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Rajendra Kumar Saxena vs. Earth Gracia Builcon PVT LTD

The National Company Law Tribunal dismissed an application filed by Rajendra Kumar Saxena seeking insolvency proceedings against Earth Gracia Builcon Pvt. Ltd. Saxena had paid a partial amount for a flat from the company but cancelled the booking due to delay. The company claimed Saxena breached their contract by not paying the full amount. The Tribunal observed there was no consideration for time value of money in the transaction and it was a normal sale/purchase agreement, not a financial debt. Therefore, the application was rejected.

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166 views2 pages

Rajendra Kumar Saxena vs. Earth Gracia Builcon PVT LTD

The National Company Law Tribunal dismissed an application filed by Rajendra Kumar Saxena seeking insolvency proceedings against Earth Gracia Builcon Pvt. Ltd. Saxena had paid a partial amount for a flat from the company but cancelled the booking due to delay. The company claimed Saxena breached their contract by not paying the full amount. The Tribunal observed there was no consideration for time value of money in the transaction and it was a normal sale/purchase agreement, not a financial debt. Therefore, the application was rejected.

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sonu mehtha
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© © All Rights Reserved
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BEFORE HON’BLE NATIONAL COMPANY LAW TRIBUNAL

PRINCIPAL BENCH

ORDER NUMBER: (IB)-448(PB)/2017

ORDER DATED: 05.03.2018

IN THE MATTER OF:

RAJENDRA KUMAR SAXENA Applicant (FinancialCreditor)

v.

EARTH GRACIA BUILCON PVT. LTD. Respondent (Corporate Debtor)

(Filed under Section 7 of I&B Code, 2016)

BENCH:  Chief Justice (Retd.) M.M. Kumar (Hon’ble President), S.K. Mohapatra, Hon’ble
Member (Technical)

Rajendra Kumar SaxenaV.Earth GraciaBuilcon Pvt. Ltd.448/2017

https://nclt.gov.in/sites/default/files/Final-orders-pdf/Rajendra%20Kumar%20Saxena%20Vs.
%20Earth%20Gracia%20Builcon%20Pvt%20Ltd..pdf

Application rejected as there was no consideration for timevalue of money

The Applicant claimed the part-amount paid for the purchase of a flat from the Respondentwhile
the latter had already issued a legal noticefor breach of contractual obligation by the former. The
NCLT observed that there was no consideration for time value of money and thereby
dismissedthe Application.

MANDATORY TAGS MY TAGS WORDS AND PHRASES


Project
Home-Buyer
Reminders
Contractual Obligation
“Financial Debt”
Sale and Purchase
Assured Returns

CASES REFERRED: Nikhil Mehta & Sons v. AMR Infrastructure Ltd.

FACTS: The Application was filed by Rajendra Kumar Saxena(Financial Creditor) seeking for
the initiation of insolvency proceedings against Earth GraciaBuilcon Pvt. Ltd. (Corporate
Debtor)The Applicant contended that he was a prospective home-buyer in the Respondent’s
project and had advanced part amount for the same. Subsequently, due to inordinate delay, the
Applicant had cancelled his booking and demanded repayment. However, it was alleged that the
Respondent not only ignored the Applicant’s request for repayment but also sent reminders to
fulfill the rest of the Applicant’s contractual obligation by advancing the rest of the money.
Subsequently, the Respondent had issued legal notice to the Applicant for breach of contractual
obligation. The aggrieved Applicant had approached the NCLT under the ambit of a “Financial
Creditor”. The Respondent disputed that the Applicant had not advanced any “financial debt”
and that the relationship between the parties was purely sale and purchase of immoveable
property.

ORDER: The NCLT, on hearing arguments of both the parties, observed that the contractual
relationship between the parties was purely sale and purchase of immoveable property. It
reasoned this by observing that there was no agreement between the parties for
assured/guaranteed/committed/monthly returns. Thus, it was concluded that there was no
consideration for time value of money. The same was used to differentiate between the Hon’ble
NCLAT’s decision in Nikhil Mehta & Sons v. AMR Infrastructure Ltd.The NCLT further added
that there was already an existing allegation against the Applicant for breach of contract by not
paying the entire sale consideration despite repeated reminders and thus, the Applicant’s claim
was deemed to face resistance of contractual obligation. The Application was thus, dismissed.

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