IBC Amendment Prescribing Minimum Number Of Homebuyers Applicable To All Company Petitions Pending For Final Admission: NCLT Mumbai

The National Company Law Tribunal, Mumbai Bench, comprising Shri H.V. Subba Rao (Judicial Member) and Smt. Anu Jagmohan Singh (Technical Member), while adjudicating an application under Section 7 of Insolvency and Bankruptcy Code, 2016 (“IBC, 2016”) in S. Ramasubramonian vs Shree Sukhakarta Developers Private Limited has held that the IBC amendment prescribing the minimum number of homebuyers for initiation Corporate Insolvency Resolution Process under Section 7 of IBC, 2016 is applicable to all the pending Company Petitions that are pending for final admission. Background Facts Shree Sukhakarta Developers Private Limited (“Corporate Debtor”) issued a letter of allotment dated 30.03.2014 to S. Ramasubramonian (“Financial Creditor”). The Financial Creditor made payments of various installments to the Corporate Debtor but the Corporate Debtor issued a letter of termination dated 07.11.2017 to the Financial Creditor along with 6 post dated cheques. However 4 out of the 6 cheques were dishonored upon presentation. It was contended by the Corporate Debtor that the petition was barred by Section 10A of IBC, 2016. It was further contended that as per the Consent Terms between the parties, it was agreed that the Corporate Debtor would pay an amount of Rs. 1,55,00,000/- and out of the said amount, the Corporate Debtor has already paid Rs. 80,00,000/-. It was further contended that the Consent Terms between the parties was taken on record by the Tribunal on 11.09.2019 with “liberty to file a fresh petition in case of the breach of the consent terms.” Thus the Financial Creditor did not have the liberty to file a Miscellaneous Application for revival and only had the liberty to file a fresh application. It was further contended by the Corporate Debtor that the Financial Creditor being a single homebuyer did not bring the required number of homebuyers within 30 days of the amended provision of IBC, 2016 to continue the insolvency petition. Findings of the Tribunal It was observed by the Tribunal that the Petition was filed by a single homebuyer for a Financial Debt of Rs. 1,56,42,406/-. However the parties entered into Consent Terms dated 11.09.2019 under which the Corporate Debtor accepted to pay an outstanding liability of Rs. 1,55,00,000/-. However, the Corporate Debtor defaulted with respect to payment of Rs. 75,00,000/- to the Financial Creditor. The Tribunal observed that the Tribunal vide an order dated 21.02.2023 restored the Company Petition which was disposed in view of the settlement entered between the parties. The amendment of any statue applies prospectively unless the retrospective effect is explicitly or implicitly provided in the statue. The Amendment prescribing a minimum number of homebuyers for initiating a Section 7 petition is applicable to all pending company petition that are pending final Admission. Thus the above Company Petition is deemed to be withdrawn as per the amendment. With the aforesaid observations, the Tribunal dismissed the petition. Case: S. Ramasubramonian vs Shree Sukhakarta Developers Private Limited Case No. C.P. No. 821/IBC/MB/2019 Counsels for the Applicants Adv. Madhur Rai a/w Adv. Isha Punalekar Counsel for the Respondent Adv. Nausher Kohli Click Here To Read/Download Order

IBC Amendment Prescribing Minimum Number Of Homebuyers Applicable To All Company Petitions Pending For Final Admission: NCLT Mumbai

Udai Yashvir Singh

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