- Apprentice Lawyer
- Legal Jobs
Soon after homebuyers have been given financial creditor status, the Allahabad Bench has found a certain category of homebuyers to not be financial creditors.
Ajay Walia, the applicant, in this case, booked an apartment with Sunworld Residency Pvt Ltd in 2014 for which he had obtained a loan from HDFC Bank. Two agreements were signed between Walia and Sunworld, first was the Buyers Builder Agreement whereas the second was a Supplementary Agreement whereby Walia was given the option to cancel his booking within 24 months of the disbursement of the loan amount to Sunworld by HDFC.
The Supplementary Agreement also stipulated that Sunworld would pay the interest on loan for this 24 months duration post which Walia was allowed to cancel his booking. As per the Supplementary Agreement, upon cancellation Sunworld was to refund to Walia, a sum of booking plus interest if any delay in making such refund.
A Tripartite Agreement was subsequently entered into between Walia, Sunworld and HDFC bank in 2016 which reaffirmed that it would be Sunworld that would pay the EMI for a period of 24 months. Sunworld, however, failed to pay some of the EMIs as well as the money due to Walia despite several reminders.
Walia sought to trigger insolvency against Sunworld as a financial creditor. Sunworld at the outset challenged the status of Walia as a financial creditor. NCLT took note of the contents of both, Supplementary Agreement as well as the Tripartite Agreement.
While the Supplementary Agreement did confer rights on Walia to obtain a refund upon cancellation, the NCLT noted that through the subsequent Tripartite Agreement, Walia had assigned these rights in favour of HDFC Bank.
In view of the subrogation of rights in favour of HDFC Bank, the NCLT rejected the status of Walia as a financial creditor and dismissed the application.
Advocate Rajeev Singh represented Ajay Walia and Advocate Pranjal Mehrotra appeared for HDFC Bank.
Advocates Manu Khare, R.P Agarwal, and Jahangir Haider appeared for Corporate Debtor (Sunworld).
(Read the order)