The National Company Law Tribunal (NCLT), Allahabad bench has held that a homebuyer who substitutes all his rights in favor of the bank while taking a loan cannot claim to be a financial creditor under the Insolvency and Bankruptcy laws.
The Tribunal, while examining the petition filed by the homebuyer to initiate insolvency proceedings against the company, found it to be not maintainable since the agreement annexed to the petition showed commutation of rights in favor of the bank.
While referring to the specific clause in the agreement, the Tribunal said that in case of any default under the loan agreement which results in the cancellation of allotment or if due to any reason whatsoever the allotment is cancelled, any amount payable to the borrower in the event of cancellation shall be payable to the bank. It has been further stated in the agreement that any amount paid to the bank by the builder under the abovementioned clause will amount to a valid discharge of Builder’s liability.
This order is a result of a case instituted by a Gurgaon resident to initiate insolvency proceedings against the Sunworld Residency Private Limited. The Gurgaon resident had booked an apartment in one of the Sunworld Residency’s projects named ‘Sunworld Arista’ located in Noida, Uttar Pradesh for Rs. 1.36 crore approximately.
The Tribunal, however, denying to give the status of a financial creditor to the petitioner, granted him the liberty to claim the refund of the due amount in exercise of his option of cancellation according to the agreement before an appropriate forum.