National Company Law Appellate Tribunal
Radius Estates And Developers Private ... vs Nirav Vikram Maniar And Ors on 22 September, 2023
Author: Ashok Bhushan
Bench: Ashok Bhushan
NATIONAL COMPANY LAW APPELLATE TRIBUNAL,
PRINCIPAL BENCH, NEW DELHI
Company Appeal (AT) (Insolvency) No. 326 of 2023
[Arising out of Order dated 09.01.2023 passed by the Adjudicating Authority
(National Company Law Tribunal), Court-V, Mumbai Bench in IA. No. 3411 of
2022 in C.P.(IB) No. 1390 of 2020]
In the matter of:
Radius Estates & Developers Pvt. Ltd. ...Appellants
Vs.
Nirav Vikram Maniar & Ors. ...Respondents
For Appellant: Mr. Abhinav Vashisht, Sr. Advocate with Mr.
Pranaya Goyal, Mr. Dharav Shah, Mr. Shubham
Saini, Mr. Suyash Goverdhan, Ms. Akshita
Sachdeva, Advocates.
For Respondents: Mr. Abhijit Sinha, Mr. Kunal Vajani, Mr. Saikat
Sarkar, Mr. Kunal Mimani, Mr. Guneet Sidhu,
Advocates for R-1 & 2.
Mr. Tishampati Sen, Ms. Riddhi Sancheti, Mr.
Anurag Anand and Mr. Himanshu Kaushal,
Advocates for R-4.
JUDGMENT
(22 September, 2023) nd Ashok Bhushan, J.
1. This Appeal has been filed against the order dated 09.01.2023 passed by the Adjudicating Authority (National Company Law Tribunal), Court-V, Mumbai Bench by which order IA No.3411 of 2022 filed by the Respondent Nos.1 and 2 have been allowed. The Appellant has been directed to execute and register the sale agreement of Respondent No.1. Aggrieved by the said order, the Appellant has come up in the Appeal.
2
2. Brief facts of the case necessary to be noticed for deciding this Appeal are:
2.1. The Respondent Nos. 1 and 2 executed a booking form in respect of Unit No.501 in Wing-10 having carpet area 719 sq. ft. in the Project names "X- BKC" being co-developed by the Appellant with one 'MIG (Bandra) Realtors & Developers Pvt. Ltd.' for total consideration of Rs.2,25,66,600/-. The Respondent No.1 had prayed for execution of registration of the unit. The request of Respondent No.1 was also replied by a letter dated 02.09.2020 for arranging the payment of stamp duty and registration charges. There have been several correspondences thereafter. However, due to lockdown and COVID, further steps were not taken. The CIRP against the Corporate Debtor-
'Radius Estates & Developers Pvt. Ltd.' commenced by order dated 30.04.2021. In response to the publication issued by the Interim Resolution Professional, Appellant filed its claim in Form CA, on 25.06.2021, which claim was admitted for an amount of Rs.46,78,721/- which was reflected in summary of claims as on 15.12.2021 issued by the Resolution Professional of the Corporate Debtor where the names of the Respondent Nos. 1 and 2 were reflected at serial no.144. When the registration of flat was not done, the Respondent No.1 filed complaint dated 31.03.2021 before the Maharashtra RERA against the promotors under Section 13 of the RERA seeking direction to execute and register the same agreement. RERA passed an order dated 06.06.2022 directing the Corporate Debtor to execute and register the sale agreement. Resolution Professional has filed an Appeal against the order of the RERA which is said to be pending. In reply to the RERA Complaint, it was mentioned that the Committee of Creditors (CoC) has approved the Resolution Company Appeal (AT) (Insolvency) No.326 of 2023 3 Plan submitted by 'Adani Good Homes Pvt. Ltd.' on 27.12.2021. The Appellant filed an IA No. 3411 of 2022 before the Adjudicating Authority where following prayers have been made:-
"A. That this Hon'ble Tribunal be pleased to restrain the Respondents from selling, alienating, encumbering, parting with possession, letting out and/or creating third party rights in any manner whatsoever on the said unit being No. 501 in the said project by themselves or by/under any party/parties claiming through them.
