Advance paid by a speculative buyer in Real Estate does not fall within the purview of Section 5(8) of the IBC – Naman Infradevelopers Pvt. Ltd. Vs. Metcalfe Properties Pvt. Ltd. – NCLAT New Delhi
In this case, in agreement for purchase of residential plots, it was one of the conditions in case the seller fails to execute the sale deed in favour of the purchaser, then the seller shall be liable to return the entire amount received alongwith interest @ 24% per annum from the date of payment of the amount till the actual payment. The Appellant had made advance payment. The Corporate Debtor failed to effect the Registry and proposed to convert the outstanding amount as loan.
On default in repayment, CIRP application filed by FC was rejected by AA.
Hon’ble NCLAT held that the judgement in Venkat Rao Marpina v. Vemuri Ravi Kumar and Anr. (2023) ibclaw.in 570 NCLAT as relied upon by the Appellant does not relate to the facts of the case as the Appellant was never an allottee or a home buyer but was a speculative buyer, hence would not fall within the purview of Section 5(8) of the Code.