The NCLAT, Principal Bench New Delhi observed that the MoU mentioned the immovable properties, which was claimed to be owned by the Corporate Debtor for which the Second Party is the Appellant.
The MoU stated that the Appellant approached the Corporate Debtor for purchasing and or jointly developing the properties. The MoU, which was the basic document submitted by the Appellant to prove financial debt, did not indicate that transactions are covered by Section 5(8) of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “IBC”).
Further, the ledger extracts also did not make the transaction as financial debt.
It was opined that he Appellant could not be treated as a real estate allottees on the basis of MoU, as per the definition of Section 5 (8)(f) Explanation of the IBC.
Brief Facts:
The present appeals have been filed against the order of the NCLT vide which interim applications seeking direction to admit claims of Appellant was rejected.
Brief Background:
Section 7 application filed by Bank of Maharashtra was admitted by NCLT and hence, CIRP was commenced against the Corporate Debtor DS Kulkarni Developers Ltd. Claims were invited from the creditors.
A Claim in Form CA (Submission of claim by Financial Creditors in a Class) for an amount of Rs.166,74,48,579/- and another Claim in Form-F for an amount of Rs.59,000/- was filed by D.S. Kulkarni & Associates.
The Resolution Professional (RP) asked for documentation to substantiate the claims, however, no document was provided and hence, claims were rejected. The Resolution Plan was approved by the Committee of Creditors (CoC). Thereafter, interim applications were filed for admission of claims, however it was rejected.
Contentions of the Appellants:
It was argued that the claims were submitted within the time. Further, the documents could not be submitted as the Authorized representatives and other directors were in jail. Moreover, Memorandum of Understanding (“MoU”) and Ledger extracts were filed which proved the claims.
Contentions of RP:
It was submitted that since no documents were filed at the relevant time, the claims ought to be rejected. Further, there was inordinate delay in approaching the Tribunal as resolution plan was already approved by the CoC.
It was argued that both the Appellant(s) were ‘related party’ to the Corporate Debtor and various fraudulent, undervalued and frivolous transactions were done by them with regard to which RP had filed avoidance application as well.
Observations of the Tribunal:
It was observed that the MoU mentioned the immovable properties, which was claimed to be owned by the Corporate Debtor for which the Second Party is the Appellant.
The MoU stated that the Appellant approached the Corporate Debtor for purchasing and or jointly developing the properties. The MoU, which was the basic document submitted by the Appellant to prove financial debt, did not indicate that transactions are covered by Section 5(8) of the IBC.
Further, the ledger extracts also did not make the transaction as financial debt.
It was opined that he Appellant could not be treated as a real estate allottees on the basis of MoU, as per the definition of Section 5 (8)(f) Explanation of the IBC.
The decision of the Tribunal:
Based on the aforementioned reasons, it was held that the order of the NCLT was correct and accordingly, appeal was dismissed.
Case Title: D S Kulkarni & Associates v. Manoj Kumar Aggarwal
Case No : Company Appeal (AT) (Insolvency) No.923 of 2023
Coram: Justice Ashok Bhushan (Chairperson), Arun Baroka (Technical Mmeber)
Advocates for Appellant: Advs. Mr. Sandeep Bajaj, Ms. Aakanksha Nehra, Mr. Naman Tandon and Adya Singh
Advocates for Respondents: Advs. Mr. Abhijeet Sinha, Mr. Varun Kalra and Mr. Saikat Sarkar, Mr. Arvind Nayar, Sr. Advocate with Mr. Puneet Singh Bindra, Mr. Akshay Sharma, Akshay Doctor, Ms. Simran Jeet, Mr. Rishabh Gupta, Mr. Sameer Sethi,
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