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There is no express provision in RERA Act, 2016 by which the promoter is entitled to deduct amount on account of cancellation of booking by allottee or promoter – Rajeshwari Ramesh Pillai and Anr. Vs. Aishwarya Avant Builders LLP – Maharashtra REAT

Hon’ble Maharashtra REAT held that:

(i) Section 13(1) of RERA Act 2016 relates to no deposit or advance to be taken by promoter without first entering into agreement for sale.
(ii) There should be some reasonable logic while forfeiting the amount deposited by the allottees. There is nothing on record to show that because of cancellation of booking by allottees promoter has suffered damages or loss. This signifies that the conduct of the promoter to forfeit the entire amount without any justifiable reason is contrary to the object of RERA Act 2016.

There is no express provision in RERA Act, 2016 by which the promoter is entitled to deduct amount on account of cancellation of booking by allottee or promoter – Rajeshwari Ramesh Pillai and Anr. Vs. Aishwarya Avant Builders LLP – Maharashtra REAT Read Post »

Whether any instrument which is convertible into shares with Put Option is regarded as Financial Debt under IBC?, Obligations of Sponsor Company in a Debenture Subscription Agreement, Jurisdiction under Section 62 of Code – IFCI Ltd. Vs. Sutanu Sinha & Ors. – Supreme Court

In this case, Appellant had agreed to subscribe to the CCDs at the request of ICTL(Corporate Debtor). In terms of the agreement, there was a “put option” and thus, in the event of default on part of ICTL(Corporate Debtor) during the window period, these CCDs could be sold to a third party but the principal obligation of IVRCL continued to be in place. It also provides for automatic conversion into equity shares of ICTL on the relevant date.
Hon’ble Supreme Court held that:
(i) The debenture subscription agreement clearly defines ICTL(Corporate Debtor) as the special purpose vehicle while IVRCL is the sponsor company and IFCI is the lender. The appellant was provided security under the Debentures Subscription Agreement but the obligations are of the sponsor company.
(ii) A contract means as it reads. It is not advisable for a Court to supplement it or add to it.
(iii) Our jurisdiction comes from Section 62 of the Code. The jurisdiction is restricted to a question of law akin to a second appeal. The law does not envisage unlimited tiers of scrutiny and every tier of scrutiny has its own parameters.

Whether any instrument which is convertible into shares with Put Option is regarded as Financial Debt under IBC?, Obligations of Sponsor Company in a Debenture Subscription Agreement, Jurisdiction under Section 62 of Code – IFCI Ltd. Vs. Sutanu Sinha & Ors. – Supreme Court Read Post »

Interest component in MoU will take effect only in the event of delay in payment, in such case it cannot be considered as the time value of money – Step Stone Infras Pvt. Ltd. Vs. Yes and Yes Infracon (P) Ltd. – NCLT Chennai Bench

The Adjudicating Authority observed that for entertaining an application under Section 7 of IBC, 2016 the debt should also be qualified as a financial debt as per Section 5(8) of IBC, 2016. To qualify as financial debt, the debt should be disbursed against consideration for the time value of money. In the instant case, there is neither disbursement of debt nor the time value of money for the debt. 14% interest component in the MoU will take effect only in the event of delay in payment, in such case it cannot be considered as the time value of money.

Interest component in MoU will take effect only in the event of delay in payment, in such case it cannot be considered as the time value of money – Step Stone Infras Pvt. Ltd. Vs. Yes and Yes Infracon (P) Ltd. – NCLT Chennai Bench Read Post »

The amended provision of the CPC as per Section 16 of the Commercial Courts Act, 2015 mandates that the defendant(s) has to file the written statement within 120 days from the date of service of summons, failing which the defendant(s) right to file the written statement will stand forfeited and the Court shall not accept the written statement on record – Anil.M.P Vs. Capital Finserv Ltd. – Kerala High Court

By Section 16 of the Commercial Courts Act, 2015 (Act), the Code of Civil Procedure stands amended in its application to commercial disputes as specified in the Schedule to the Act. Consequently, Orders V and VIII of the Code of Civil Procedure stand amended by the Schedule. The amended provision of the Code of Civil Procedure as per Section 16 of the Commercial Courts Act mandates that the defendant(s) has to file the written statement within 120 days from the date of service of summons, failing which the defendant(s) right to file the written statement will stand forfeited and the Court shall not accept the written statement on record. In SCG Contracts India Pvt. Ltd v. K.S Chamankar Infrastructure Pvt. Ltd & Ors (2019) ibclaw.in 147 SC, the Hon’ble Supreme Court has held that the amended provisions of Orders V and VIII of the Code are mandatory. In Raj Process Equipments and Systems Pvt Ltd & Ors v. Honest Derivatives Pvt Ltd. (2022) ibclaw.in 171 SC the Hon’ble Supreme Court has held that if the suit is filed before the Civil Court and then transferred to the Commercial Court, then the amended provisions of Orders V and VIII of the Code are directory.

The amended provision of the CPC as per Section 16 of the Commercial Courts Act, 2015 mandates that the defendant(s) has to file the written statement within 120 days from the date of service of summons, failing which the defendant(s) right to file the written statement will stand forfeited and the Court shall not accept the written statement on record – Anil.M.P Vs. Capital Finserv Ltd. – Kerala High Court Read Post »

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