BEFORE THE NATIONAL COMPANY LAW TRIBUNAL PRINCIPAL BENCH LA. NO,, OF 2020 IN C.P. (I.B) NO. 1756 (PB) OF 2018 IN THE MATTER OF:- JAGAT PAL PALIWAL & ANOTHER ...FINANCIAL CREDITOR VERSUS JASSUM PROPCON PROJECTS PRIVATE LIMITED (UNDERGOING CORPORATE INSOLVENCY RESOLUTION PROCESS) ACTING THROUGH MR. SAPAN MOHAN GARG, RESOLUTION PROFESSIONAL -- CORPORATE DEBTOR AND IN THE MATTER OF:- ABW TOWER CONDOMINIUM ASSOCIATION ACTING THROUGH THE PRESIDENT --APPLICANT VERSUS MR. SAPAN MOHAN GARG, RESOLUTION PROFESSIONAL REGN. NO.: IBBI/PA-002/IP-NO0315/2017-18/10903 JASSUM PROPCON PROJECTS PRIVATE LIMITED. (UNDERGOING CORPORATE INSOLVENCY RESOLUTION PROCESS) .-RESPONDENT INDEX Sr.No. | Particulars Page No. 1. MEMO OF PARTIES A 2. APPLICATION UNDER SECTION 60(5)\(C) OF THE INSOLVENCY AND BANKRUPTCY | |— ag CODE,2016 SEEKING APPROPRIATE DIRECTIONS OF THE ADJUDICATING AUTHORITY AGAINST THE REJECTION OF CLAIM BY THE RESPONDENT AND ANY OTHER RELIEF ALONG WITH ACCOMPANYING AFFIDAVIT, 3. ANNEXURE A-1 Registration No. 018/03678/2019 and the| BO certificate of Registration of Society issued under Section 9(1) of the Haryana Registration and Regulation Societies Act,2012.| ANNEXURE A-2 “Colly” Copy of the Memorandum of Association, bye-laws and the amended bye-laws of the Association ANNEXURE A-3 “Colly”. The copy of the Sample Allotment Letter issued by the Corporate Debtor wherein the clause of IFMSD is mentioned along with the Space Buyer Agreement. ANNEXURE A-4 The copy of the sample Maintenance and Service Agreement. ley 5. ANNEXURE A-5. The copy of the list of members of Association along with their dues. 3-1) ANNEXURE A-6 (“COLLY”) copy of the order of the District Registrar, Firms and Societies, Gurugram dated 15.02.2019 and 01.05.2019. | Ree ANNEXURE A-7 The copy of the Letter dated 18.02.2019 issued by the Corporate Debtor. | ANNEXURE A-8. Copy of the order dated 31.10.2019. [ay jas )Xo-1y9 ANNEXURE A-9 Colly. | Copyof the Email dated 15.11.2019 and the reply of the IRP. (ua-lMy 12. ANNEXURE A-10. Copy of the Email dated 29.11.2019. WSIS) 13. ANNEXURE A-11. copy of the E-mail dated 03.12.2019. 158-155]14. ANNEXURE A-12. 4 -ISF Copy of the E-mail dated 06.12.2019. 15. ANNEXURE A-13. NY. Form CA & Enclosures-ABW Tower Condominium Association- set of documents Part 1 Sent on 23.12.2019 16. ANNEXURE A-14. / 9 Form CA & Enclosures-ABW Tower Condominium Association- set of documents Part 2 Sent on 23.12.2019 17, ANNEXURE A-15. lb0 Form CA & Enclosures-ABW Tower Condominium Association- set of documents Part 3 Sent on 23.12.2019 18. ANNEXURE A-16. le] The Reply of the RP vide E-mail dated 27.12.2019. 19. ANNEXURE A-17. (62-163 The copy of the reminder E-mail dated 03.01.2020. 20. ANNEXURE A- 18. [oy kk | The Copy of the E-mail dated 04.01.2020. 5 24. ANNEXURE A- 19. 166 Form CA & Enclosures-ABW Tower Condominium Association- set of documents 1.2 Sent on 11.01.2020 22. ANNEXURE A- 20. 16 4 /88 Form CA & Enclosures-ABW Tower Condominium Association- set of documents 1.2 Sent on 15.01.2020 23. ANNEXURE A- 21 Form CA & Enclosures-ABW Tower Condominium Association- set of documents 1.2 Sent on 16.01.202024. ANNEXURE A- 22 Form CA & Enclosures-ABW Tower Condominium Association- set of documents 4.2 Sent on 20.01.2020 25. ANNEXURE A- 23 Form CA & Enclosures-ABW Tower Condominium Association- set of documents 4.2 Sent on 29.01.2020 26. ANNEXURE A-24., The copy of the E-mail dated 30.01.2020. 1t3—- 27. Certified copy of the Resolution passed in the favour of Mr. Deepak Bhandari to take legal actions against Jassum Propcon Projects Private Limited. ry 28. a | Vakelainama (45-]46 29. Proof of Service [it THROUGH: a RAJIV VIRMANI LEXSTONE CHAMBERS A-23 LGF South Extension Part-II New Delhi-110049 8447820654BEFORE THE NATIONAL COMPANY LAW TRIBUNAL A PRINCIPAL BENCH 1A. NO. OF 2020 IN C.P. (.B) NO. 1756 (PB) OF 2018 IN THE MATTER OF:- JAGAT PAL PALIWAL & ANOTHER ...FINANCIAL CREDITOR VERSUS JASSUM PROPCON PROJECTS PRIVATE LIMITED (UNDERGOING CORPORATE INSOLVENCY RESOLUTION PROCESS) ACTING THROUGH MR. SAPAN MOHAN GARG, RESOLUTION PROFESSIONAL ... CORPORATE DEBTOR MEMO OF PARTIES 1. ABW TOWER CONDOMINIUM ASSOCIATION Acting Through Shri Deepak Bhandari, President Having its office at: ABW TOWER, Basement-1 IFFCO Chowk, MG Road, Gurugram «APPLICANT VERSUS. 2. MR. SAPAN MOHAN GARG, RESOLUTION PROFESSIONAL. REGN. NO..: IBBI/IPA-002/IP-NO0315/2017-18/10903 EMAIL ID: sapan10@yahoo.com MOB.: 9810502994 ADD: D-54, First Floor, Defence Colony, Delhi, 110024. ACTING FOR JASSUM PROPCON PROJECTS PRIVATE LIMITED. (UNDERGOING CORPORATE INSOLVENCY RESOLUTION PROCESS) ..RESPONDENT THROUGH: RAJIV VIRMANI LEXSTONE CHAMBERS A-23 LGF South Extension Part-I New Delhi-110049 Wb: Q8i0F 31942,BEFORE THE NATIONAL COMPANY LAW TRIBUNAL, | PRINCIPAL BENCH 1A.NO.____OF 2020 IN C.P. (I.B) NO. 1756 (PB) OF 2018 IN THE MATTER OF:- JAGAT PAL PALIWAL & ANOTHER .. FINANCIAL CREDITOR VERSUS JASSUM PROPCON PROJECTS PRIVATE LIMITED (UNDERGOING CORPORATE INSOLVENCY RESOLUTION PROCESS) ACTING THROUGH MR. SAPAN MOHAN GARG, RESOLUTION PROFESSIONAL ... CORPORATE DEBTOR AND IN THE MATTER OF:- ABW TOWER CONDOMINIUM ASSOCIATION ACTING THROUGH THE PRESIDENT --APPLICANT VERSUS MR. SAPAN MOHAN GARG, RESOLUTION PROFESSIONAL REGN. NO.: IBBI/IPA-002/IP-NO0315/2017-18/10903 JASSUM PROPCON PROJECTS PRIVATE LIMITED (UNDERGOING CORPORATE INSOLVENCY RESOLUTION PROCESS) «RESPONDENT APPLICATION UNDER SECTION 60(5)(C) OF THE INSOLVENCY AND BANKRUPTCY CODE,2016 SEEKING APPROPRIATE DIRECTIONS OF THE ADJUDICATING AUTHORITY AGAINST THE REJECTION OF CLAIM BY THE RESPONDENT AND ANY OTHER RELIEF. A. That the instant Application under section 60(5)(c) of the Insolvency and Bankruptcy Code, 2016 is moved by the ABW Tower Condominium Association (“Association/RWA") duly registered with Haryana Registration and Regulation Societies Act,2012 vide Registration No. 018/03578/2019 against the rejection of claim by the Resolution Professional (“Respondent/RP”) filed by the Association Be in form CA.B. That the ABW Tower is the sole project in the Corporate Debtor and A the said tower comprises of 83 shops/ units. Out of the aforesaid shops/ units, 48 such owners are members of the Association. C. That one of the objects of the association as provided in the bye-laws is to act as the Association of Unit Owners of the building complex called the ABW Tower. D. That the Haryana Apartment Ownership Act, 1983 (as amended) provides wide powers to the RWA/ Associations to act on behalf of all the owners in the complex. It further provides that all the acts, deeds and decisions of the RWA/Association are binding on all the owners of that complex. Section 24 of the Haryana Apartment Ownership Act, 1983 provides as under: 24.1] All apartment owners, tenants of such owners, employees of owners and tenants or any other person who may in any manner use property or any part therefore, shall be subject to the provisions of this Act and to the declaration and the bye-laws of the association of apartment owners adopted pursuant to the provisions of this Act. [2] All agreements, decisions and determinations lawfully made by the association of apartment owners in accordance with the voting percentages established under this Act, declaration or bye-laws shall be deemed to be binding on all apartment owners. Section 2 of the above said act provides as under: 2. Application of Act. The provisions of this Act shall apply to every apartment lawfully constructed for residential purposes, integrated commercial complexes, flatted factories, —_‘Information Technology Industrial Units, Cyber Park and Cyber City for the purpose of transfer of ownership of an individual apartment in building whether constructed before for] after the commencement of this Act...... =It is therefore clear that the owners of the units in ABW Tower are members of RWA and all the acts, actions, deeds and decisions of the Association/RWA are binding on all the 83 owners who have shop/units in the Tower. E. That the Applicant is constrained to move the present Application on the following grounds:- i) ii) ili) iv) That the claim of the Association has been wrongly rejected by the Respondent citing the reason that the said claim of the Applicant doesn't fall into the category of the Financial Creditor. That the claim of the Association has been adjudicated by the Respondent which is in violation of the settled principle of law laid down by the Hon'ble Apex Court. That the Resolution Professional, in its zeal to favour the Corporate Debtor has attempted to interpret the law in favour of the Corporate Debtor without considering the fact that the Applicant constitutes more than 90% of the Creditors claim and by illegally keeping the applicant out of the COC, Respondent is trying to hijack the proceedings in COC. That the Resolution Professional, Respondent in the instant Application has wrongly rejected the claim of the Applicant citing a reason that the Association Applicant may not be authorized to file claim on behalf of its owners without considering section 24 and section 2 of Haryana Apartment Ownership Act, 1983. CASE OF THE APPLICANT ye1. Applicant a Registered RWA: That the instant Application is moved by the Association duly registered with Haryana Registration and Regulation Societies Act,2012 vide Registration No. 018/03578/2019 and the certificate of Registration of Society issued under Section 9(1) of the Haryana Registration and Regulation Societies Act,2012 is annexed with the instant Application and marked as ANNEXURE A- 1 and the copy of the bye-laws of the Association is annexed herewith as ANNEXURE A-2. 2. Funds collected by Corporate Debtor in 2005-06 and yet not returned: That the Corporate Debtor in the year 2005-06 had invited applications for the Allotment of Shops/ other Commercial spaces(s) in the project ABW Tower at Village Sukhrauli, Tehsil and District Gurgaon (Haryana)(“ABW Towers”). 3. IFMSD of Rs. 2,72,21,561/- collected from 83 Allottees and members of RWA:That the Corporate Debtor while executing the Allotment letter/ Agreement (“Allotment Agreement”)had charged the Interest Free Maintenance Security Deposit @ 200/- per Sq. ft. of the super area(“IFMSD”). The said amount was over and above the total consideration of the cost of the Commercial Space. In addition to the above,the said amount was transferrable consequent upon transfer of the said Unit(s). 