Capri Global Capital Ltd V/s Monarch Brookfields LLP IA 70/2022 In C.P. (IB)/2517(MB)2018
Facts:
1) Monarch Brookfield LLP, Monarch Universal, Monarch Realty Management Services Ltd, Monarch Imperials and Monarch Lifescapes Pvt Ltd, all together forms the Monarch group of companies. All Monarch group of companies deal into real estate business and management of all companies is looked into by Mr. Gopal Thakur and Mr. Hasmukh Thakur as directors/partners
2) On 24.03.2012, the Applicant No.03 paid Rs. 15,00,000/- to M/s. Monarch Imperial on instructions of the promoter of Monarch group of companies. M/s. Monarch Imperial issued an allotment letter dated 10.01.2013 in favour of Applicant Nos. 02 and 03 whereby they were allotted Flat No. 204 in the building called ‘1st Avenue’ in the project named “Monarch Imperial”. On 05.07.2013, Applicant No.02 paid Rs. 25,00,000/- to Monarch Realty Management Services Pvt Ltd on instructions of the promoter of Monarch group of companies
3) Applicants had purchased the flats as described hereinabove for an aggregate consideration of Rs. 1 crore paid by them in 2012-2013. The Applicants had purchased the said flats by depositing the consideration amounts in favour of different Monarch companies managed and controlled by the Monarch Group. However, despite issuance of the allotment letters, no agreements for sale were either executed or registered in favour of the Applicants.
4) The Applicants learnt that the promoters were persistently faltering in their commitments and several illegalities were being committed by them again and again as a result of which the Applicants were yet again defrauded. This led the Applicants to filing a police complaint dated 17.07.2015 to the Additional Commissioner of Police, CBD Belapur
5) CIRP against M/s Monarch Brookefileds LLP (the Corporate Debtor) was initiated vide Order of the Tribunal dated 27.09.2019 and Mr. S Gopalakrishnan was appointed as Interim Resolution Professional (IRP). IRP issued a public announcement in Form ‘A’ on 24.11.2019 inviting claim under Regulation 6 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 and the last date for submission of claim was 07.12.2019. In response to the publication dated 24.11.2019, the Applicants filed their claim in Form CA as financial creditors in a class by virtue of being the allottee of flats in the project Monarch Brookefields being implemented by the Corporate Debtor as mentioned in the Deed of Settlement.
6) The allotment made in favour of the Applicant Nos.01 and 02 is disclosed by the Affidavit dated 19.04.2017 filed by the Corporate Debtor before the Hon’ble Bombay High Court in Commercial Arbitration Petition No. 172/2017 filed by the Financial Creditor against the Corporate Debtor. Despite the same, the Resolution Professional has erroneously rejected the Applicant’s claim by observing that the consideration amount of Rs. 1,00,00,000/- was paid by the said purchasers to other group companies and therefore, the transaction appears to be a money lending transaction.
Issue: Whether the application can be admitted ?
Arguments:
Applicant:
1) Counsel submitted that a Deed of Settlement dated 24.09.2016 was executed between M/s. Monarch Universal and all Monarch Group of Companies as the ‘Developer’ through Mr. Gopal Thakur and Mr. Hasmukh Thakur, and Applicant Nos. 01 and 02 acting for themselves as well as the ‘Beneficiary’ for Applicant Nos. 03 to 05, wherein it was agreed that the Applicants will be allotted flats in the project belonging to the Corporate Debtor. Counsel for the Applicants further submits that even in the affidavit filed before the Bombay High Court in Commercial Arbitration Petition No. 172/2017, the designated partner Corporate Debtor had, inter-alia, mentioned the details of allotments to be made to the Applicants in the real estate project of the Corporate Debtor. Therefore, according to the learned Counsel for the Applicants, the Applicants are the allottees of the Corporate Debtor and the rejection of their claims by the Respondent was not justified in facts as well as in law
Respondent:
1) Counsel submitted that Applicants had not advanced or paid any sum of money into the account of the Corporate Debtor. Admittedly, the Applicants originally sought allotment of units in projects belonging to other group entities of the Corporate Debtor, but not of the Corporate Debtor itself.
2) Counsel submitted that correct position of law is that an allottee of real estate project being undertaken by the Corporate Debtor (and not its group companies) will only be entitled to be a financial creditor of that Corporate Debtor to the extent of amounts raised from that particular allottee. In the present case, since the Corporate Debtor has not raised any amount from the present applicants, the Applicants cannot be considered as financial creditors of the Corporate Debtor.
3) Counsel submitted that Applicants do not have any registered agreements in their favour from the Corporate Debtor. It is not even the case of the Applicants that the Corporate Debtor had entered into any agreement for sale with the Applicants. The entirety of the case of the Applicants is based upon certain purported letters of allotment as well as certain purported settlement deeds.
Decision: NCLT dismissed the application.
Rationale:
1) It held that Deed of Settlement dated 24.09.2016 was not executed by the Corporate Debtor as the deed does not bear any name, stamp or seal of the Corporate Debtor
2) In the factual matrix of the present case, admittedly, there has been no disbursal of money by the Applicants to the Corporate Debtor. Thus, the Applicants cannot be considered as “financial creditors”, much less “financial creditors in a class” under the provisions of the Code read with Regulation 8-A of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. Merely on the basis of a settlement deed in which the Corporate Debtor was not even a party, it cannot be said that the Applicants have become the financial creditors of the Corporate Debtor. Therefore, the rejection of the claims of Applicants No. 01 to 05 by the Respondent vide E-mail dated 23rd August, 2020 is fully justified in facts as well as in law.
Order:
