Allotment of built-up area against the consent decree & settlement terms is not Financial Debt under Sec. 5(8)(f) since no sum has been raised from an allottee under the Real Estate Project – Arenja Enterprises Private Limited Vs. Edward Keventer (Successors) Private Limited – NCLAT New Delhi
NCLAT held that the ‘debt’ as alleged by the Financial Creditor is not a ‘financial debt’ as defined under sub Clause (8) of Section 5 I&B Code, 2016, because no sum has been raised from an allottee under the Real Estate Project. The Financial Creditor and its associates have not paid any money towards the allotment of built-up area. Given the terms of settlement Financial Creditor and its associates entitled to 34000 sq. ft. In other words, nothing is paid in terms of money to the Financial Creditor and its associates in the light of the ‘consent decree and settlement terms’. The Corporate Debtor has not raised any money from the Financial Creditor in terms of the explanation provided to sub-clause (8) of Section 5 of I&B Code, 2016. Thus, it is clear that the alleged debt is not a ‘financial debt’ in terms of Sec 5(8)of the Code.