4. It is humbly submitted that the total dues toward the IFMSD is Rs. 2,72,21,561/- (Rupees Two crore SeventyTwoLacs TwentyOne Thousand Five hundred and Sixty one only).The copy of the Sample Allotment Letter issued by the Corporate Debtor wherein the clause of IFMSD is mentioned along with the Space Buyer Agreement is annexed and marked herewith as ANNEXURE A-3 “Colly”. DY5. Maintenance Security of Rs. 81,25,636.02/- also collected from 83 Allottees and members of RWA:That in addition to the above- mentioned payment of IFMSD in terms of the Allotment Agreement, the members and the Allottees of the Applicant Association further executed the Maintenance and Service Agreement(“MSA”) wherethrough the members and Allottees deposited a further refundable Interest Free Maintenance Security equivalent to 3 months maintenance charges at the rate of Rs.19.90/- per sq. ft. per month(“Maintenance Security”). 6. It is humbly submitted that the total dues towards the Maintenance Security aggregates to a sum of Rs. 81,25,636.02/- (Rupees Eighty- One Lacs Twenty-Five Thousand Six Hundred and Thirty-Six and Two Paise Only). The copy of the sample Maintenance and Service Agreement is annexedherewith as ANNEXURE A-4. 7. Total Principal outstanding of Rs. 3,53,47,197/- alongwith Interest of Rs. 3,39,33,309/- aggregating to Rs. 6,92,80,506/-:That the total outstanding inclusive of both the transaction along with interest @12% is Rs 6,92,80,506 (Three Crore Ninety-TwoLakhs Eighty Thousand Five Hundred Six Only). The copy of the list of members of Association along with their dues is annexed herewith as ANNEXURE A-5. 8. Possession delivered in May 2009: That in the instant case the possession has already been delivered to the members and the allottees of the Association and the same is not in dispute in the present case. Moreover, all the members and allottees of the Applicant have duly transferred the Amount of IFMSD andMaintenance Security to the Corporate Debtor and the same has never been disputed by the Respondent. 9. Amounts unpaid despite adjudication and directions by Competent Authority, District Registrar, Gurugram: That the District Registrar, Firms and Societies, Gurugram had directed the Corporate Debtor to handover of IFMSD and Maintenance Security to the RWA vide Memo No. GGM/DIC/DR/310 dated 15.02.2019 and 01.05.2019. It was also directed to handover the entire ABW Tower along with relevant records to the Governing body of RWA.That the copy of the order of the District Registrar, Firms and Societies, Gurugram dated 15.02.2019 and 01.05.2019 is annexed and marked herewith as ANNEXURE A-6 (“COLLY”) 10. Amounts areadmitted by Corporate Debtor: That pursuant to the order and directions of District Registrar, Firms and Societies, Gurugramthe Corporate Debtor handed over the constructive and Legal possession to the Association and sought some more time to reconcile the statements to release the IFMSD and Maintenance Security to the RWA. The copy of the Letter dated 18.02.2019 issued by the Corporate Debtor is annexed herewith and marked as ANNEXURE A-7 11. That it is submitted that the claims in respect of the amounts, which were disbursed by the members and Allottees of the Association in respect of above transactions,were duly submitted by the Association on behalf of the members and Allottees to Respondentin Form CA and the chronology of the events leading to rejection of the claim is as follows: - CHRONOLOGY OF EVENTS LEADING TO REJECTION OF CLAIM12. That vide order dated 31.10.2019 the Hon’ble National Company law Tribunal ("NCLT") has initiated the insolvency proceeding against the Jassum Propcon Projects Private Limited (“Corporate Debtor”) and appointed one Mr. Sapan Mohan Garg as the Interim Resolution Professional (“IRP”) and later appointed as Resolution Professional ("RP"). The copy of the order dated 31.10.2019 is annexed with the instant Application and marked as ANNEXURE A-8. 13. That vide Email dated 15.11.2019 the Applicant requested the RP to send the Public Announcement along with the Relevant Claimant Form in order to file their Claim to which the IRP replied that the appointment is not in his knowledge as the same was never conveyed to him. The copy of the Email dated 15.11.2019 and the reply of the IRP is annexed herewith as ANNEXURE A-9 Colly. 14. That pursuant to the Public Announcement the Applicant moved the FORM CA for submission of claim by Financial creditor in class dated 28.11.2019 vide Email dated 29.11.2019 along with all the relevant documents to the IRP. The copy of the relevant part of the Email dated 29.11.2019 is annexed herewith as ANNEXURE A-10 and the Applicant Association craves the liberty of this Hon'ble Tribunal to produce the copy of the relevant annexure as and when required. 15. That vide E-mail dated 03.12.2019 the IRP acknowledged the receipt of the E-mail dated 29.11.2019 and in the same E-mail the IRP_ gave preliminary observations that the claim of the Applicant doesn’t form financial debt as the amount claimed is interest free loan and the initial test for the treating a financial debt is not passed, hence cannot be considered as Financial Debt. It is pertinent to note that IRP in the same E-mail had advised the Applicants to file Form-F as the claim cethe Applicant falls into the category of ‘any other claim’. The copy of the relevant part of theE-mail dated 03.12.2019 is annexed herewith as ANNEXURE A-11 and the Applicant Association craves the liberty of this Hon'ble Tribunal to produce the copy of the relevant annexure as and when required. 16. That the Applicant vide E-mail dated 06.12.2019 replied to the E- mail dated 03.12.2019 received from Respondent RP and clarified that the claim of the Applicant does fall under the category of Financial Debt. The copy of the relevant part of the E-mail dated 06.12.2019 is annexed herewith and marked as ANNEXURE A-12 and the Applicant Association craves the liberty of this Hon'ble Tribunal to produce the copy of the relevant annexure as and when required. 417. That in continuation of the E-mail dated 06.12.2019, the Applicant sent the following E-mails to the IRP with the supporting documents to substantiate the claims in respect of all the members/non-members of the Applicant: - ‘S.No | Date of E-mail | Heading of the Email Annexure 1 23.12.2019 Form CA & Enclosures- | ANNEXURE ABW Tower | A-13 Condominium Association- set of documents Part1 2. | 23.12.2019 Form CA & Enclosures- | ANNEXURE ABW Tower | A-14 ca CondominiumAssociation- set of a documents Part2 3. 23.12.2019 Form CA & Enclosures- | ANNEXURE ABW Tower | A-15 Condominium Association- set of documents Part 3 That the Applicant Association craves the liberty of this Hon’ble Tribunal to produce the copy of the relevant annexure as and when required in respect of Annexure A-13 to Annexure A-15. 18. That on 27.12.2019 the Respondent RP after perusing the above- mentioned documents which were sent in 3 parts, replied vide E-mail dated 27.12.2019 and pointed out certain discrepancies and further asked for certain documents to substantiate the claim. The contents of the E-mail are not reproduced as the same forms part of the Annexure. The Reply of the RP vide E-mail dated 27.12.2019 is annexed herewith as ANNEXURE A-16 and the Applicant Association craves the liberty of this Hon'ble Tribunal to produce the copy of the relevant annexure as and when required. 19. That on 03.01.2020 another remainder E-mail dated 03.01.2020 was sent to the Applicant. The copy of the reminder E-mail dated 03.01.2020 is annexed herewith as ANNEXURE A-17 and the Applicant Association craves the liberty of this Hon'ble Tribunal to produce the copy of the relevant annexure as and when required. 20. That on 04.01.2020 Applicant vide E-mail dated 04.01.2020 replied to Respondent RP and informing that the collection of documents isin process and will be submitted soon. The Copy of the E-mail dated I 0 04.01.2020 is annexed herewith as ANNEXURE A- 18 and the Applicant Association craves the liberty of this Hon'ble Tribunal to produce the copy of the relevant annexure as and when required. 21. That in relation to the queries raised by the RP vide E-mail dated 27.12.2019 the Applicant submitted the relevant documents through the following Email: - [S.No | Date of E-mail | Heading of E-Mail Annexure 1. 11.01.2020 Form CA &|Annexure A- Enclosures-ABW 19 Tower Condominium Association- set of documents 1.2 2. 15.01.2020 Form CA &|Annexure A- Enclosures-ABW 20 Tower Condominium |Association- set of | documents 1.2 3. 16.01.2020 Form CA &| Annexure A- Enclosures-ABW 21 Tower Condominium Association- set of documents 1.2 4. 20.01.2020 | Form CA &/ Annexure A- | Enclosures-ABW 22 Tower Condominium yer a=Association- set of ] / documents 1.2 5. 29.01.2020 Form CA &|Annexure A- Enclosures-ABW 23 Tower Condominium Association- set of documents 1.2 That the Applicant Association craves the liberty of this Hon’ble Tribunal to produce the copy of the relevant annexure as and when required in respect of Annexure A-19 to Annexure A-23. That after providing all the documents as desired by the Respondent RP vide E-mail dated 27.12.2019, the Respondent RP on 30.01.2020 rejected the claim of the Applicant as being not a financial debt as the IFMSD and Maintenance Security is not the financial debt. The copy of the E-mail dated 30.01.2020 is annexed herewith and marked as ANNEXURE A-24 and the Applicant Association craves the liberty of this Hon'ble Tribunal to produce the copy of the relevant annexure as. and when required in respect of Annexure A-13 to Annexure A-15. SUBMISSIONS OF THE APPLICANT APPLICANT IS A FINANCIAL CREDI AS PER TH PROVISIONS OF IBC,2046 22. Financial Creditor:That in terms of Section 5(7) of IBC, the following two conditions are required to be fulfilled by a person to be qualified as a Financial Creditor: a. There must be a financial debt; and te? ”b. This financial debt must be ‘owed’ to this person. VP 23. Financial Debt:That the definition of term ‘Financial Debt’, is defined in Section 5(8) of IBC as follows: (8) “financial debt” means a debt alongwith interest, if any, which is disbursed against the consideration for the time value of money and includes- (a) money borrowed against the payment of interest; (Emphasis Supplied) It is therefore clear that Financial debt is an inclusive term which has wide and extensive meaning. It means a debt alongwith interest, if any.meaning thereby that debt may or may not be with interest and therefore interest cannot be the governing factor in deciding the nature of debt. 24. Claim: That Section 5 (6) of the IBC Code 2016 defines claim as: (6) “Claim” means- (a) a right to payment, whether or not such rights is reduced to judgment, fixed, disputes, in disputed, legal, equitable, secured or unsecured; (b) right to remedy for breach of contract under any law for the time being in force, if such breach gives rise to a right to payment, whether or not such right is reduced to judgment, fixed, matured, unmatured, disputed, undisputed, secured or unsecured; 25.Amounts raised under a Real Estate Projects:That the explanation added to 5(8)(f) includes any amount raised form an allottee under a real estate project shall be deemed to be an amount having the commercial effect of borrowing. That it is pertinent to point out that the word “any” is used in the explanation which makes it clear that the amount collected from the owners /members of the Applicant Association is the Financial debt and hence the rejection of claim by the Resolution professional is totally wrong. eeAPPLICANT IS A FINANCIAL CREDITOR AS PER INSOLVENCY 5 LAW COMMITTEE REPORT 26. The recommendations made by Insolvency Law Committee are set out hereinbelow in extenso: “RECOMMENDATIONS PROPOSING AMENDMENTS TO THE CODE AND RELEVANT SUBORDINATE LEGISLATION DEFINITIONS Financial debt 1.1 Section 5(8) of the Code defines financial debt’ to mean a debt along with interest, if any, which is disbursed against the consideration for the time value of money and inter alia includes money borrowed against payment of interest, etc. The Committee's attention was drawn to the significant confusion regarding the status of buyers of under construction apartments (“home buyers’) as creditors under the Code. Multiple judgments have categorised them as neither fitting within the definition of financial’ nor ‘operational’ creditors. In one particular case, they have been classified as financial creditors’ due to the assured return scheme in the contract, in which there was an arrangement wherein it was agreed that the seller of the apartments would pay ‘assured returns’ to the home buyers till possession of property was given. It was held that such a transaction was in the nature of a loan and constituted a ‘financial debt’ within the Code. A similar judgment was given in Anil Mahindroo & Anr v. Earth Organics Infrastructure. But it must be noted that these judgments were given considering the terms of the contracts between the home buyers and the seller and are fact specific. Further, the [BBI issued a claim form for “creditors other than financial or operational creditors’, which gave an indication that home buyers are neither financial nor operational creditors. 1.2 Non-inclusion of home buyers within either the definition of ‘financial’ or ‘operational’ creditors may be a cause for worry since it deprives them of, first, the right to initiate the corporate insolvency resolution process (‘CIRP"), second, the right to be on the committee of creditors (“CoC”) and third, the 41 guarantee of receiving at least the liquidation value under the resolution plan. Recent cases like Chitra Sharma v. Union of India and Bikram Chatterji v. Union of India have evidenced the1.5 stance of the Hon’ble Supreme Court in safeguarding the | rights of home buyers under the Code due to their current disadvantageous position. 1.3 To completely understand the issue, it is imperative that the peculiarity of the Indian real estate sector is highlighted. Delay in completion of under-construction apartments has become a common phenomenon and the records indicate that out of 782 construction projects in India monitored by the Ministry of Statistics and Programme Implementation, Government of India, a total of 215 projects are delayed with the time over-run ranging from 1 to 261 months. Another study released by the Associated Chambers of Commerce and Industry of India, revealed that 826 housing projects are running behind schedule across 14 states as of December 2016. Further, the Committee agreed that it is well understood that amounts raised under home buyer contracts is a significant amount, which contributes to the financing of construction of an asset in the future. 1.4 The current definition of ‘financial debt’ under section 5(8) of the Code uses the words “includes”, thus the kinds of financial debts illustrated are not exhaustive. The phrase “disbursed against the consideration for the time value of money” has been the subject of interpretation only in a handful of cases under the Code. The words “time value” have been interpreted to mean compensation or the price paid for the length of time for which the money has been disbursed. This may be in the form of interest paid on the money, or factoring of a discount in the payment. On a review of various financial terms of agreements between home buyers and builders and 42 the manner of utilisation of the disbursements made by home buyers to the builders, it is evident that the agreement is for disbursement of money by the home buyer for the delivery of a building to be constructed in the future. The disbursement of money is made in relation to a future asset, and the contracts usually span a period of 4-5 years or more. The Committee deliberated that the amounts so raised are used as a means of financing the real estate project, and are thus in effect a tool for raising finance, and on failure of the project, money is Y1.6 1.7 a repaid based on time value of money. On a tain! S reading of section 5(8)(f), it is clear that it is a residuary entry to cover debt transactions not covered under any other entry, and the essence of the entry is that “amount should have been raised under a transaction having the commercial effect of a borrowing.” An example has been mentioned in the entry itself i.e. forward sale or purchase agreement. The interpretation to be accorded to a forward sale or purchase agreement to have the texture of a financial contract may be drawn from an observation made in the case of Nikhil Mehta and Sons (HUF) v. AMR Infrastructure Ltd.: “A forward contract to sell product at the end of a specified period is not a financial contract. It is essentially a contract for sale of specified goods. It is true that some time financial transactions seemingly restructured as sale and repurchase. Any repurchase and reverse repo transaction are sometimes used as devices for raising money. In a transaction of this nature an entity may require liquidity against an asset and the financer in return sell it back by way of a forward contract. The difference between the two prices would imply the rate of return to the financer.” Thus, not all forward sale or purchase are financial transactions, but if they are structured as a tool or means for raising finance, there is no doubt that the amount raised may be classified as financial debt under section 5(8)(). Drawing an analogy, in the case of home buyers, the amounts raised 43 under the contracts of home buyers are in effect for the purposes of raising finance, and are a means of raising finance. Thus, the Committee deemed it prudent to clarify that such amounts raised under a real estate project from a home buyer fall within entry (f) of section 5(8). Further, it may be noted that the amount of money given by home buyers as advances for their purchase is usually very high, and frequent delays in delivery of possession may thus, have a huge impact. For example, in Chitra Sharma v. Union of India the amount of debts owed to home buyers, which was paid by them as advances, was claimed to be INR Fifteen Thousand Crore, more than what was due to banks. Despite this, banks are in a more favourable position under the Code since they are financial creditors. Moreover, the general practice is that these contracts are structured unilaterally by construction Rocompanies with littie or no say of the home buyers. A a denial of the right of a class of creditors based on technicalities within a contract that such creditor may not have had the power to negotiate, may not be aligned with the spirit of the Code. 1.8 The Committee also discussed that section 30(2)(e) of the Code provides that all proposed resolution plans must not contravene any provisions of law in force, and thus, the provisions of Real Estate (Regulation and Development) Act, 2016 (“RERA") will need to be complied with and resolution plans under the Code should be compliant with the said law. 1.9. Finally, the Committee concluded that the current definition of ‘financial debt’ is sufficient to include the amounts raised from home buyers / allottees under a real estate project, and hence, they are to be treated as financial creditors under the Code. However, given the confusion and multiple interpretations being taken, at this stage, it may be prudent to explicitly clarify that such creditors fall 44 within the definition of financial creditor, by inserting an explanation to section 5(8)(f) of the Code. Accordingly, in CIRP, they will be a part of the CoC and will be represented in the manner specified in paragraph 10 of this report, and in the event of liquidation, they will fall within the relevant entry in the liquidation waterfall under section 53. The Committee also agreed that resolution plans under the Code must be compliant with applicable laws, like RERA, which may be interpreted through section 30(2)(e) of the Code. It may be noted that there was majority support in the Committee for the abovementioned treatment of home buyers. However, certain members of the Committee, namely Sh. Shardul Shroff, Sh. Sudarshan Sen and Sh. B. Sriram, differed on this matter.” (emphasis supplied) 27. That on the basis of the