Sharing the constructed area and allotment of flats and commercial units in lieu of entitlement to Landowners under the Development Agreement does not make the transaction of allotment a Financial Debt within the meaning of Section 5(8)(f) of IBC – Namdeo Ramchandra Patil Vs. Vishal Ghisulal Jain RP of Corporate Debtor – NCLAT New Delhi
The present is a case where on the land which was offered by the landowners the development was proposed to be undertaken by the Corporate Debtor. A Development Agreement was entered between the parties where area sharing was in the ratio of 45:55 percent. NCLAT held that it is clear that pre-condition for a debt being a Financial Debt is disbursement against the time value of money and when any amount is raised from an allotment under real estate such transaction is also covered under Section 5(8)(f). The pre-condition for application of Explanation (i) of Section 5(8)(f) is raising of an amount from allottee. The submission of the Appellant that they are allottees within the meaning of Section 2(d) of RERA Act does not make their transaction as a Financial Debt within the meaning of Section 5(8)(f).