Meck Pharmaceuticals And Chemicals Private Limited Vs Accurate Infrabuild Private Limited (NCLAT Delhi)
NCLAT Delhi held that amount advance to Corporate Debtor with view to share profit in real estate project doesn’t qualify as financial debt u/s. 5(8) of the Insolvency and Bankruptcy Code. Thus, application u/s. 7 rightly rejected.
Facts- The present appeal filed under Section 61 of Insolvency and Bankruptcy Code 2016 by the Appellant arises out of the Order dated 17.01.2024 passed by the Adjudicating Authority (National Company Law Tribunal, Ahmedabad Bench-II) in Company Petition (IB) No. 122 of 2022. By the impugned order, the Adjudicating Authority dismissed the Section 7 application. Aggrieved by the impugned order, the present appeal has been preferred by the Appellant.
Conclusion- Held that the Corporate Debtor had agreed to repay the outstanding amount alongwith 15% share of profits on the Madina project. Prima facie, investment made to derive profit on the completion of the Madina Project can be viewed as a transaction having consideration for time value for money thus reflecting commercial effect of borrowing. However, this share of profit has not been made part of the claim in the petition filed under Section 7 of IBC. The present Section 7 application was only limited to the principal and the interest amount. When the Appellant on their own volition have chosen not to exclude share in profit from Part-IV of Section 7 application, the Appellant cannot be seen to claim that the disbursal of Rs 1 Cr. had been made by them with a view to have a share in the profits arising out of the Madina Project. We now come to the contention whether the default had actually arisen. The basis of arriving at the occurrence of default by the Appellant has been the purported completion of Madina Project. This unilateral fixing of date of default has been vehemently contested by the Respondent by stating that the Madina project was not complete. It was contended that the Appellant merely by adverting reference to the agenda item of a Board Meeting called by Corporate Debtor inter alia inviting Meck to participate regarding execution of Sale Deeds in favour of the allottees of the said project cannot substantiate that the project was complete. It has been contended by the Corporate Debtor that the Madina project was still in progress and compliances, both procedural and regulatory, were still pending and hence we are inclined to agree that no occasion for default can be said to have occurred as the debt was not due or payable. Thus, debt and default not having been clearly established, we are of the considered opinion that there is no infirmity in the impugned order rejecting the Section 7 application.