above-mentioned discussion it is abundantly clear that the amount raised from the Allottees are a financial debt as it has time value of money embedded in them and hence commercial effect of borrowing.APPLICANT IS A FINANCIAL CREDITOR IN TERMS OF [F JUDGMENTS BY HON’BLE SUPREME COURT AS WELL AS HON’BLE NCLAT 28. That in the matter of G. Sreevidhya Vs. Karismaa Foundations Pvt. Ltd. Company Appeal(AT) (insolvency) No. 494 of 2018, this Hon'ble Appellate Tribunal laid the law in respect of who can be the financial creditor which has now become the settled position of law in light of the fact that appeal filed by the respondents in this matter was dismissed as withdrawn by Hon'ble Supreme Court of India vide its order dated 04.07.2019 in Civil Appeal No. 3376/2019. This Hon'ble Appellate Tribunal laid down the following law while deciding the aforesaid matter: 6. Section 3(11) of 1&B Code defines ‘debt' as a liability or obligation in respect of a claim which is due from any person and includes a ‘financial debt' and ‘operational debt’. The term ‘claim’ defined under Section 3(6) of the same Code means a right to payment in any of its manifestations including right to remedy for breach of contract giving rise to a right to payment. Section 5(7) of 1&B Code defines the legal expression ‘financial creditor’ as a person to whom a financial debt is owed which also includes an assignee or a transferee. Section 5(8) of 1&B Code defines the term ‘financial debt' as a debt along with interest, if any, which is disbursed against the consideration for the time value of money and includes the money borrowed against the payment of interest, amounts raised under credit facility, purchase facility, issue of bonds, notes, debentures, Joan stock or similar instrument, amount of liability in respect of any lease or hire purchase contract, receivables other than on nonrecourse basis, amount raised under any other transaction including forward sale or purchase agreement having commercial effect of a borrowing, derivative transactions in connection with protection against fluctuation in price, counter indemnity obligations in respect of guarantee, indemnity, bond, letter of credit or any instrument issued by a bank or financial institution and the amount of any liability in respect of any guarantee or indemnity with reference to the aforesaid transactions. This Appellate Tribunal, while dealing with theinterpretation of ‘financial debt' in ‘Shailesh Sangani Vs. Joel Cardoso, Company Appeal (AT) (Insolvency) No. 616 of 2018 decided on 30th January, 2019' observed as under:- 6. A plain look at the definition of ‘financial debt‘ brings it to fore that the debt alongwith interest, if any, should have been disbursed against the consideration for the time value of money. Use of expression ‘if any’ as suffix to ‘interest’ leaves no room for doubt that the component of interest is not a sine qua non for bringing the debt within the fold of ‘financial debt. The amount disbursed as debt against the consideration for time value of money may or may not be interest bearing. What is material is that the disbursement of debt should be against consideration for the time value of money. Clauses (a) to (i) of Section 5(8) embody the nature of transactions which are included in the definition of ‘financial debt’. It includes money borrowed against the payment of interest. Clause (f) of Section 5(8) specifically deals with amount raised under any other transaction having the commercial effect of a borrowing which also includes a forward sale or purchase agreement. It is manifestly clear that money advanced by a Promoter, Director or a Shareholder of the Corporate Debtor as a stakeholder to improve financial health of the Company and boost its economic prospects, would have the commercial effect of borrowing on the part of Corporate Debtor notwithstanding the fact that no provision is made for interest thereon. Due to fluctuations in market and the risks to which it is exposed, a Company may at times feel the heat of resource crunch and the stakeholders like Promoter, Director or a Shareholder may, in order to protect their legitimate interests be called upon to respond to the crisis and in order to save the company they may infuse funds without claiming interest. In such situation such funds may be treated as long term borrowings. Once it is so, it cannot be Said that the debt has not been disbursed against the consideration for the time value of the money. The interests of such stakeholders cannot be said to be in conflict with the interests of the Company. Enhancement of assets, increase in production and the growth in profits, share value or equity enures to the benefit of such stakeholders and that is the time value of the money constituting the consideration for disbursement of such amount raised as debt with obligation on the part of Company to discharge the same. Viewed thus, it can be [8cases the amount taken by the Company is in the said without any amount of contradiction that in such 9 nature of a ‘financial debt’. 7. Dwelling on the scope of provisions of Section 7 of |&B Code dealing with triggering of Corporate Insolvency Resolution Process at the instance of ‘Financial Creditors' and converging on the procedure regulating initiation of such process, the Hon'ble Apex Court held in ‘Swiss Ribbons Pvt, Ltd. & Anr. Vs, Union of India & Ors.', Writ Petition (Civil) No. 99/2018 (MANU/SC/0079/2019) as follows:- "36. A perusal of the definition of “financial creditor" and “financial debt" makes it clear that a financial debt is a debt together with interest, if any, which is disbursed against the consideration for time value of money. It may further be money that is borrowed or raised in any of the manners prescribed in Section 5(8) or otherwise, as Section 5(8) is an inclusive definition. On the other hand, an "operational debt" would include a claim in respect of the provision of goods or services, including employment, or a debt in respect of payment of dues arising under any law and payable to the Government or any local authority. (Emphasis Supplied) RESOLUTION PROFESSIONAL CANNOT ADJUDICATE A CLAIM — SETTLED POSITION IN ‘SWISS RIBBON’ JUDGMENT OF HON’BLE SUPREME COURT AND ‘RAJENDRAN’ AND ‘DYNEPRO’ OF HON’BLE NCLAT 29. That in the matter of “S.Rajendran Vs. Jonathan Mouralidarane” 2019 SCC OnLine NCLAT 758 the Hon'ble NCLAT has held that the resolution Professional cannot adjudicate the claim. Relevant extract of the same is a follows:- “Having heard leamed Counsel for the Appellant, we are of the opinion that the ‘Resolution Professional’ had no jurisdiction to “determine” the claim as pleaded in the Appeal. He could have only “collated” the claim, based on evidence and the record of the ‘Corporate Debtor’ or as filed by Jonathan Mouralidarane (‘Financial Creditor’). If an aggrieved person thereof moves before the Adjudicating Authority and the Adjudicating Authority after going through alf the records, comes to a definite conclusion that certain claimed amount ispayable, the ‘Resolution Professional’ should not have moved SO) in Appeal, as in any manner, he will not be affected.” (Emphasis supplied) 30. In “Swiss Ribbons Pvt. Ltd. & Anr. vs. Union of India & Ors.— 2019 SCC OnLine SC 73”, the Hon‘ble Supreme Court has already held that the ‘Resolution Professional’ has no jurisdiction to decide the claim of one or other party. This Appellate Tribunal has also held earlier that the ‘Resolution Professional’ can only collate the claim. Relevant excerpts from the abovesaid judgment is reproduced below: ..RESOLUTION PROFESSIONAL HAS NO ADJUDICATORY POWERS. 58. It is clear from a reading of the Code as well as the Regulations that the resolution professional has no adjudicatory powers. Section 18 of the Code lays down the duties of an interim resolution professional as follows: —18. Duties of interim resolution professional —(1) The interim resolution professional shall perform the following duties, namely— (a) collect all information relating to the assets, finances and operations of the corporate debtor for determining the financial position of the corporate debtor, including information relating to— (i) business operations for the previous two years; (ii) financial and operational payments for the previous two years; (iii) list of assets and liabilities as on the initiation date; and (iv) such other matters as may be specified; (b) receive and collate all the claims submitted by creditors to him,pursuant to the public announcement made under Sections 13 and 15; (c) constitute a committee of creditors; (d) monitor the assets of the corporate debtor and manage its operations until a resolution professional is appointed by the committee of creditors;(e) file information collected with the information utility, nd) necessary; and (f) take control and custody of any asset over which the corporate debtor has ownership rights as recorded in the balance sheet of the corporate debtor, or with information utility or the depository of securities or any other registry that records the ownership of assets including— (i) assets over which the corporate debtor has ownership rights which may be located in a foreign country; (ii) assets that may or may not be in possession of the corporate debtor; (iii) tangible assets, whether movable or immovable; (iv) intangible assets including intellectual property; (v) securities including shares held in any subsidiary of the corporate debtor, financial instruments, insurance policies; (vi) assets subject to the determination of ownership by a court or authority; (g) to perform such other duties as may be specified by the Board. Explanation.—For the purposes of this section, the term —assetsll shall not include the following, namely— (a) assets owned by a third party in possession of the corporate debtor held under trust or under contractual arrangements including bailment; (b) assets of any Indian or foreign subsidiary of the corporate debtor; and (c) such other assets as may be notified by the Central Government in consultation with any financial sector regulator. ll 59. Under the CIRP Regulations, the resolution professional has to vet and verify claims made, and ultimately, determine the amount of each claim as follows: —10. Substantiation of claims.