NCLT Jaipur: Persons To Whom The Flats Are Sold After Completion, Shall Be Counted For Threshold Limit

The National Company Law Tribunal (“NCLT”), Jaipur Bench comprising of Shri Deep Chandra Joshi (Judicial Member) and Atul Chaturvedi (Technical Member), allowed the application filed in Gajraj Jain & Ors. vs. Shiv Gyan Developers Pvt. Ltd. seeking impleadment of additional Financial Creditors to initiate Corporate Insolvency Resolution Process (“CIRP”) of Shiv Gyan Developers Pvt. Ltd. (Corporate Debtor) under Section 7 of the Insolvency and Bankruptcy Code, 2016 (“Code”) as per the Supreme Court’s order ‘Gajraj Jain & Ors. Vs. Shivgyan Developers Pvt. Ltd.’ dated 18.05.2022. The Supreme Court had allowed Gajraj Jain and two other Applicants (“Applicants”) to implead 10% of the homebuyers to the main application so as to comply with the requirements of the Code. The Tribunal by placing reliance on the Supreme Court decision of Manish Kumar vs. Union of India held that persons to whom the flats have already been sold after completing construction, thereof, would still be allottees and would be included for computation of threshold limit under the Code. Background Facts: An Application to initiate CIRP under Section 7 of the Code was preferred by Gajraj Jain and two other Applicants. As per the amendment in Section 7 of the Code, the Supreme Court directed the Applicants to meet the threshold as provided in the amended proviso of Section 7 (1) of the Code. The present application was filed in compliance with the Supreme Court order to impleade 25 applicants holding 17 flats, along with the original allottees (who hold two flats) which comes to 16% of the allotted unit i.e., 120. Further, at the time of filing the Application, the required minimum amount of default was Rs. 1 lakh. Therefore, it was argued by the Applicants that impleading 25 allottees who are holding 17 flats with the Original Applicants meets the requirement as envisaged under proviso second of Section 7 (1) of the Code. Contention of the Corporate Debtor: The Corporate Debtor contended that the Applicants are holding a total of 19 units out of which possession has been given to the allottees of 14 flats with possession of the units and sale deeds executed in their favor. Therefore as per the Corporate Debtor, the same cannot be included in the present application as there is no cause of action remaining in their favor. NCLT Verdict: The NCLT Jaipur Bench allowed the application and by placing reliance on the Supreme Court decision of Manish Kumar vs. Union of India held that persons to whom the flats have already been sold after completing construction, thereof, would still be allottees and would be included for computation of threshold limit under the Code. The Tribunal also relied upon the Supreme Court’s observation in Manish Kumar vs. Union of India that for calculating the total number of allottees, only the number of allotted units in a project shall be considered, irrespective of the number of units constructed. In cases of joint allotments, wherein a single unit is allotted to more than one person, the joint allottees of that unit shall be considered to mean a single allottee. The Tribunal highlighted that in the instant case, the application was filed by the Allottees of 19 allotted units which are more than 10% of the allottees out of a total of 120 allotted units in the same real estate project thereby fulfilling the requirement of proviso second of Section 7(1) of the Code. Case Title: Gajraj Jain & Ors. vs. Shiv Gyan Developers Pvt. Ltd. Case No.: IA (IBC) No. 285/JPR/2020 In IB No. 36/7/JPR/2018 Counsel for Gajraj Jain: Amrita Sarkar, Advocate Counsel for Builder: Sandeep Pathak, Advocate, and Vartika Mehra, Advocate Click Here To Read/Download Order

NCLT Jaipur: Persons To Whom The Flats Are Sold After Completion, Shall Be Counted For Threshold Limit

Sachika Vij

This is a premium content
Available exclusively to
Our subscribers

INR 1099+GST

Tags

Sachika Vij

NCLT Jaipur: Persons To Whom The Flats Are Sold After Completion, Shall Be Counted For Threshold Limit

Sachika Vij

This is a premium content Available exclusively to Our subscribers

INR 1099+GST

Tags

Sachika Vij

This is a premium content
Available exclusively to
Our subscribers