B. That this Hon'ble Tribunal be pleased to call upon the records of the Resolution Professional and direct the RP to clarify the stand taken in MahaRERA regarding the alleged termination of the allotment of the Applicants without any evidence and/or authority and in respect thereto bring on record the basis of such stand and if found to be contradictory to records retract the said stand.
C. That this Hon'ble Tribunal be pleased to direct the Respondents to execute and register an agreement for sale in favor of the Applicants with respect to the said unit being unit no. 501 in the said project. D. Any other orders this Hon'ble Tribunal may deem fit under the nature and circumstances of the present case.
E. Costs."
2.2. The Adjudicating Authority issued notice on the Application and Reply to the Application was filed by the Resolution Professional as well as the Successful Resolution Applicant. The Adjudicating Authority heard the parties and by impugned order dated 09.01.2023 allowed the Application and directed the Respondent to execute and register the sale agreement in favour of the Applicants (Respondent Nos.1 & 2 herein). The Appellant has come up in the Appeal challenging the order dated 09.01.2023.
Company Appeal (AT) (Insolvency) No.326 of 2023 4
3. We have heard Shri Abhinav Vashisht, Learned Senior Counsel appearing for the Appellant, Shri Abhijit Sinha, Learned Counsel for Respondent Nos.1 & 2 and Shri Tishampati Sen, Learned Counsel for Respondent No.4.
4. Shri Abhinav Vashisht, Learned Senior Counsel for the Appellant challenging the order submits that the unit claimed by Respondent Nos.1 & 2 was included in the unsold unit and appeared as a cancelled unit in the records maintained by the erstwhile management of the Corporate Debtor. On the strength of merely booking form, Respondent Nos.1 & 2 cannot claim any allotment. The confirmation letter dated 09.03.2017 placed by the Respondent Nos.1 & 2 at the time of hearing before the Adjudicating Authority is disputed, hence, no reliance can be placed unless the booking is confirmed and no rights can flow to Respondent Nos.1 & 2. It is submitted that the Adjudicating Authority has wrongly relied on the Maharashtra RERA order dated 06.06.2022. It is submitted that after initiation of the Corporate Insolvency Resolution Process (CIRP) on 30.04.2021, Moratorium shall ensue under Section 14 of the IBC, hence, Maharashtra RERA could not have proceeded and passed any order on the complaint filed by the Respondent No.1 & 2. It is submitted that the order of the Maharashtra RERA has been challenged before the Appellate Authority, which Appeal is pending. It is submitted that the Adjudicating Authority committed error in relying on Maharashtra RERA order which is completely misplaced. It is submitted that it is settled law that in event of conflict between IBC and RERA, IBC shall prevail as per Section 238 of the IBC.
Company Appeal (AT) (Insolvency) No.326 of 2023 5
5. Shri Abhijit Sinha, Learned Counsel for the Respondent Nos.1 and 2 refuting the submissions of the Learned Senior Counsel for the Appellant contends that there is no dispute that booking form was filled up by the Respondent Nos.1 and 2 and amount of Rs.40,65,770/- was paid. There was no necessity of filing confirmation letter at any earlier point of time since at no point of time allotment in favour of Respondent Nos.1 and 2 was disputed. It is submitted that in correspondence between the parties after allotment, when Respondent Nos.1 and 2 requested for registration, at no point of time allotment was questioned or doubted. It is submitted that when IRP has admitted the claim of Respondent Nos. 1 and 2 which is reflected in the list of creditors as on 15.12.2021, it is not open for the Appellant or anyone else to question the allotment. It is submitted that the allegation that allotment of unit was cancelled is wholly false and incorrect. There is no correspondence brought on record indicating that any cancellation was done at any point of time or communicated to the Respondent No.1 & 2. The correspondence between the parties itself belies the claim of alleged cancellation. When the Respondent Nos.1 & 2 wrote for execution of sale deed registration, at no point of time they were informed the unit is cancelled. In any view of the matter, no document could be produced by Successful Resolution Applicant (SRA) or Resolution Professional to show that unit was cancelled at any time and the Adjudicating Authority rightly passed an order directing for registration of unit.