—The interim resolution professional or the resolution professional, as the case may be, may call for such other evidence or clarification as he deems fit from a creditor for substantiating the whole or part of its claim.\I xxx xxx xxx —12. Submission of proof of claims.—(1) Subject to sub-regulation (2), a creditor shall submit claim with proof on or before the last date mentioned in the public announcement. (2) A creditor, who fails to submit claim with proof within the time stipulated in the public announcement, may Sesubmit the claim with proof to the interim resolution? professional or the resolution professional, as the case may be, on or before the ninetieth day of the insolvency commencement date. (3) Where the creditor in sub-regulation (2) is a financial creditor under regulation 8, it shall be included in the committee from the date of admission of such claim: Provided that such inclusion shail not affect the validity of any decision taken by the committee prior to such inclusion. 13. Verification of claims.—(1) The interim resolution professional or the resolution professional, as the case may be, shall verify every claim, as on the insolvency commencement date, within seven days from the last date of the receipt of the claims, and thereupon maintain a list of creditors containing names of creditors along with the amount claimed by them, the amount of their claims admitted and the security interest, if any, in respect of such claims, and update it. (2) The list of creditors shall be — (a) available for inspection by the persons who submitted proofs of claim; (b) available for inspection by members, partners, directors and guarantors of the corporate debtor; (c) displayed on the website, if any, of the corporate debtor; (d) filed with the Adjudicating Authority; and (e) presented at the first meeting of the committee. 14. Determination of amount of claim.—(1) Where the amount claimed by a creditor is not precise due to any contingency or other reason, the interim resolution professional or the resolution professional, as the case may be, shall make the best estimate of the amount of the claim based on the information available with him. (2) The interim resolution professional or the resolution professional, as the case may be, shall revise the amounts of claims admitted, including the estimates of claims made under sub- regulation (1), as soon as may be practicable, when he comes across additional information warranting such revision.|l It is clear from a reading of these Regulations that the resolution professional is given administrative as opposed to quasi-judicial powers. In fact, even when the resolution professional is to make a —determination\| under Regulation 35A, he is only to apply to the Adjudicating Authority for appropriate relief based on the determination made as follows: we :—354. Preferential and other transactions —(1) On or before 24 the seventy-fifth day of the insolvency commencement date, the' resolution professional shall form an opinion whether the corporate debtor has been subjected to any transaction covered under sections 43, 45, 50 or 66. (2) Where the resolution professional is of the opinion that the corporate debtor has been subjected to any transactions covered under sections 43, 45,50 or 66, he shall make a determination on or before the one hundred and fifteenth day of the insolvency commencement date, under intimation to the Board. (3) Where the resolution professional makes a determination under sub-regulation (2), he shall apply to the Adjudicating Authority for appropriate relief on or before the one hundred and thirty-fifth day of the insolvency commencement date. 60. As opposed to this, the liquidator, in liquidation proceedings under the Code, has to consolidate and verify the claims, and either admit or reject such claims under Sections 38 to 40 of the Code. Sections 41 and 42, by way of contrast between the powers of the liquidator and that of the resolution professional, are set out hereinbelow: —41. Determination of valuation of claims—The liquidator shall determine the value of claims admitted under Section 40 in such manner as may be specified by the Board. 42. Appeal against the decision of liquidator—A creditor may appeal to the Adjudicating Authority against the decision of the liquidator accepting or rejecting the claims within fourteen days of the receipt of such decision. \l It is clear from these Sections that when the liquidator —determinesll the value of claims admitted under Section 40, such determination is a —decision\l, which is quasi-judicial in nature, and which can be appealed against to the Adjudicating Authority under Section 42 of the Code. 61. Unlike the liquidator, the resolution professional cannot act ina number of matters without the approval of the committee of creditors under Section 28 of the Code, which can, by a two-thirds majority, replace one resolution professional with another, in case they are unhappy with his performance. Thus, the resolution professional is really a facilitator of the resolution process, whose adminis ive functions are overseen by the commit oi creditors and by the Adjudicating Authority. (Emphasis Supplied) 31. In ‘M/s. Dynepro Private Limited’ vs. Mr. V. Nagarajan — Company Appeal (AT) (insolvency) No. 229 of 2018 etc.’ ThisAppellate Tribunal by its judgment dated 30th January, 2019 held that a y ‘Resolution Professional has no jurisdiction to decide the claim of one or other creditor, including ‘Financial Creditor’, ‘Operational Creditor’, ‘Secured Creditor’ or ‘unsecured Creditor’. Referring to sub-section (6) of Section 60 of the ‘1&B Code’, this Appellate Tribunal further observed that after completion of the period of moratorium, a suit or application can be filed against the ‘Corporate Debtor’. ACTS OF THE RESOLUTION PROFESSIONAL IN VIOLATION OF THE PROVISIONS OF IBC,2016 32. That the resolution professional has acted beyond its jurisdiction by deciding the claim which he could not have considering the settled principle of law in plethora of judgement of Hon'ble Supreme Court of India and Hon'ble NCLAT. 33. That the resolution professional has acted with a malafide intent of defeating the claim of the Applicant by trying to help the Corporate Debtor. The Applicant says so because the claim filed by the Applicant constitutes more than 90% of the total creditors. By rejecting the claim of the Applicant, the Respondent RP has conveniently kept the applicant out of COC meetings and therefore is freely furthering the illegal cause propounded by the corporate debtor. 34. That the Resolution professional has attempted to dislodge the Applicant Association from its office during its visit to Association's office. It is pertinent to note that the said conduct of the Respondent is reflective of its unprofessionalism & devisive methodologies yeeadopted to threaten the Applicant association which is an offshoot oe v a statutory act viz. Haryana Apartment ownership Act 1983. 35. That the Resolution Professional has acted malafide as much as against the interest of Applicant as has violated the principles laid down by Hon'ble Supreme Court of India in Swiss Ribbon and therefore not apt to act as Resolution Professional in the instant case. The Resolution Professional has intentionally delayed the inclusion of Applicant in the list of Claimant to serve the illegal designs of Corporate Debtor. The Resolution Professional has neither displayed the information of the Corporate Debtor on the Website nor has shared the same with the Applicant in violation of CIRP regulations and is accordingly liable for disciplinary proceedings under IBBI Regulations for which Applicant is moving appropriate Application to IBBI. 36. It is therefore prayed by the Applicant Association that the following prayers be allowed in the interest of justice. 37. PRAYER In view of the aforementioned facts and circumstances it is most respectfully prayed that the Hon'ble Tribunal may be pleased to: A. Allow the present application and set aside the opinion formed by the Respondent vide email dated 30.01.2020. B. In alternative direct the Respondent to admit the claim filed by the Applicant in the category of Financial Debt and form the Applicant a part of COC. C. Pass any other order as deem fit in the interest of Justice.Date (¢o%] 222 Place New Deny ene” RAJIV VIRMANI LEXSTONE CHAMBERS A-23, LGF, SOUTH EXTENSION-II NEW DELHI-110049i= xt INDIA NON JUDICIAL + INDL242457281647228, Certificate Issued Dato 1 15-Feb-2020 04:00 PM. ‘Account Reference + IMPACG (IV) di720603/ DELHY/ DL-DLH Unique Doc. Relerence + SUBIN-DLDL72060357552559904421S Purchased by ¢ DEEPAK BHANDARI Description of Document 2 Anlicle 4 Atidavit Property Description + Not Applicable ‘Consideration Price (Rs,) 10 (Zero) Xi First Party { DEEPAK BHANDARI ¢ ‘Second Party + Not Applicable ( ‘Stamp Duty Paid By 3 DEEPAK BHANDARI ew ‘Stamp Duty Amouni(Rs.) 110 (Ten only) i if % Ve a WG eke hence Se a - NI} 3 Phanus tency te egamacy on nour of ho cerca f 3: incave ot any docrepancy eauemlom the Compaen aes SSBEFORE THE NATIONAL COMPANY LAW TRIBUNAL &S PRINCIPAL BENCH LA. NO,, OF 2020 IN C.P. (I.B) NO. 1756 (PB) OF 2018 IN THE MATTER OF:- JAGAT PAL PALIWAL & ANOTHER «FINANCIAL CREDITOR VERSUS JASSUM PROPCON PROJECTS PRIVATE LIMITED. (UNDERGOING CORPORATE INSOLVENCY RESOLUTION PROCESS) ACTING THROUGH MR. SAPAN MOHAN GARG, RESOLUTION PROFESSIONAL .. CORPORATE DEBTOR AND IN THE MATTER OF:- ABW TOWER CONDOMINIUM ASSOCIATION ACTING THROUGH THE PRESIDENT -- APPLICANT VERSUS MR. SAPAN MOHAN GARG, RESOLUTION PROFESSIONAL REGN. NO.: IBBI/IPA-002/IP-NO0315/2017-18/10903 JASSUM PROPCON PROJECTS PRIVATE LIMITED IERGOING CORPORATE INSOLVENCY RESOLUTION PROCESS) ..RESPONDENT AFFIDAVIT VERIFYING APPLICATION besa Bhandari Son of Sh. Bhushan bhandari, aged about 52 year, een of W-5/34, Sainik farms, New Delhi, do hereby solemnly affirm / Ke ‘and declare as under: 1% ( " 4) \ that | am the President of ABW Tower Condominium Association \ vw 2 Vf and duly authorised vide Resolution dated 17.06.2019 and XO) “s competent to swear this Affidavit. = Yat say