Rita Malhotra & Anr vs Orris Infrastructure Private Limited CA 484 of 2024
Facts:
1) Appeal arises out of the Order dated 19.09.2023 (hereinafter referred to as ‘Impugned Order’) passed by the Adjudicating Authority (National Company Law Tribunal, Principal Bench, New Delhi) in C.P.(IB)234(PB)/2019 whereby the Adjudicating Authority dismissed the Section 7 application filed by the Appellants for initiating Corporate Insolvency Resolution Process (‘CIRP’ in short) against M/s Orris Infrastructure Pvt Ltd – Corporate Debtor. Aggrieved by this impugned order, the present appeal has been preferred by the Appellants.
Issue: Whether the appeal can be allowed ?
Arguments:
Appellant:
1) Counsel submitted that that the Corporate Debtor – Orris Infrastructures Pvt Ltd was developing a commercial building/complex known as Floreal Tower, Gurgaon. MOU was entered into between the parties wherein it was stipulated that MAR would continue to be paid by the Corporate Debtor for 36 months after the completion of the building or till the office space was leased out on completion, whichever is earlier, by the Corporate Debtor.
2) Counsel submitted that Corporate Debtor having not completed the project applied for renewal of License issued by the Town and Country Planning Department. The License had been renewed up to 13.11.2024 until final completion. Furthermore, it was submitted that though an Occupancy Certificate dated 16.08.2017 was placed before the Adjudicating Authority by the Corporate Debtor, the Occupancy Certificate cannot be viewed as Completion Certificate of the building. In any case, the liability for payment of MAR was up to 36 months from the date of Occupancy Certificate which was not complied to by the Corporate Debtor.
3) It was submitted that present application has been filed by the Appellants not in their capacity as allottees of the Floreal Tower project but predicated on the MOU dated 24.04.2010 and that the Appellants are claiming the sum not paid by them as allottees but for the amount which has become due and payable on account of MAR. Emphatically asserting that MAR Plan was entirely independent of the terms of allotment, it was stated that the investment arrangement was distinct from an allotment simpliciter
Respondent:
1) Counsel submitted that while admitting that the two parties had entered into an MOU dated 24.04.2010 and Space Buyers Agreement (SBA) dated 26.04.2010, stated that MAR was payable by them to the Appellants up to 36 months after completion of the building or till the office space was put on lease, whichever was earlier.
2) It was submitted that terms of the MOU being definitive and conclusive in nature, and the Corporate Debtor having complied thereto, there is no obligation to be further discharged by the Corporate Debtor. The demand of further amounts by the Appellants is not in conformity with the MOU clauses and is only a ploy to arm-twist the Corporate Debtor with a mala fide intention.
Decision: NCLAT dismissed the appeal.
Rationale:
1) It held that Adjudicating Authority has correctly held that even a commercial space or unit allotted to Assured Returns Class of Creditors is also covered in the ambit of an ‘allottee’.
2) Since the present Appellants happen to be part of the Assured Returns Class of Creditors, they continue to belong to the substratum of ‘allottees’ and therefore continue to be governed by the threshold limit prescribed under second proviso to Section 7(1) of IBC. This threshold criterion was also made applicable even in respect of all Section 7 applications filed before the amendment and given two months period for modifying their petition accordingly.
3) It held that Appellants cannot be said to go out of the definition of ‘allottees’ merely because they are part of MAR plan or that they should be treated in a different category wherein they are not required to comply with second proviso to Section 7(1).
Order:
