Bank cannot initiate CIRP against Builder on default by Home Buyer being a Borrower – South Indian Bank Ltd. Vs. Magic Info Solutions Pvt. Ltd. – NCLT New Delhi Bench Court-III
NCLT New Delhi Bench Court-III held that the debt in question may be considered as a debt defined under Section 3(11) of the Code and cannot be called as a Financial Debt. Learned Counsel for the Corporate Debtor has relied on a judgment in the case of Anuj Jain Interim Resolution Professional for Jaypee Infratech Limited versus Axis Bank Limited [2020] ibclaw.in 06 SC wherein the Hon’ble Supreme Court of India distinguished a financial debt from other type of debts and has held that only institutions directly disbursing loan against consideration of time value of money is entitled and has the locus standi to prefer a petition for invoking the CIRP as such financial institution will invariably be interested in resurrection of such Corporate Debtor as against any other financial institution not having any financial debt, who shall only be interested in recovery of its dues. We have come to view that the principal creditors in the present case are Mr. Amit Tyagi and Mrs. Priyanka Tyagi (Home Buyer/Principal Borrower) to whom the Financial Debt is owned and not the Corporate Debtor, M/s. Magic Info Solution Pvt Ltd.