1. Under Adjudication is CP/340/(IB)/CB/2018 that has been filed by the Operational Creditor under Section 9 of the Insolvency & Bankruptcy Code, 2016 (in short, 'I&B Code, 2016') r/w Rule 6 of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016. The prayer made is to admit the Application, to initiate the Corporate Insolvency Resolution Process against the Corporate Debtor, declare moratorium and appoint Interim Resolution Professional (IRP) under the Insolvency and Bankruptcy Code, 2016 (I&B Code).

2. Heard the Learned Sr. Counsel for the Operational Creditor and the Counsel for the Corporate Debtor and perused the record.

3. The Operational Creditor has claimed an outstanding debt totalling Rs.28,40,21,459/-, being a sum of Rs.27,69,21,200/- payable as principal amount and Rs.71,00,259/- being the interest amount payable on 16.01.2018. The detail of which has been given in Form-5.

The brief facts of the case are that a Joint Development Agreement (hereinafter referred to as 'JDA') dated, 09.11.2015 was entered into between the owners of the land including the Corporate Debtor viz. M/s. Sameeraa Foundations Private Limited and the Operational Creditor viz., M/s. BBCL Properties Private Limited. As per the JDA, the land parcels admeasuring to an extent of 52.55 acres situated at Vengambakkam Village, Tambaram Taluk, Kancheepuram District morefully described in Annexure-I of the JDA referred to as the "Schedule Property" was given to the Operational Creditor for development and the parties have agreed that the representations specified in Recitals A and B form the fundamental criteria on the basis of which the parties have agreed to proceed with the Joint Development of the Schedule property. The following are the main conditions of the JDA: —

"3.1.4 The Owners shall reimburse the Cost of Development for the plots morefully described in ANNEXURE IV 'A' and ANNEXURE IV 'B' at the rate of Rs.150 sqft amounting to Rs.13,09,64,100/- (Rupees Thirteen Crores Nine Lakhs Sixty Four Thousand One Hundred only) to the Developer, for the total area of 8,73,094 sqft to be retained by them, in the follower manner:

a. Rs.6,54,82,050/- will be paid to the developer by the land owners upon full receipt of sale consideration value of 3,20,676 sqft from and out of sale of plots specified under Annexure III; and

b. Balance amount of Rs.6,54,82,050/- will be paid to the developer by the land owners upon full receipt of sale consideration value of balance 3,20,677 sqft from and out of sale of plots specified under Annexure III or at the end of this JDA term whichever is earlier. Taxes like VAT, Service Tax, etc., shall be charged extra at actuals.

c. In case the development of Layout is not carried out by the developer as per the Terms and Specifications agreed in this JDA and morefully mentioned in "ANNEXURE VI" on or before 31st March 2017, the Owners are entitled to reduce the reimbursement development cost proportionately to the extent works carried out by the Developer.'

4. In the light of the above conditions the Developer (Operational Creditor) has made an advance payment of a sum of Rs.6,41,00,000/- as per clause 3.1.11 of the JDA which was to be adjusted for the amounts payable to the owners. The relevant clause is reproduced as under:—

"3.1.12 The payment made as per Clause 3.1.11, the sum of Rs. 6,41,00,000/- (Rupees Six Crores Forty One Lakhs only) shall be adjusted on amounts payable to the Owners in the following manner-

(a) Rs. 1,60,25,000/- will be paid to developer upon full receipt of sale consideration value equivalent to 1,60,338 sqft out of the Annexure III area:

(b) Rs.1,60,25,000/- will be paid to developer upon full receipt of sale consideration value to 3,20,676 sqft out of the Annexure III area;

(a) Rs.1,60,25,000/- will be paid to developer upon full receipt of sale consideration value equivalent to 4,81,014 sqft out of the Annexure III area;

(b) Rs. 1,60,25,000/- will be paid to developer upon full receipt of sale consideration value equivalent to 6,41,353 sqft out of the Annexure III area;

or at the end of the JDA Term whichever is earlier."

5. It is interesting to note that the parties to the JDA did agree that in the event of either of the parties hereto committing any breach of the terms contained in the JDA, the other party shall be entitled to have this JDA specifically performed through mode of Arbitration and the party committing the breach shall be liable for losses and damages which the other party may suffer on this accounts.

6. Initially, the term of the JDA was to expire on 31.03.2017. However, the parties have entered into a Supplementary Agreement for extension of the period of JDA, vide Letter of Extension dated 06.02.2017, the copy of which is placed at pages 90 to 92 of the typed set filed with the Application, the parties have mutually decided that the time limit for sale shall be upto 31.12.2017. It has been recorded in the Letter of Extension dated 06.02.2017 that in the event if the Developer is not able to complete the transaction within the time limit of 31.12.2017, then the said Joint Development Agreement dated 09.11.2015 and Supplementary Agreement dated 06.02.2017 and other writings related to the project shall stand cancelled and the owner will have all rights to deal with the said project without reference to the Developer and further on such termination the Developer shall not claim any right or interest in the project in any manner. This condition has to be read along with clause 8.2 of the Agreement dated 09.11.2015 which reproduced below:-

"8.2 In the event of either of the parties hereto committing any breach of the terms contained in this Agreement, the other party shall be entitled to have this Agreement specifically performed in the manner hereinafter provided through mode of Arbitration and the party committing the breach shall be liable for losses and damages which the other party may suffer on this account.

The Parties hereto agree that this Agreement and the Power of Attorney, to be executed in terms of this Agreement shall be in full force until 31st March, 2017 in case the development and/or sale of plots as detailed in Annexure III are pending as on 31st March 2017, all pending plots on that day of 31st March 2017 shall be the property of the land owners and the land owners shall pay the development cost as agreed above in Clause 3.1.4 to the Developer for such plots. Any Amount owed by the Owners to the Developers that remains unpaid at close of 31st March, 2017 shall be paid within 15 days, without requiring any notice. Any Amount outstanding beyond the said 15 days shall be entitled to a compound Interest of 18% per annum."

7. It has been submitted by the Learned Sr. Counsel for the Operational Creditor that as per the terms and conditions of the JDA dated 09.11.2015 and Letter of Extension dated 06.02.2017, the project has been completed by the Operational Creditor, but the Corporate Debtor has not made the due payments to the Operational Creditor. The Learned Sr. Counsel for the Operational Creditor has further submitted that assuming but not admitting that in case development of the layout is not carried out by the Developer (Operational Creditor) as per the Terms and Specifications agreed in the Joint Development Agreement and morefully specifically mentioned in the Annexure VI on or before 31.03.2017 that got extended till 31.12.2017, the owners are entitled to reduce the reimbursement development costs proportionately to the extent works carried out by the Developer (Operational Creditor). In any situation, the owners were required to make payments within 15 days without requiring any notice, and for any amount outstanding beyond the said 15 days, the Operational Creditor shall be entitled to compound interest at 18% p.a.

8. The Operational Creditor issued a Demand Notice dated 08.03.2017 under Section 8(1) of the I&B Code, 2016 to the Corporate Debtor, which provides the details of the outstanding debt claimed and the date on which the default occurred etc., the copy of which is placed at pages 198 to 203 of the typed set field with the Application, to which the Corporate Debtor has given reply on 21.03.2018, the copy of which is placed at pages 204 to 213 of the typed set filed with the Application. In the reply, the Corporate Debtor has referred to the terms and conditions of the Agreement/Letter of Extension and has recorded that the Operational Creditor has not completed the project in accordance with the Joint Development Agreement. However, it has been admitted that the Operational Creditor has completed only 10%, an insignificant portion of the work, and the claim of the Operational Creditor was not admitted.

9. It is interesting to note that under para 6 of the Reply to notice sent under Section 8(1) of the I&B Code, 2016 by the Operational Creditor, the Corporate Debtor has recorded that a group company of the Corporate Debtor has counter claimed against the Operational Creditor for a sum of Rs.43.50 Crores with respect to which the matter is sub-judice before Hon'ble High Court of Madras and the present proceedings is the offshoot of the same with an intention to wreak vengeance on the Corporate Debtor through a false and fictitious claim. But, the Corporate Debtor did not deny the execution of the Joint Development Agreement/ Letter of Extension and the terms and conditions contained therein. The Counsel for the Corporate Debtor has also referred to the Arbitration clause contained under para 19 of the Joint Development Agreement and has submitted that the Operational Creditor could have resorted to the option available under the JDA instead of filing the present Application under Section 9 of the I&B Code, 2016, as there requires a detailed enquiry in the matter in order to determine as to whether or not any amount is outstanding against the Corporate Debtor.

10. The Learned Sr. Counsel for the Operational Creditor has submitted that the Arbitration clause contained in the agreement is not a bar to invoke the provisions of Section 9 of I&B Code, 2016 against the Corporate Debtor. He has further submitted that soon after completion of the project by the Operational Creditor, the Corporate Debtor has issued advertisement in "The Hindu", Saturday, February, 10th, 2018 inviting the customers for sale of plots which the Operational Creditor has completed. The advertisements are placed at pages 149 to 151 of the typed set filed with the Application. Therefore, there appears force in the submissions of the Learned Senior Counsel for the Operational Creditor and hence, the defence projected by the Counsel for the Corporate Debtor stands rejected.

