The appellants, claiming to be 'Financial Creditors', filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, for initiating insolvency proceedings against the Respondent, 'Corporate Debtor'. The Adjudicating Authority (National Company Law Tribunal), Principal Bench, New Delhi, dismissed the application, observing that the applicants could not be regarded as Financial Creditors because their advance payment for purchasing a flat could not be considered a 'Financial Debt' due to a stipulation in the MOU regarding assured return payment. The Adjudicating Authority referenced a similar case, Nikhil Mehta & Sons v. AMR Infrastructures Ltd., in its decision.
Anil Mahindroo & Anr (the Appellants) claimed to be 'Financial Creditors' and filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate insolvency proceedings against Earth Iconic Infrastructure (P) Ltd (the Respondent), referred to as the 'Corporate Debtor'. The Appellants and Respondent had executed a Memorandum of Understanding (MOU) and an allotment letter. The Appellants were allotted a flat with reference number ETTS 1959 in the Earth Titanium Studios project developed by the Respondent in Greater Noida, UP. The MOU contained an express promise by the Respondent to guarantee a return on the investment, styled as 'commitment amount', until actual possession. The total sale consideration for the flat was Rs. 20,80,000 plus
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The appellants, claiming to be 'Financial Creditors', filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, for initiating insolvency proceedings against the Respondent, 'Corporate Debtor'. The Adjudicating Authority (National Company Law Tribunal), Principal Bench, New Delhi, dismissed the application, observing that the applicants could not be regarded as Financial Creditors because their advance payment for purchasing a flat could not be considered a 'Financial Debt' due to a stipulation in the MOU regarding assured return payment. The Adjudicating Authority referenced a similar case, Nikhil Mehta & Sons v. AMR Infrastructures Ltd., in its decision.
Anil Mahindroo & Anr (the Appellants) claimed to be 'Financial Creditors' and filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate insolvency proceedings against Earth Iconic Infrastructure (P) Ltd (the Respondent), referred to as the 'Corporate Debtor'. The Appellants and Respondent had executed a Memorandum of Understanding (MOU) and an allotment letter. The Appellants were allotted a flat with reference number ETTS 1959 in the Earth Titanium Studios project developed by the Respondent in Greater Noida, UP. The MOU contained an express promise by the Respondent to guarantee a return on the investment, styled as 'commitment amount', until actual possession. The total sale consideration for the flat was Rs. 20,80,000 plus
…The Adjudicating Authority (National Company…
Reference to the decision in “Nikhil Mehta and…