IBC Cannot Be Used As A Tool For Recovery - NCLT Delhi
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The National Company Law Tribunal Delhi recently observed that the Insolvency and Bankruptcy Code cannot be used as a recovery tool.
“We are of the view that in the present case the applicants are already having demands drafts of amount exceeding the defaulted amount in this petition and moreover IBC cannot be used as a tool for recovery; the settlement has been arrived between the parties. The amount has been paid in excess of the default amount and Ld. Counsel for the applicant has also acknowledged the receipt of above stated demand drafts,” the tribunal noted.
The tribunal was hearing an application filed under Section 7 in 2019 against Oris Infrastructure for a default of Rs. 3.60 lakhs.
The 2 applicants had entered into the space buyer agreement with the realty firm in 2010 where it was mutually agreed that the firm would pay an assured monthly return for 36 months after completion of building or till the date office space is put on lease whichever is earlier.
The construction of the project was completed in 2013 and the occupancy certificate was received in 2017 thereby making the period of assured monthly return to end in 2020.
The tribunal noted in its order that the realty firm had issued two demand drafts in favour of both the applicants in lieu of full and final payment of the assured return towards the allotted unit.
The tribunal also recorded that on earlier on two occasions also settlement deed had been entered into between the parties for settling the default in payment of the assured return.
Therefore, the tribunal proceeded to dismiss the two applications filed by commercial space buyers seeking corporate insolvency resolution process against the realty firm.
“We are of the view that in the present case the applicants are already having demands drafts of amount exceeding the defaulted amount in this petition and moreover IBC cannot be used as a tool for recovery; the settlement has been arrived between the parties. The amount has been paid in excess of the default amount and Ld. Counsel for the applicant has also acknowledged the receipt of above stated demand drafts,” the tribunal noted.
The tribunal was hearing an application filed under Section 7 in 2019 against Oris Infrastructure for a default of Rs. 3.60 lakhs.
The 2 applicants had entered into the space buyer agreement with the realty firm in 2010 where it was mutually agreed that the firm would pay an assured monthly return for 36 months after completion of building or till the date office space is put on lease whichever is earlier.
The construction of the project was completed in 2013 and the occupancy certificate was received in 2017 thereby making the period of assured monthly return to end in 2020.
The tribunal noted in its order that the realty firm had issued two demand drafts in favour of both the applicants in lieu of full and final payment of the assured return towards the allotted unit.
The tribunal also recorded that on earlier on two occasions also settlement deed had been entered into between the parties for settling the default in payment of the assured return.
Therefore, the tribunal proceeded to dismiss the two applications filed by commercial space buyers seeking corporate insolvency resolution process against the realty firm.
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