11. The Counsel for the Corporate Debtor has not been able to give answer to the query raised by this Authority during the course of arguments i.e., as per the terms of the JDA which expired on 31.12.2017, any payment / communication was made by the Corporate Debtor to the Operational Creditor within 15 days of the expiry of the duration of the JDA. However, the Counsel for the Corporate Debtor has been fair enough to admit that the Corporate Debtor has not taken any step after completion of the term of the JDA either to make payment or to make any communication till the receiving of the notice under Section 8(1) of the I&B Code, 2016 which has been sent by the Corporate Debtor on 08.03.2018. It appears that the Corporate Debtor has come up with a frivolous defence after receiving notice under Section 8(1) of the I&B Code, 2016 and has not made any payment/communication to the Operational Creditor as was envisaged as per the terms and conditions of the JDA more particularly, as per second para of Clause 8.2 of the JDA referred to hereinabove.

12. In the light of the facts and circumstances recorded above and the submissions made by the Learned Sr. Counsel for the Operational Creditor and the Counsel for the Corporate Debtor, it is safely concluded that the Corporate Debtor has defaulted in making payments to the Operational Creditor.

13. The Operational Creditor has complied with Section 9(3)(b) & (c) of the I&B Code, 2016, by filing Affidavit, which is placed at pages 12 to 15 of the typed set filed with the Application, wherein under para 4, it has been deposed that the stand taken by the Corporate Debtor in its reply dated 21.03.2018 is a mere afterthought and as such, none of the claims so made in the reply were ever made prior to the same. The said defence is being set up solely for the purpose of derailing the process of adjudication in the instant application. The Bank statements are placed at pages 152 to 197 of the typed set filed with the Application.

14. The Operational Creditor has fulfilled all the requirements of law for admission of the Application. This Authority is satisfied that the Corporate Debtor has committed default in making payment of the outstanding debt claimed by the Operational Creditor. Therefore, CP/340/(IB)/CB/2018 is admitted and the commencement of the Corporate Insolvency Resolution Process is ordered which ordinarily shall get completed within 180 days, reckoning from the day this order is passed.

15. The moratorium is declared which shall have effect from the date of this Order till the completion of Corporate Insolvency Resolution Process, for the purposes referred to in Section 14 of the I&B Code, 2016. It is ordered to prohibit all of the following, namely :—

(a) The institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority;

(b) Transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein;

(c) Any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002);

(d) The recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor.

16. The supply of essential goods or services of the Corporate Debtor shall not be terminated or suspended or interrupted during moratorium period. The provisions of Sub-section (1) of Section 14 shall not apply to such transactions, as notified by the Central Government.

17. The Operational Creditor has not proposed the name of IRP, therefore, Mr. Radhakrishnan Dharmarajan is appointed as IRP, whose name appears in the Panel of Insolvency Professionals recommended by the IBBI. There is no disciplinary proceedings pending against the IRP and his name is reflected in IBBI website. The IRP is directed to take charge of the Corporate Debtor's management immediately. The IRP is also directed to cause public announcement as prescribed under Section 15 of the I&B Code, 2016 within three days from the date the copy of this Order is received, and call for submissions of claim by the creditors in the manner as prescribed.

18. The IRP shall comply with the provisions of Sections 13 (2), 15, 17 & 18 of the Code. The Directors of the Corporate Debtor, its Promoters or any person associated with the management of the Corporate Debtor are /is directed to extend all assistance and cooperation to the IRP as stipulated under Section 19 for the purpose of discharging his functions under Section 20 of the I&B Code, 2016.

19. The Operational Creditor and the Registry are directed to send the copy of this Order to IRP with immediate effect, so that he could take charge of the Corporate Debtor's assets etc., and make compliance with this Order as per the provisions of I&B Code, 2016.

20. The Registry is directed to communicate this Order to the Operational Creditor and the Corporate Debtor. The e-mail and other details of the IRP are as follows: -

Mr. Radhakrishnan Dharmarajan

Reg. No: IBBI/IPA-001/IP-P00508/2017-18/10909

Email: dharma67@gmail.com

Mobile No. 9840062431

21. Order is pronounced in open court in the presence of the Counsels for the parties.