6. We have considered the submissions of the Learned Counsel for the parties and perused the record.
Company Appeal (AT) (Insolvency) No.326 of 2023 6
7. There is no dispute between the parties that Respondent Nos.1 and 2 jointly booked Unit No.501 in Wing-10 having carpet area 719 sq. ft. in the Project names "X- BKC" being co-developed by the Appellant with one 'MIG (Bandra) Realtors & Developers Pvt. Ltd.'. The payment of Rs.46,65,770/- was made by Respondent Nos.1 and 2 is not disputed. In IA which was filed by the Respondent Nos.1 and 2 before the Adjudicating Authority, Respondent Nos.1 and 2 have given facts in detail giving the details of the payment by cheques and RTGS. The Respondent Nos.1 and 2 have also brought on the record correspondences between the parties. We may notice e-mail dated 02.09.2020 issued on behalf of the promoters, which has been brought on the record. The said e-mail asked the Respondent No.1 and 2 to kindly arrange for the payment of the stamp duty and registration charges. It is useful to extract the e-mail dated 02.09.2020, which is to the following effect:-
"----------Forwarded message------ From: Neha R <[email protected]> Date: Wed, 2 Sep 2020 at 15:33 Subject: Ten BKC | W10-0501 | Stamp Duty & Registration Details To: <nirav [email protected]> Cc: Usha Puthran- ABIL <[email protected]> Dear Mr. Maniar, Greetings from Radius Developers.
Please find below the process for registration for the units W10-0501 at Ten BKC.
1. We request you to kindly arrange for the payment of the stamp duty and registration charges as per the details hereunder:
Company Appeal (AT) (Insolvency) No.326 of 2023 7 Particulars Amount Through NEFT/RTGS Stamp Duty Amount Rs.5,30,000/- Bank Name: Punjab Registration Rs.30,000/- National Bank Total Rs.5,60,000/- Branch: Goregaon West A/c Name: MAHA GOVT STATUTORY EPAYMENT A/c No:
993800MG00000011 IFSC:PUNB0993800
2. Once you've done the online transfer request you to provide us the UTR/Reference number for the payment made so we can collect ESBTR Challan from the bank on your behalf, this Challan is mandatory for registration.
3. We would need 10 working days to complete the registration of the unit & challan will be generated within 3 working days of online transfer.
4. Agreement will be prepared by us and the same needs to be signed by you at the Registrar's office on the day of Registration. Please share the address to be mentioned in the agreement at the earliest so we can get the agreement printed.
5. Registration can be scheduled after 3 days of receipt of the challan. Request you to carry 1 passport size photograph of each applicant along with the identity proof (original and copy) preferably Pan Card & Rs.10,000/- to be paid at the registrar office to carry out the registration formalities. The date and time for registration will be shared with you once the challan is generated.
Registered copy of the agreement will be handed-over to you within 3 working days' post registration. Please feel free to get in touch this for any further query or clarifications.
Should you need any further assistance, please feel free to contact me.
Regards Neha Rambhia Relationship Manager ONE BKC, A-Wing, Level 14, BKC, Bandra (E), Mumbai-400051, India Company Appeal (AT) (Insolvency) No.326 of 2023 8 ......."
8. Application also refers to a typed message on behalf of the Appellant in response to WhatsApp message dated December 7, 2020, where again Respondent No.1 was informed by following message:-
"Dear Mr. Maniar, Greetings from Radius Developers.
Please find below the process for registration for the units W10-0501 at Ten BKC. We request you to kindly arrange for the payment of the stamp duty and registration charges as per the details hereunder:
Particulars Amount Through
NEFT/RTGS
Stamp Duty Amount Rs.5,30,000/- Bank Name: Punjab
Registration Rs.30,000/- National Bank
Total Rs.5,60,000/- Branch: Goregaon West
A/c Name: MAHA GOVT
STATUTORY EPAYMENT
A/c No:
993800MG00000011
IFSC:PUNB0993800
2. Once you've done the online transfer request you to provide us the UTR/Reference number for the payment made so we can collect ESBTR Challan from the bank on your behalf, this Challan is mandatory for registration,
3. We would need 10 working days to complete the registration of the unit & challan will be generated within 3 working days of online transfer.
