NCLAT found no reason to disagree with the adjudicating authority. The records showed that the Corporate Debtor had in terms of the said agreement dated 1st October 2016, which was the latest arrangement between the parties, offered possession of the flat to th

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e Financial Creditor on 7th March, 2018. As such, there was no default in compliance of the terms and conditions of the said agreement.10. We find no grounds to interfere with the Judgment and Order dated 5th March, 2020 passed by the National Company Law Appellate Tribunal in Company Appeal (AT) (Insolvency) No.1248 of 2019, affirming the judgment and order dated 13th September, 2019 of NCLT dismissing Company Petition (IB) No.28/(ND)/2018.11. The Civil Appeal is accordingly dismissed. The dismissal of this appeal will not prevent the Appellant from availing of such remedy, as may be available to it in law.