Allowed

In the matter of Monarch Brookfields LLP Ia No. 313 of 2022 in Cp (Ib) No. 2517 of 2018

NCLT17 Mar 2023

Case brief

AI extract

What is this about?

In an application under the Insolvency and Bankruptcy Code, 2016, the Tribunal directed the Resolution Professional to admit a flat buyer's claim for Rs 23,24,760/-, acknowledging payments made directly to the corporate debtor despite inability to prove transfer of initial funds.

What did the court decide?

Directing the Respondent Resolution Professional to admit the Applicant's claim for Rs 23,24,760/-.

In the matter of Monarch Brookfields LLP Ia No. 313 of… — Insolvency and Bankruptcy | NCLT (2023)

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IN THE NATIONAL COMPANY LAW TRIBUNAL MUMBAI BENCH, COURT - II

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IA No. 313 of 2022 IN CP (IB) No. 2517 of 2018

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Under Section 60(5) read with Other relevant provisions and Regulations of the Insolvency and Bankruptcy Code, 2016.

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Sikandar Mulla

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Having address at: P-16, MIDC, Near MIDC Office, Nachane Mirjole, MIDC (rtg), Ratnagiri, Maharashtra- 415 639

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…..Applicant

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Vs.

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Mr. Arun Kapoor Resolution Professional

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Having Registered address at: G-601, Army Co-operative Housing Society, Sector- 09, Nerul (East), Navi Mumbai, Maharashtra- 400 706

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….Respondent

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In the matter of

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Capri Global Capital Ltd.

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… Financial Creditor

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Monarch Brookfields LLP

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… Corporate Debtor

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Order delivered on: 17.03.2023

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Coram:

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Hon’ble Member (Judicial) : Hon’ble Member (Technical) :

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Shri Kuldip Kumar Kareer

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Shri Shyam Babu Gautam

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IN THE NATIONAL COMPANY LAW TRIBUNAL, MUMBAI BENCH, COURT-II

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IA NO. 313 of 2022 IN CP (IB) 2517 of 2018

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Appearances:

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For the Applicant : Mr. Nithish Bangera, CS For the Respondent : Mr. Amir Arsiwala, Advocate

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ORDER

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Per: Kuldip Kumar Kareer, Member Judicial

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This is an Application filed by the Applicant, Sikandar Mulla, seeking inclusion of his name in the list of registered Flat buyers of the Corporate Debtor under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “the Code”).

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The Applicant submits that he was allotted a Flat being Flat No. 402 on the 4^th Floor, “Vermont” (hereinafter called the “original Flat”) in a new residential cum commercial Building named “Monarch Brookefields” (hereinafter called the “Said Building”) being constructed by the Corporate Debtor for a total consideration of Rs. 63,24,760/- Only (Rupees Sixty-Three Lakhs Twenty-Four Thousand Seven Hundred and Sixty Only). As a part of this transaction, a sum of Rs. 40,00,000/- (Rupees Forty Lakhs) was transferred by the Applicant by way of RTGS to the account number given by one Mr. Gopal Thakur who was the Designated Partner of the Corporate Debtor and an Allotment Letter dated 7^th July 2014 was issued to the Applicant for confirming the same. Subsequently, the Applicant realised that the amount so transferred was actually deposited in the account of Monarch Realty Management Services (hereinafter called “Monarch Realty”) instead of Monarch Brookefields LLP, the Corporate Debtor.

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Page 2 of 7

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IN THE NATIONAL COMPANY LAW TRIBUNAL, MUMBAI BENCH, COURT-II

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IA NO. 313 of 2022 IN CP (IB) 2517 of 2018

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In the meantime, the original flat was registered in some other third party’s name. The Corporate Debtor admitted the error and promised to allocate another flat being Flat No. 101 in “Texas” wing (hereinafter called the “new Flat”) and register the same in the Applicant’s name in lieu of the original flat. On getting this assurance, the Applicant paid a further sum of Rs. 9,36,000/- in cash on 17^th July 2014 and Rs. 11,48,000/- via pay slip in the name of the Corporate Debtor on 25^th May 2016. As agreed, an Agreement of Sale dated 25^th May 2016 was executed between the Applicant and the Corporate Debtor for the purchase of the new Flat. On the same day, a further payment of Rs. 2,40,760/- was made to the Corporate Debtor via Cheque No. 07 as part of the consideration towards the new Flat resulting in a total of Rs. 63,24,760/- being paid as the full and final payment towards the purchase. Copies of the payment receipt and the said Agreement are duly annexed to the Application.

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The Applicant submits that he received a Notice from the Financial Creditor on 17^th November 2016 stating that the new Flat registered by the Designated Partner of the Corporate Debtor in the Applicant’s name had been mortgaged with the Financial Creditor without seeking permission from the Applicant. Aggrieved by the conduct of the Corporate Debtor, the Applicant filed a complaint of cheating and fraud by the Designated Partner on 28^th November 2016 at the local police station, a copy of which has been attached to this Application.