4. Agreement will be prepared by us and the same needs to be signed by you at the Registrar's office on the day of Registration. Please share the address to be mentioned in Company Appeal (AT) (Insolvency) No.326 of 2023 9 the agreement at the earliest so we can get the agreement printed.
5. Registration can be scheduled after 3 days of receipt of the challan. Request you to carry 1 passport size photograph of each applicant along with the identity proof (original and copy) preferably Pan Card & Rs.10,000/- to be paid at the registrar office to carry out the registration formalities. The date and time for registration will be shared with you once the challan is generated.
Registered copy of the agreement will be handed-over to you within 3 working days' post registration. Please feel free to get in touch with us for any further query or clarifications.
Should you need any further assistance, please feel free to contact me.
Regards, Neha Rambhia Relationship Manager ONE BKC, A-Wing, Level 14, BKC, Bandra (E), Mumbai-400051. India L: +91 22 3396 5700 M.: +91 91675 15211 E.: [email protected] We are hoping your query was adequately and appropriately addressed. would be happy to hear if you would like to share your feedback at that @radindexioners.com Ms. Esha Saini - Project-in-
Please don't print this e-mail unless required."
9. There has been various correspondences between the parties which are all brought on record along with the Application filed by Respondent Nos.1 and 2 being IA No.3411 of 2022 which is part of the record of Appeal which indicate that at no point of time there was any suggestion on behalf of the Appellant that unit has been cancelled. Details of payment received from Respondent Nos.1 and 2 has been communicated and the balance amount Company Appeal (AT) (Insolvency) No.326 of 2023 10 was also communicated which is clear from e-mail sent on behalf of the promoters which had communicated that balance amount to be paid is Rs.1,71,48,830/- which e-mail is at page 179 of the Appeal. The correspondence between the parties at the relevant time which correspondence was with regard to registration of unit clearly indicate that allotment was never questioned nor it was even suggested that allotment has been cancelled at any point of time. The submission of the Appellant is that booking form itself contemplated that there has to be confirmation by the developer which having never done, allotment is not final. The above submission needs to be rejected for more than two reasons. Firstly, the correspondence between the parties where details of the balance amount and request for registration of unit was always answered by giving details of stamp duty and registration charges clearly prove that allotment was never in question. It further proves that allotment was never cancelled.
10. Learned Senior Counsel for the Appellant has placed reliance on the judgment of the Hon'ble Supreme Court in "Hansa V. Gandhi vs. Deep Shankar Roy and Ors.- (2013) 12 SCC 776" where Hon'ble Supreme Court in paragraphs 19 and 21 laid down following:-
"19. It is a fact that the plaintiffs had not entered into any formal agreement with regard to the purchase of the flats with the developer. The mere letter of intent, which was subject to several conditions, would not give any right to the plaintiffs for purchase of the flats in question till all the conditions incorporated in the letter of intent were fulfilled by the plaintiffs i.e. the proposed purchasers. It is also a fact that all the conditions, which were to be fulfilled, had not been fulfilled by the plaintiffs.
xxx xxx xxx Company Appeal (AT) (Insolvency) No.326 of 2023 11
21. The letter of intent cannot be said to be an agreement to sell for the simple reason that according to the contents of the letter of intent, only upon payment of the entire purchase price, the developer and the plaintiffs were to enter into an agreement with regard to sale of the flats. This fact clearly denotes that no agreement to sell had been entered into between the plaintiffs and the developer and in absence of such agreements, in our opinion, there cannot be any right in favour of the plaintiffs with regard to specific performance of any contract. Thus, in our opinion, the High Court did not commit any error while coming to the conclusion that there was no binding contract or agreement in existence between the plaintiffs and the developer and therefore, the trial court could not have decreed the suit for specific performance."
11. The above judgment of the Hon'ble Supreme Court arose out of original suit proceedings where suit was filed for specific performance of agreement for sale of the flats. Developer has executed a letter of intent dated 29.09.1992 whereby the developer had agreed to reserve a flat which reservation was subject to the bye-laws of the Society. In the above context, observations as noted above in paragraphs 19 and 20 were made by the Hon'ble Supreme Court.
