Tribunal rules against marketing associate's claim as a financial creditor due to lack of credible evidence.
In a significant ruling, the National Company Law Tribunal (NCLT) Chandigarh has dismissed the application filed by RealPro Assets Ltd., which sought recognition as a financial creditor in the insolvency proceedings of Samar Estates Pvt. Ltd. The tribunal, comprising Mr. Khetrabasi Biswal and Mr. Shishir Agarwal, concluded that RealPro Assets, acting as a marketing associate, failed to substantiate its claim with the necessary documentary evidence.
RealPro Assets Ltd., represented by its director Sh. Radhey Sham, had filed the application under Section 60(5) of the Insolvency and Bankruptcy Code (IBC), 2016, seeking to have its claim admitted based on a Memorandum of Understanding (MoU) and internal ledger accounts. The company asserted that it was entitled to be classified as a financial creditor or homebuyer due to an MoU executed with the Corporate Debtor, Samar Estates Pvt. Ltd., for the Ess Vee Apartments project in Panchkula.
The tribunal found that the MoU, dated January 1, 2011, designated RealPro as merely a marketing associate tasked with facilitating sales of residential units, rather than conferring any rights as a homebuyer. The tribunal noted that no Builder Buyer Agreement or similar documentation was presented to support the claim of flat allotment to RealPro Assets.
The tribunal emphasized that under the Insolvency and Bankruptcy Code, credible documentary evidence such as Builder Buyer Agreements or allotment letters is essential to establish claims as a financial creditor. Mere reliance on self-maintained ledger entries was deemed insufficient, especially when contradicted by the Corporate Debtor's official records.
Additionally, the tribunal observed that RealPro's claim was filed after the prescribed deadline, with no satisfactory explanation provided for the delay. The Resolution Professional (RP) had communicated the necessity of submitting claims within the stipulated timeframe, which RealPro failed to adhere to.
The tribunal also addressed the issue of alleged cash transactions exceeding Rs. 53 lakh, purportedly made by RealPro to the Corporate Debtor. The tribunal found that RealPro failed to provide any documentary proof, such as bank statements or receipts, to substantiate these claims, which were contrary to the MoU's stipulations prohibiting cash transactions.
In conclusion, the tribunal upheld the decision of the Resolution Professional to reject RealPro's claim, citing the absence of reliable documentary evidence and the lack of any financial debt payable by the Corporate Debtor to RealPro Assets Ltd. The application was dismissed as devoid of merit, reinforcing the importance of adhering to the procedural and evidentiary requirements under the Insolvency and Bankruptcy Code.
Bottom line:-
Insolvency and Bankruptcy Code - A marketing associate claiming to be a financial creditor or homebuyer must establish its claim with credible documentary evidence such as Builder Buyer Agreements, allotment letters, or agreements for sale. Mere reliance on internal ledger entries or self-maintained accounts is insufficient to confer such status.
Statutory provision(s): Insolvency and Bankruptcy Code, 2016 Sections 5(8)(f), 60(5), 30(6), Regulation 13(IB) of CIRP Regulations, Regulation 6(2)(c) of CIRP Regulations
RealPro Assets Ltd. v. Rahul Jindal, (NCLT)(Chandigarh) : Law Finder Doc id # 2933156