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Subsequently, the Corporate Debtor was admitted under Section 7 of the Code and Corporate Insolvency Resolution Process (CIRP) was initiated vide Order of this Tribunal dated 27^th September 2019 . The

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Page 3 of 7

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IN THE NATIONAL COMPANY LAW TRIBUNAL, MUMBAI BENCH, COURT-II

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IA NO. 313 of 2022 IN CP (IB) 2517 of 2018

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Applicant filed a claim before the Resolution Professional (RP) which was admitted and his name was reflected as owner against the new Flat, with a total admitted amount of Rs. 71,92,504/- only. However, after the appointment of Mr. Arun Kapoor as the new RP of the Corporate Debtor, the Applicant’s name was removed from the list of claimants/ homebuyers without notice on the ground that the amount paid by the Applicant was actually credited to some other company and not to the account of the Corporate Debtor. The Applicant argues that the Designated Partners of the Corporate Debtor have indulged in fraudulent transactions by taking cheques and depositing it in different companies, by not depositing the cash in the account of the Corporate Debtor and misappropriating it and by selling a single Flat to two buyers. On the basis of complaints made by the homebuyers, the Designated Partners are currently in jail.

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The Respondent filed a Reply dated 6^th April 2022 to this Application and submits that the present Application is not maintainable as the Applicant cannot be considered as a “Financial Creditor” of the Corporate Debtor since the Applicant has admittedly made no payments to the Corporate Debtor towards purchase of the original Flat. The Applicant’s claim that he realised that the payments were made to a different account after having transferred the amount cannot be countenanced. The Respondent states that the purported Allotment Letter dated 7^th July 2014 itself is an act of fraud and is unreliable. Even if is assumed that the Applicant is a valid allottee of the Corporate Debtor, the disbursal of the consideration amount to the Corporate Debtor cannot be proved. Moreover, the cash transactions as claimed to be made by the Applicant cannot be verified. The Respondent also

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Page 4 of 7

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IN THE NATIONAL COMPANY LAW TRIBUNAL, MUMBAI BENCH, COURT-II

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IA NO. 313 of 2022 IN CP (IB) 2517 of 2018

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submits that registration of the Agreement of Sale cannot be a proof for disbursement of the consideration amount and hence, since the existence of a Financial debt cannot be proved, this Application deserves to be dismissed.

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We have heard the Counsel appearing for the Applicant and the Counsel appearing for the Respondent. On perusal of the relevant documents annexed to this Petition, it is noted that the Applicant had entered into a duly registered Agreement dated 25^th May 2016 for purchasing the new Flat after the Designated Partner of the Corporate Debtor assured him that the initial payment of Rs. 40 Lakhs towards purchase of the original Flat would be treated as consideration for purchasing the new Flat. That is, though such initial payment was made to Monarch Realty, the Designated Partner of the Corporate Debtor transferred the same to the present Corporate Debtor after the Applicant raised the grievance. This fact is evident from the confirmation issued by the Corporate Debtor in the said Agreement wherein the impugned payment of Rs. 40 Lakhs made to Monarch Realty is accounted and accepted as part-payment to the Corporate Debtor in respect of the new Flat. The same is reproduced below:

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“The said payment made as under:

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*Sr. No.*	*Date*	*Cheque/D.D* *No.*	*Amount*
1	07/07/2014	RTGS	40,00,000/-
2	25/05/2016	Cheque “215245”	12,00,000/-
			52,00,000/-

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Page 5 of 7

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IN THE NATIONAL COMPANY LAW TRIBUNAL, MUMBAI BENCH, COURT-II

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IA NO. 313 of 2022 IN CP (IB) 2517 of 2018

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Notwithstanding the above, the transfer of the amount of Rs. 40 Lakhs from Monarch Realty to the account of the Corporate Debtor cannot be countenanced. At this point, it is pertinent to note the summary of the payments made by the Applicant as follows:

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Date	Amount	Mode of paym	ent	Payee name
7^thJuly 2014	40,00,000/-	Bank of (RTGS)	India	Monarch Realty Management Services (Group Company)
17^thJuly 2014	9,36,000/-	Cash		Corporate Debtor
25^thMay 2016	11,48,000/-	Bank of India Slip)	(Pay	Corporate Debtor
25^thMay 2016	2,40,760/-	Kotak (Cheque)	Bank	Corporate Debtor

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The transactions pertaining to the three transfers made in favour of the Corporate Debtor dated 17^th July 2014 and 25^th May 2016 are evidenced by the receipts and Financial Statements attached to the Application and therefore, it is established that the corresponding amounts were indeed transferred by the Applicant to the Corporate Debtor’s account. Hence, we are of the view that the Respondent’s decision to reject the entire claim of the Applicant was erroneous. Though the transfer of Rs. 40 Lakhs to the Corporate Debtor cannot be proved, the transfer of the remaining amounts aggregating to Rs. Rs. 23,24,760/- (Twenty-Three Lakhs Twenty-Four Thousand Seven Hundred and sixty only) via the abovementioned modes of payments ought to be considered by the Respondent while examining the claim of the Applicant.

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In the light of the above, we hereby direct the Respondent RP to admit the Applicant’s claim to the extent of the aggregate amount of Rs.

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Page 6 of 7

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IN THE NATIONAL COMPANY LAW TRIBUNAL, MUMBAI BENCH, COURT-II

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IA NO. 313 of 2022 IN CP (IB) 2517 of 2018

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23,24,760/- (Twenty-Three Lakhs Twenty-Four Thousand Seven Hundred and sixty only). With the above observations, IA No. 313 of 2022 is accordingly allowed and disposed of.

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Sd/-

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Sd/-

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SHYAM BABU GAUTAM KULDIP KUMAR KAREER (MEMBER TECHNICAL) (MEMBER JUDICIAL)

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Anusha 17.03.2023

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In the matter of Monarch Brookfields LLP Ia No. 313 of 2022 in Cp (Ib) No. 2517 of 2018

Case brief

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In the matter of Monarch Brookfields LLP Ia No. 313 of 2022 in Cp (Ib) No. 2517 of 2018

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