12. The present is a case where after booking of the flat, payments made by Respondent Nos.1 and 2 were accepted and there is series of correspondences regarding registration of sale which was initially answered on behalf of the promoter that registration is executed after completing the necessary formalities like payment of stamp duty and registration. Further, in the present case, the claim of the Respondent Nos.1 and 2 has been accepted by the IRP which was reflected in the list of creditors. When Respondent Nos.1 and 2 have been accepted as homebuyers i.e. creditor in a class, judgment of Company Appeal (AT) (Insolvency) No.326 of 2023 12 the Hon'ble Supreme Court in "Hansa V. Gandhi" (supra) is not applicable. Present is a case arising out of IBC proceedings.
13. Secondly, Respondent Nos.1 and 2 are right in their submission that allotment was never in question and no occasion arose for filing the confirmation letter dated 09.03.2017 which was placed before the Adjudicating Authority during the course of the hearing and has been accepted. We, thus, are fully satisfied that the submission of the Appellant that allotment was not confirmed cannot be accepted.
14. Now coming to the submission of the Appellant that unit was reflected as unsold unit and it was a cancelled unit. The above submission cannot be accepted for two reasons. Firstly, the claim of the Respondent Nos.1 and 2 was accepted by IRP which is reflected in the list of creditors as on 15.12.2021 which was never challenged by anyone. The name of Respondent Nos.1 and 2 having been included in the list of creditors became final and cannot be allowed to be questioned. Secondly, in the correspondences at relevant time between the parties, it is not suggested that unit has been cancelled and further while replying to the Application which was filed by Respondent Nos.1 and 2 being IA No. 3411 of 2022, neither any material was brought on record nor any document to prove that unit was cancelled or cancellation was communicated to the Respondent Nos. 1 and 2 at any point of time. Adjudicating Authority has rejected the said submission and returned a finding that no cancellation letter or any correspondences to substantiate the same have been produced. We, thus, are satisfied that plea of cancellation of unit sought to be raised on behalf of the SRA is wholly false and incorrect.
Company Appeal (AT) (Insolvency) No.326 of 2023 13
15. Now coming to the submission of the Counsel for the Appellant that in the event of conflict between the RERA and the IBC, IBC shall prevail. Learned Senior Counsel for the Appellant has relied on the judgments of the Hon'ble Supreme Court in "Pioneer Urban Land and Infrastructure Ltd. vs. Union of India- (2019) 8 SCC 416" and "Jaypee Kensington Boulevard Apartments Welfare Assn. v. NBCC (India) Ltd.- (2022) 1 SCC 401". The Hon'ble Supreme Court in the above case has laid down that in event there is any conflict between RERA and IBC, RERA shall prevail. In paragraph 29 of "Pioneer Urban Land and Infrastructure Ltd." (supra), following has been laid down:-
"29. It is clear, therefore, that even by a process of harmonious construction, RERA and the Code must be held to co-exist, and, in the event of a clash, RERA must give way to the Code. RERA, therefore, cannot be held to be a special statute which, in the case of a conflict, would override the general statute viz. the Code."
16. For the purposes of present case, we need not refer to order dated 06.06.2022 passed by Maharashtra RERA directing the promoter to execute the registration. The said order is under challenge before the Appellate Authority which Appeal is pending. The present is a case where specific IA was filed by Respondent Nos.1 and 2 before the Adjudicating Authority being IA No.3411 of 2022 seeking a prayer for directions as noted above. Adjudicating Authority passed impugned order on the said Application after hearing the parties, hence, the order dated 09.01.2023 is passed on IA filed by the Respondent Nos.1 and 2. Direction has been issued in terms of Company Appeal (AT) (Insolvency) No.326 of 2023 14 proceedings under IBC. We are satisfied that for the purpose of present case, we need not enter into issue whether RERA could have passed order on 06.06.2022 or not. Impugned order dated 09.01.2023 deserves to be affirmed without reference to the order of RERA.
17. In view of the foregoing discussions, we do not find any error in the order dated 09.01.2023 passed by the Adjudicating Authority along with the Application filed by the Respondent Nos.1 and 2. There is no merit in the Appeal. The Appeal is dismissed.
[Justice Ashok Bhushan] Chairperson [Barun Mitra] Member (Technical) New Delhi Anjali Company Appeal (AT) (Insolvency) No.326 of 2023