that | have read and understood the contents of the accompanied Application and | say that facts stated therein are true and correct to my information as derived from records of the case. 3. | state that the documents filed along with the Appligation are true copies of their respective originals. ( IEPONENT VERIFICATION ProsidentV9 FEB 202 |, the above named deponent do hereby verify on day of ebruay (99) 2020 that the facts stated hereinabove are true and correct to my information and no part of it is false and nothing material been concealed therefrom. Prosident~ Department:of Industries & Commerce, Haryana ANNEORE At 2 ch, Forms. of Registration to be Issued under Ser clon 9,1) ofthe Haryana Registration sind Regulation of Socteting 202" : : + (Seer 6 aid rule) a ‘Cortifiéate.of Reglstration of Society _ {Pereby certify that a Saciely boaring the Registration Number and name as undermentioned has beon registered ths (09) Jay + 5 an] month (20¥8] year é 09] day lunder the Haryana Registration and Regulation of Sobietes Act, 2012 (Haryana Act No.4 of 2012). Stale Code" | Distt Code Yeor OfRegisvaton | (ERIGTIAE et tye Erte] Regletered Office Address |” «Name Ofthe Society ‘ggied indo 2000134659 IMPORTANT PROVISIONS OF THE HRRS ACT 2012 TO BE FOLLOWED * One Flat one'vota. - TG te FS ae #4 Collegium Schome to bs ajpiuvedl fran District Reditrar if tetnbeié strength is tore than 1000. *Admiristratorfapointed will not enrol new meébers; incur capital expenclture.and give employment the society. Sor ¢\ 4"Temms of Guveming Body qotto boujore than yeers.< <2 f : sk tug, Member to-bé not losa.than 24. yaar age. . x Office bearers of society (Threa to twonty one). ‘General Body and ‘other mestiig should be eonduefed wilh “45% (Gee-entire Provisions) ° ‘ = a f Submisslon-of matidatory Anrual Rstums Le: fst of riemibers, ist of members of clleglu ist of office boarers, Annual épart Ee ‘on workdig.Balarice Sheet & Audtors Repot, Copy of specalresolaton otherwise shall atiact pendlles & fines aa pet eons fisions of Act. oe a . * os " a [ews ot oe Apetrial ieis se aa be eligible fo contest the elections, ties *" Proxy voting’not allowed, fe Bet a re ce ‘ i Gomori Assiietin covered tndst Ajeliment Ownership Act 1083 Is 10 be formed by ownérs pny: ~ Election obseiver may be appelnted by Diet Registra or on request ef Soclely @ | quoru Lest mécting 40%, 2nd migeting - 25% fad 3rd meting“oo . / . ANNEXVAE ALG) Memorandum of Association 3 ) 1 |” Subject] 5 Description 2 Name of the | ABW TOWER CONDOMINIUM ASSOCIATION Society _ : 3 Turisdiction | Gurugram 4 ‘Aims & | The Objectives, which are specific to a society, shall be . ‘Objects-of the | enumerated below. Some of the indicative objectives couid . ei Society be as unde: _ > 2 |To be and to act as the Association of Apartment owners of the building called ABW Tower, IFFCO Chowk, Gurugram (hereinafter called “the said Building”) ‘ b, {To ensure that the complex is properly managed, mainiained and administered in a manner compatible with the standards ad expectations of ‘the unit owners; o. ‘To invest of deposit moneys; 4. | To provide for the maintenance, repair and replacement of the common area) 3 and facilitis by contribution from the Apartment owners and if necessary by Q raising loans for that purpose; ¢.~~ | Toretain and rent or license if possible suitable portions of the common areas .| to outsiders for commercial purposes end to accutnulate the common profit for building up a reserve fund. ¢. | To advance with the consent of the apartment owners, any alort team loans fo any apartment owner in case of any emergent necessity and to provide for the repayment thereof in lump sum or in instalments, wed bor’To establish and carry on, its own account or jointly with dividuals or institutions, educational, physical, social and recreative activities for the benefit of the unit ovmers. To frame rules with the approval of the general meeling of the Association and after consulting the competent authority. ‘ To enter into any arrangements with any Government(s) or authorities whether Central, State, municipal, local or any other person, thai may seem conducive to the objects of the Sooiety. To purchase, fake on Tease or in exchange, hire or olberwise aoquire any movable or immovable propérty, and in partioular any land, building, pleat | . | @Pparatus, appliances, trades, trademarks, licenses,- permits, intellectual Property rights (IPRs), and any rights or privileges ‘necessary or convenient for the purpose of meeting the objects of the Association, To establish; suppor, or aid in the establishment of association, funds and trusts as may be required in furtherance of the objects of the Association, ‘The income and property of the Society/Association howsoever derived sball be solely utilized and applied towards the promotion of the aims and objects 5 sot forth in the Memorandum of the Society. The funds, properties, assets and all other resources, present and future of the Society shall be utilized for | any or all the purposes or objects of the society as stated above and also for all other similar activities in furtherance of ideals of truth and non violence. To establish, support, or aid in the establishment of associations, instifutions, funds and trusts as may be required in furtherance of the objects of theWy 33 Society. [To do all things necessary or and otherwise provide for their welfare cxpedion forthe attainment of the objects specified in these byelaws. 5. | The management of the affairs of the Soclety/Assoolation i entmusted Ta accordance with the Rules & Regulations of the Spciety/Association to a Governing Body of which the first members are SL Name - |) Address Occupation | Signatures | Designation No} 5 ae 1 [Deepak Bhandari | 201-A, ‘ABW, | Business President + |'Towers, IFFCO . 16 : Chowk, Gurugram | 2 |Ms. ArtiJain | Unit No. 15, ABW, | Business ‘(2 | Secretary “.". | Towers,” IFFCO ar . Chowk, . 3 | Mr. Arash Unit No. — 301, | Business «| View poe eee [ve _ | President Gurugram _ -|4 |M&“Manjest| Unit No. 202, |Sel& | easter * a ABW, =‘ Towers, oh Singh IFFCO. Chow, | omployed Nbr . . Gurugram 3__| Me. Harish Seth | Unit No. 10, ABW, | Business ~ | Ex Member Towers, IFFCO A otk Chowk, Gunagrem 6 [Mz Vijay Shankar |Unit “No. . 403, | Business F Bx. Member —_ ABW, Towers, os “gpa IFFCO Chowk, . Gurus 7 Baerjee [RCO ~ Chowis Mi. Sidharth | Unit’ No. 201, | Business Tix Member , ABW, _ Towers, i .(wi) ‘o establish and conduct educational, physical, socal aad recreational activities for the benefit ofthe unit owmers on its own acoouat oe Jointly with individuals or institutions; (vil) to fame rules regarding establishment of any provident fund for the bonefit of full-time employees of the association. as required under the Jaw ofthe land, efter following the prescribed procedure; il tings necessary or/and otherwise provide for the aiaTamiear OF the objects specified in these bye-laws, @& Hie Association shall not act beyond the scope of Ts Gbjecls wikowrt ultably amending the provisions ofthese bye lav forthe pevoon 5._| Affiliation Should there be any Federation of unit owners in the locality in which the ABW. Tower i: . is situated, the Association may become a member thereof and pay the | Sums from time to time payable to such Federation under the rules thoes CHAPTER Membership and the Association of Unit Owners on 6. |Terms of admission of Members @ Every Petson who owns a unit in the ABW Tower (ABW Toner Thousand Only as membership fee, @ Each owner, on being a member, shall be allowed one share of Te Thee value of Rupees’ 100/- in Tespect of the cach of the units uxider his ownership. Every unit owner must hold: at least one share of the Association and the Joint owners shiall hold the share jointly. | Gi) . Bach unit ower shall receive a copy of the. bye-laws in electronic fom for their -of which » hard copy may also be supplied on demand, - . qv) finkieitencs, the successor-in-interest shall autoniatically become mea ‘member on payment of the applicable maetabership fees Upon any unit ower transfering higher unit by way of aay will, Gt or sale, or an unit becoming liable to transfer on account of natural Further provided that wherever the Association permits any such transfer, the seller/transferor or the buyer/transféree, as tmutually settled between the patties, shall be liable to pay a one-tnie transi foe ot Rs.20/- Per Sq. Ft to the Association, ® On the death oF an unit owner, the unit shall be transfered to the person GF Persons to whom the owner bequeaths the same by his or her Tominztion or will orto the legal heirs of his or her estate, in case he or she has not madé any specific bequest of the unit, a (vi) ‘Where uny legatee is « minor, the unit ovmer shall appoint a guardian oF qTave cory9S - [~ such minor to exercise powers and perform the functions required under these bye-laws. 7._| Joint Owners Where a unit has been allotted in favour OF two oF more persons jointly, they Buy ‘be jointly entitled to the ownership ofthe unit and. the of the sociation in such case may be issued in their joint names However, the person ‘Whose name stands fist inthe share certificate sll have the right Yo re Provided that such person, whose name stands fist in the share certificate; may transfer such right of vote fo any one of the other -joint owners, 8._[Disqualifications | © [No unit owner shall Ge entitied to vote Oa he questions of the election of ‘Rlembers ofthe Board or the President, Secretary, ‘Treasurer or any other office- bearer of be entitled to Stand for election to such office if he or she is in arrears of any payment to the Association on account of common maintenance charges, utility bill payments, common areas user charges ete, on the first day of the Cx —} monith of the election for more than 60 days, 9._| Powers, Functions and Duties of Association . © © [Tite Association will be responsible for comple administration of the common facilities. and services of the unit complex and sball bs competent to exercise all powers in this behalf e.g. preparation and approval of the annual budget, determination and collection of monthly Contiutions ffom the members, placing demand for aay addition’ contribution occasioned by aay unforeseen liability interacting with all { coer ekt oF semi-government agencies etc. in furtherance of the ; -— o¥erall management of the unit complex in an efficient manner G2) _] Except as otherwise provided, resolutions of the Association shall require ~ | approval by’ majority of owners, present and Voting, casting their votes -in the manner provided in clauses'17.end 18 of the bye-laws. 10. | Place of meetings” ) Meoiings of tie Association shall be held elther af the ABW Tower ‘Complex or any suit le Place convenient to the owners as may from time to trac te A designated by the Association, 1i. | Annual General Meeting ©] The first general mesting ofthe aicmbers of the Assoolaion WH be held on fo consider and approve these bye-laws, |G) [The Anpual General Meeting of the Association shall be held every year see during the second quarter of the financial year (uly to September) so as to consider, approve and adopt the annual acocune or the Association and transact all sich business a3 it may be required to do. | 12, [Extra-ordinary or Special General Meetings © |The Association may hold its extr-ordinary or apedial general meetings as and when required. : Frovided that the Board of Managers shall convene a special or Giamordinary general meeting of the Association upon a requisition signed by 1/3" of the members, or as & when so directed by the Distr Registrar of Societies or the Housing Commissioner or any other officer | a Y . coP — TRU@ | Anotice of 14 days, indicating the me, date and venue, shall be given to » / the members for any general meeting. : Frovided that such notice may be of a shorter dutation if not L objected by at least 1/3" of the members, : rbe sent to the concermed offices of the District Register madlor me, | Quorum and Voting ~| Housing Commissionei, if these offices are not electronically connected, @" [The quorum for every general meeting, ‘annual or special, shall be 4054 . of the members, : ® sont Stall Ge one-vote Zor cach unl, which may be exirolsed by the Joint member on authority of the member, : Git) | Every vote, be it exercised by.the member or by the duty authorized joint member, shall be cast in person, duly endorsed to the Si of the Association, 15. Adjourned Meetings @ [A gonctal meeting ofthe Association may be adjoutned Fike ‘quorum for such meeting is not complete. - {G) [It shall be competent for the Board of Managers fo convene an adjoumed -__[ Seneral mecting efter & gap of not les than 48 hours of the meeting fet convened and adjoumed. 16. Gi)" [1fn0 quorum is present in the adjourned meeting, OL oF members present shall constitute the quorum and the matters decided. ~ | Order of Business ‘The order of Business of any general meeting, annual or ‘special, may be decided by the Board of Managers or the members as deemed appropriate. . | Special Resolution ‘Any matter required to be resolved through a Special Resolution may be decided | Gt any gencral'meeting, annual or special, which is attended by at ieast 4096 at the total members and the proposal is approved by 3/5" of the members present |" and voting.CHAPTER I Office-hearers ofthe Association election and their duties 18. | Office-bearers of the Association, tenure and their Election President, a Secretary, a Joint Secretary and a Treasurer, peomes due, by the Association of Owners at iis Anmal Conds Gi) | The term Of office of the dffice-bearers of the Association shall be three years. ei otice-beaers ofthe association sll be elected. ab and Whee T 3 19. Resignation, Suspension and Removal of Office-bearers ‘An office-bearer of the Association ‘May; Of his own volition, resign from @ such position at any time. Frovided that the Board of Managers may, if considered Unavoidable, require such office-bearer to continue to discharge his Th case.a majority of the ‘of Managers expresses their lack of - Sonfidence in any: office bearer, for whatsoever reason, thoy shall te competent to suspead such office-beaiers from office till such time the ‘matter is considered at the general mesting of the Association for-his removal and so resolved. : Provided that the Board of Mangers shall convene’ a meeting of | ee the Association of Ovmers'as soon as possible, but not later then 45 days of such decision, to consider the removal of auch office-bewrer ae suecessor Of any office-beater removed ftom the office hall Go elected at the sime sting of the Association, @ 20, | President of the Association ‘he President shall be the Chief Executive Officer of the Assoolalion aad fall preside over all meetings of the Association and of the Boodd at @ 21, | Vice President The Vice President shall perform Such functions as are assigned fo him ‘by the Board of Members from time to time, - : : Officiate, as “the President and preside over the meetings OF the Association and the Board of Managers during any temporary absence of the President. 22. | Secretary ane © [He shall be the overall in-charge of the seorelarial Fhaclons oF The . Association and the Board of Mansgers; i) [He shall issue notices for the meetings of the Assoolation, the Board oF at , weuticor’responsibilities, 24. | Treasurer aE = © [He shall be responsible for management of the finances and accounts of the Associati i ** | [GT He shalt be responsible for the deposit ofall ‘moneys end other valuable 3 . gives in the mame and to the credit of the Association such Cepositories, as may- from time to time be ided by the Board of Managers. - ‘CHAPTER IV i |.___ Constitution of the Board of Managers, its functions and powers 29. | Board of Managers and its mandate é @” [The “affais of the Association shall bo managed by a ‘Board off Managers’, comprising of five office-bearers, who shall Le elected by the : ember: of the Association for aterm of three years, and may be ’ E Teferred to as the ‘Board’ hereinafter, - . (i) | The office-bearers Of the Board-of Managers shall be the office bearers ~ of the Association also, Gi)“ [The Board of Managers shall act as the tusiees oF the members of the (Pos, Gv) | | The Board of Managers shall discharge its fanctions and duties following the principles of collective. responsibility and the designations of any office-icarers aro not meant to create ani hierarchy; () "| The Board of Managers may appoint such ‘sub-committees of members ‘fom time to time, a5 may be considered necessary, with such tones may deem appropriate in exercise of powers and discharge of cuties for the administration of the affairs ofthe Association. - (vi) "| The Board may.co-opt ot appoint such persons as members of any such “+ [subcommittee wo possess special knowledge of any area to provide any ‘expert assistance to any such coramittee. (Vil) | Any sub-committee appointed by the.Board, with or without any expert (viii) | The Board shail be responsible for preparation of the Annual Accounts and shall present an Annual. Report of its activities before the Association ee aay oor’in its Annual General Meeting. 2 5 26. | Duties, functions and powers of the Board The Board shall, in uddition to the duties and responsibilities assigned under these bye-laws ‘or by resolution of the Association, be tesponsible for the following, among other things /° The care, upkeep and surveillance of the complex of the ABW Tower and the restricted common areas and facilities; 2 ~ Gi) [Determination and collection of the monthly maintenance charges from ting an maintenance c the unit owners, while a Gi)” [Ensure that the money is depostied city bills; Gv) Levy and collection “of user charges for tise ©)” | Designation, employment, ‘payment of Association/Society, its common areas and fuélities aad te restricted | common areas and ficilities, . (| Provide for the manner in which the acsounis oF tas ‘Association shall be ‘maintained and its audit shall be carried out, 5) {pipet and examine the records and sooouals Kept by oF Wider Ke are maintained in the manner as prescribed, (ill) [Take steps for timely payment ofall obligation and the recovery of all sums due to the Asa : G29), [Approve or sanotion working expenses, malniouangs of cash balance and eal with other miscellaneous business: : . a ) [Ensure thatthe cash book is written prompily aad signed daily by one ) ofthe members of the Board authorized in this behalf (xi) _| Appropriately deal with thé complaints concerning the above; ii) aegoam all oes fuetions as may be decided, fom time to ine, by He 27. | Restrictions for an office-bearer or member from receiving any benefits No offfice-bearer or member of the Association or the Board of Managers shall be appointed to any salaried office of the Society, and shall ‘ot be paid any fees | fy Zemuneration for the services rendered by him apub'corY[28.