Jones Lang Lasalle Building Operations Pvt Ltd Vs Celebration City Projects Pvt Ltd (NCLT Delhi)
This is an application filed by the real estate allottee to the Corporate Debtor, whose claim was rejected by the Resolution Professional on the ground that she ceases to be a real estate allottee on account of an arbitral award dated 25.10.2018 passed in her favor
NCLAT in the matter of Mukul Agarwal Vs. Royale Resinex Private Limited in Company Appeal (AT) (Insolvency) No. 777 of 2020 held that a decree of the civil court will not alter the basic nature of the transaction. The transaction prima facie has to be considered for the purpose of adjudicating the claim and the decree of the Court is a measure of debt and that would be the manner in which it should be heard.
In view of the above position of law, we are inclined to hold that the present petitioner should be treated as the real estate allottee/creditor in class and dealt with accordingly.
FULL TEXT OF THE NCLT DELHI ORDER
The reliefs sought by the applicant is a follows:
“1. Direct the Respondent to recognize the status of the Applicant as a Financial Creditor in the class of allottees;
2. Stay on convening the next CoC meeting until the status of the Applicant is finally adjudicated by this Hon’ble Tribunal;
3. Direct the Respondent to include the information about the claim of the Applicant and reflect the pendency of the present case in, the Information Memorandum to be issued by the Respondent;
4. Direct the Respondent to allow the participation of the Applicant in the CoC meetings;
5. Any other or further relief as deemed fit and proper in the facts and circumstances of this case may also be granted in the interest of Justice.”
This is an application filed by the real estate allottee to the Corporate Debtor, whose claim was rejected by the Resolution Professional on the ground that she ceases to be a real estate allottee on account of an arbitral award dated 25.10.2018 passed in her favor. The operative portion of the award$ reads as follows:
“This has been reiterated by the Apex Court time and again and lastly in 2018 555C442:2018 in the judgment delivered in Fortune (now known as M/ s Hitcon Infrastructure) and Another Vs. Trevor D’Lima and Ors. it had inter alia held as:
“The general principle _for the assessment of damages is compensatory i.e. that the innocent party is to be placed so far as money can do so, in the same position as if the contract had been performed”
The aforesaid proposition remains to hold the _field and has been applied consistently. This rule is more qualified when it comes to the real estate sector. If the seller wants to, limit their liability _for breach of contract under the aforesaid rule, they have to portray that they have performed their obligation in a prudent manner. It may be noted that the onus is on the seller to show his best efforts and bona fides in discharging the obligation. It may be noted that even in the absence of fraud, mere unwillingness to carry out the due could constitute bad faith sufficient for the purchaser to claim damages.”
The defence of the respondent has already been struck off He has nothing to say in the matter.
The claimant has been able to prove his case. The claimant is accordingly entitled to _following reliefs:
(a) The respondent is directed to deliver the possession of the said unit to the claimant (5000 sq. _ft. 9f commercial space in the project at Red Mall) at Nehru Vikas Minar Commercial Project, GT Road Ghaziabad U.P. to the claimant within a period 9f two months from today. Alongwith the allotted unit the respondent is also liable to pay a penalty of Rs 3,58,750 per month on the delayed period i.e. w.el: 22.9.2009 upto the delivery 9f the said unit which amount up to 21.10.2018 is calculated Rs.3,91,03,750. The claimant is also entitled to interest on the afore noted amount which calculated for the afore noted period g 9% per annum calculated to Rs.1,61,30,297 totalling a sum of Rs.5,52,34,047 (Rupees Five crore fifty two lac thirty eight thousand forty seven only),
b) In the alternate if prayer (a) is not adhered to by the respondent and the said unit is not handed over by the respondent to the claimant within the said period 9f two months the claimant will be entitled to the market value of the said unit which is calculated @ 16,000 per sq. ft. By multiplying 5000 sq _ft. g Rs.16,000 per sq. ft. the market value 9f the unit is assessed at Rs.8,00,00,000 (Rupees eight crore only). This amount shall be paid by the respondent to the claimant within two months _failing which the said amount shall carry interest at 12% per annum till the realization. Alongwith the respondent is also liable to pay a penalty of Rs.3,58,750 per month on the delayed period i.e. w.e.f 22.9.2009 upto the delivery 9f the said unit which amount up to 21.10.2018 is calculated g Rs.3,91,03,750. The claimant is also entitled to interest on the afore noted amount which calculated for the afore noted period g 9% per annum calculated to Rs.1,61,30,297 totalling a sum of Rs.5,52,34,047 (Rupees Five crone fifty two lac thirty eight thousand forty seven only).
There is a clause in the award that the applicant in the award would be entitled to enforce the allotment of the unit within 60 days or in default to secure the same by way of a money decree.
On this premise, the claim was made before the Resolution Professional by the present applicant stating that she is a real estate allottee and therefore her claim should be treated in that class. However, this was declined by the Resolution Professional. In the alternative, the Resolution Professional had informed the Petitioner to file it as a financial creditor on the premise that the award was in the form of a decree and therefore she will be treated as a financial creditor.
The Ld. counsel for the petitioner, however, pleaded that the original claim of the petitioner as against the Corporate Debtor was in the nature of the real estate allottee, and on the failure of the Corporate Debtor to give the unit, she invoke the arbitral proceeding resulting in the award.
By the very nature of the original allotment, it could be seen that the applicant/petitioner is only a real estate allottee. The issue of decree should not stand in the way of the RP in admitting the claim of a real estate allottee in a class. To address this contention the Ld. Counsel has relied upon the decision of NCLAT in the matter Mukul Agarwal Vs. Royale Resinex Private Limited in Company Appeal (AT) (Insolvency) No. 777 of 2020 and more particularly in para 11, 12, 13 and 14, which reads as follows
“11. Thus, the claim of the Operational Creditor was in respect of provisions of goods, that is, supply of poly propylene. The mere fact that when the Corporate Debtor did not pay the amount, suit for recovery was filed in the year 2016 by the Operational Creditor, which was also Decreed on 08.09.2016, does not in any manner effect the transaction out of which the amount fell due. The fact that amount was adjudicated and a Decree was passed, in no manner take away the nature of ‘operational debt’. We may notice that under Part-V of Form-3, in Item No.3 following has been mentioned:”