[Wacancies In ie Board of Mana or 4 dan, vacancy in the Board, caused by any Teason tbr than We Teaoval ofan office bearer, may be filled-up by the remaining office-bearers of the Board by . as an int measure, which -shall’ be placed before the Association in its next ‘general meeting for ratification or election of such office- bearer, 2. | Engagement of Agencies; Sawise Provider, offi ‘Estate Manager and other (@ |The Board may engage one of more denice providing agencies for Performance of such functions or delivery of auch svi ic || @D__| The Board may engage of exploy individuals, on fulltime or parttime "| basis in’ the employment of the Association for a remuneration or |’ compensation as determined by the Board, and performance of such [tise and services as may be decided by the Board. @ The Board may require ell or any of the employees of the Association to __| fumnistia fidelity bond. a ‘Meetings of the Board of Managers — Notices, Agends; Quorum and Proceedings 30. | Meetings of the Board of Managers || subject to the condition that it shall meet 31. | Notice for the Meetings of the Board of Man: + @ F af arimt meeting ofthe newly elected Board sll be held wilin 30 Gaye =| of such election at such place as shall be fixed by the Board, : Gi) |The Board of. Managers may hold its meeting as and when. required hold a minimum of four meetings in ¢ finanéial a 7 ZOO meeting ofthe Board shall entail « notice of at leas Une Gay, circulated in electronic or physical mode, as the case may be, along with the tentative ‘genda of the business to be transacted at such meeting. Provided that the notice period may be waived in emergent circumstances at Iéast once every.quatter and ers 32. | Quorum “| ita majority ofthe office bearers apree to hold the meoting at a shorter notice, Inceting. ‘At least 33% of the members of the Board shall constitute the quorum for any 33.] Proceedings of Mectings ident, @ | Proceedings Of each and every meeting of the Board of Managers shall be revorded by tc Secretary and signed by the Secretary and the G "| The proceedings of mectings, signed by the Searcy and the President, shall be maintsined in the form of a register of, ings; electronic mode and hard copies thereof, authorities, as required. Gi) [The proceedings may be circulated amongst the Board ieabars by shall be endorsed to concerned Ll CHAPTER VI reuboorY |me Funds, Accounts and Audit : 34. [Funds "The Association may raise Bune Guough all or cay of the following sources, namely :~ © | Transfers fom the savings avallatie la i Capital ‘Account of the ABW | Tower Condominium Association/Society. if Gi) | Membership fee and by issue af shame: Contribitions, assessments, user charges dad donations ffom the units owners; Gi) [Revenue Surpluses which may form the nucleus of the Reserve Fund, (¥) [Revenue arising from Aadvertisoments/signage/parking etc. Loans, if (wi) may fe cibiect to such terms and condilions” al the pers } Association. may determine. with .the “Approval--of ‘the--Competent --|____| Authority in this behalf. . : E 35. | Investments ~ The Association may invest or deposit its funds in one or] Lt s more of the following :- PR | [@ [is a Co-operative Bank ora Scheduled Bank or a Fost Office Savings pu Account, or S Gi) 1Daae ee Sots speed Ta Solon 2 of Ws ln Tost AE 1982;.or 82; Tn any other tanner as resolved by Wie Associaton: ent of funds _ || Memorandum of Association end no portion theres arn be paid or transferred, rectly or indirectly, to the members of the Associate, 37. | Maintenance of Accounts - - [The Association may open of allow to open separate bank accounts for freon egg uposes and maintain proper accounts of credits tenet debits ‘from each such account. yo % @ 2 ee, HORNE Bay Tip a an Tot Geng feasible through bank insiruments. Gi)” All payments exceeding Rs, 10,0007 in vo Ewe possible, shall be made by cheque signed by the President or the Treasures of te. Association. () "| Cheques for say payment exceeding Re 30 0006 shall be signed jointly juret. () [The Board of Managers shall maintain @ »pass-book in respect of every members on demand during the Annial General Mee’ : Association or at aly stage, for which the Association may or may not ae aaubcor’(A determine a ee. 38. Annual Accounts @ |The Board of Managers shall prepare annual aocounls oF ‘Association Fotece ac gfe financial year, as soon as possible, but in any case on before the 30" June of the following year. Gi) ate at auzauns stall contain (a) The Wesipts and Spence 39. Auditof Accounts. @ The’ Annual Accounts shall be submitted for Audit by a Chartered Accountant engaged by the Board, such Chartered Accountant not being __| 8 member of the Association or a olose relative of of the members. GD | The Auditors shall audit the accounts of the Associa with or without any qualifications, and submit theié report thereon, Gi) [The audited financial statement shall be open to inspettion by any ‘ember of the Association during office hours and ini the office of a, Association and a copy thereof shall be placed before the Annual General Meeting for its approval and adoption not later than 31% of August of the ‘We) Every financial statement shall be accompanied by a ‘complete list of the unit owners, along with the. amount receivable fom or Payable to the memibers, () [A copy of the Annual Audited Accounts shall b Hedin tae office of the District Registrar in:the form and manner prescribed under the relevant law, . 40, Appointment of Auditor and related mations @ Zi Association’ shal! appoint a registered Chartered Agcoualant OF 3} * 1G ake ord of Management shall extend fll sistance to the Audion aad Gd |The Auditor shall conduct the audit ofthe accounts ofthe ASsOSISHa ia sccordance with the accepted Accounting Standards, along with oc Without any qualifications or advisory to the Association for the proper | upkeep of accounts; : @- Jee iuditor shall be entitled to call for and examine aay pape oF documents belonging to the Association covering the complete seore of activities of the Association, CHAPTER VIL Mortgages 41, Notice about Mortgage and related information @Q__[A member, who morigages his or her unit in Favour oF any financial OO wut cory3 ‘institution, shall notify the Association ‘through its Secretary, the name and address of his or her mortgages, and the Association shall maintain ‘ such information in a book entitled “Mortgagees of Units.* @) |The member shall also notify: Association about the status of Anortgage of the unit, and its-vacat ii) [The Association tay, at the request of the Mortgagee.of «unit, Teport -SnY unpaid assessments or charges due from the owner of such wit, R VO Determination ‘of contributions from Members for Common Mafitenance of facilities, user charges and utility payments, . | Members to contribute for Various charges JO: [Pie Association. shall dotermine the rates oF vacious charges to be} @) "| Chatges for the maintenance of common acas act fucilities eg, scourily, cleaning, garbage disposel, horticulture, electrical oo plumbing services, AMCs of various facilities eg, lifts, Gen-set |) [Charges tor use of common fhellites ©g, Gyn Tandoor games, Jounge, terrace with lounge, common kitchen area, lawns ee ©) [Utility charges ic. ciecticty bills of individuel units Gf. the Power is being supplied te the Association Complex from a He Connection), water ete.s © | Contribution to the Reserve Fund tor mesting major Topaits and Fenovation works required for the common areas of the cotiplen: | ©, | Costs towards payment of insurance premitia te cover the risk ” | against various eventualities e.g, fire, earthquakes, calamity, strike ._| by any terrorist action ete, : ® [Any taxes or fees “or- cess payable Wy the local Municipal Corporation, Any other charges not specifically covered under the above. () [AU expenditure incurred on the maintenance of the common facilities and services of the ABW Tower complex shall be recoverable fen eos payable by the members on 2 pforated basis ie. divided or multiplied by a factor of, (ao: of members) in @ uniform manner. CHAPTER TX . ~__ Obligations of the Unit Owners cnn 43. | Obligation to timely pa; ent of all charges and contributions Association for the said specific purpose to the Maintenance Agency or any grist agency appointed by it Som time to time and the utility bile in respect of | clesticity and water consumption without being in arrears, 44. | Observance of duties and responsibilities . ‘The unit owiters shall be obliged to observe thelr duties and bbligations as set out Herein and eny violation ofthe same shall mak them lisble five meine for TRUE COPYTorfeitue of their rights as may be detennined by the Associaton at Ta mx ty or by any special committee appointed by them in this regard, 45. Enforcement of obligations Jn case any member is in arrears of payment of his obligations for @ period of ‘Two months (Calendar) or more, the Maintenance Agency shall be competent to take all measures for the recovery of such arrears of the monthly maintenance charges, or monthly utility bills (electricity and related charges) and other user charges, including coercive measures by taking recourse to disconnection of electricity and water supply'to the unit, blocking its sewage outflow, and denial of access to the use of common facilities including the lifts. Maintenance and repairs of individual units |G) [All repair, renovation and replacement of internal installations-within the | —-- -area of the individual unit e.g. water, light, power, sewage, telephones, air-conditioners, sanitary installations, doors, windows, lamps and all other accessories belonging to the unit area.shall be carried gut by thé unit owner at this own expense; @ ~ [Every unit owner shall promptly undertake the maintenance and repair work in respect of any installation'within his own unit, which if not attended promptly, may have an adverse effect on the units of other inembers or the common areas of the ABW Tower comsplox. (Gi) | Should there be caused any damage or injury to the common arcas oF facilities in the process of intemal works in any unit, the -owner shall either get the’ same restored to its condition at his own expense or be jliable to pay and reimburse the expenditure incurred by the -Association on getting such i “|v | The unit owner ‘A’ shall either reimburse and compensate the owner of another unit ‘B’ for any damage or injury cauied to his (B's) unit in the | process of repairs, caztied out in hii (As) unit or get the same repaifed.at hhis cost to the satisfaction of the affected ownet. : | No unit owner shall make any structural modifications of alteration in his/her unit or installations located within the unit without previously notifying the Association in writing, through the Secretary of the Board, and securing prior permission of the Board for such modifications arid alterations.” ; Provided that the elevation and engineering structure of the building will not be changed under any circumstances. Provided further that any change affecting any other unit will not be permitted. (vi) |The Board shall respond to any request (received under sub vlause (Hi) above at the carliest but not exceeding thirty days, In case no response-is received to the contrary within 30 days, it shall be deemed that there is no objection to the proposed modification, alteration or installations, (4% ‘Use of independent units and liability for violation @ [All the units/units shall be used for purposes only as permissible under the regulations of the competent Autiority from time to time. Gi) | Any financial or other liability arising out of violation of the usage | spubicor™Y