M/s Colliers International (India) Property Services Pvt, Ltd vs M/s Logix City Developers Private Limited

Narender Kumar Bhola, Member (Technical)

Under consideration is IB-833/ND/2020 filed under Section  9 of the Insolvency 86 Bankruptcy Code,  2016 (hereinafter referred as  'IBC,  2016')  R/w Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules,  2016.  The  Operational  Creditors,  Colliers  International  (India)  Property Services Private Limited seeking an Order to initiate Corporate Insolvency Resolution Process (hereinafter referred as `CIRP')  of the Corporate Debtor viz., M/s  Logix  City  Developers  Private  Limited, declare  moratorium  and  appoint Interim Resolution Professional (hereinafter referred as `IRP').

The Operational Creditor/Petitioner has averred as follows: -

a.  It is  the  case  of the  Operational Creditor that on  05.07.2011,  the parties entered into an agreement for providing construction/project management consultancy services  for Bloom Zest Project at Noida ('Project') and appointed the operational creditor as its project manager. The said Agreement was extended and amended in respect of the  duration of completing the  Project,  deploying personnel and fees of  the Project manager.  The Operational Creditor  for  the services provided by it under the Agreement raised various invoices from time to time. The said invoices were delivered and accepted by the Corporate Debtor without raising any dispute in respect of the services provided by the Operational Creditor. Against some of the invoices raised, the Corporate Debtor being unable to pay its obligations  allotted  a residential  unit  bearing  no.  L-001,  Tower  L, Blossom Greens, Sector 142, Noida to the Operational Creditor.

b.  It is  submitted  that the  Operational  Creditor vide  its  Email dated 04.03.2020 requested the Corporate Debtor to pay the Operational Debt. However, the Corporate Debtor failed and neglected to pay the said Operational Debt. In light of the failure of payment, the Operational Creditor issued a Demand Notice in Form 3 on 10.04.2020 demanding repayment  of  Rs. 1,08,12,591 in unpaid invoices along with interest. The Form 3 notice was followed up by the Operational Creditor vide its Email dated  10.04.2020 requested the  Corporate  Debtor  to  confirm  the  outstanding  amount  of  Rs. 1,08,12,591/- (Rupees One Crore Eight Lakh Twelve Thousand Five Hundred and Ninety One only) payable to it. In response to the email dated 10.04.2020, the Corporate Debtor vide its Email dated 11.04.2020 has acknowledged and  confirmed that the  Operational Debt is due and payable to the Operational Creditor. Also the Corporate  Debtor  in  its  Reply  to  Form  3  notice  vide  Email  dated 22.04.2020 has admitted and acknowledged its liability to pay the said  Operational Debt.  Furthermore,  the  corporate  debtor has  not raised any dispute in respect of the amount, invoices raised and the services provided by the Operational Creditor. Therefore, the present petition.

The Corporate Debtor has also filed reply to the captioned petition and submitted  that  the  amounts  as  claimed  by  the  Operational  Creditor under Demand Notice dated 10.04.2020 were duly acknowledged by the Corporate  Debtor vide email dated  11.04.2020  and 23.04.2020  solely due  to  the  reason  that the  Corporate  Debtor was  confident that the above  mentioned project  shall  be  finished  on  time  and  the  proceeds from the sales of the said project would then be utilized towards the payment of the claim amounts to the Operational Creditor.  However, the Corporate Debtor, only after realizing all the prevalent real estate conditions  caused  due  to  COVID-19  pandemic,  failed  in  paying  the amounts  as  claimed  by the  Operational  Creditor under the  Demand Notice.  It is stated that the delay in payment of installment amounts was caused due to the fact that the construction of the said project was stopped due to the various EPCAJ NGT Orders in the month of October 2019 and thereafter unprecedented conditions created due to COVID-19 pandemic. Further, it is undisputable fact that the Real Estate business is going through slump whereby all the builders and promoters of the real estate projects are experiencing heavy economic losses.

We  have  perused  the  Pleadings  and  arguments  advanced  by  both  the parties. It  is  clear  from  the pleadings  that  the  corporate  debtor  has admitted its liability towards the operational creditor in Demand notice as well  as  in  reply.  However, it  failed  to  discharge  its  liability  as  the admitted amount remains unpaid as on date.  It is worthwhile to mention here  that  this  authority  has  to  only  satisfy  itself regarding  default  in payment by the  corporate  debtor  towards  the  operational creditor and there is no pre-existing dispute, the moment above conditions are fulfilled, this Adjudicating Authority has to admit the section 9 petition and in the present petition both the conditions are fulfilled as discussed above. Therefore, the Petition deserves to be admitted. Hence, this authority  is  inclined  to  initiate  the  CIR  Process  of  Corporate  Debtor. Accordingly, the captioned petition is admitted.

The Applicant has also proposed the Insolvency Resolution Professional.  This Tribunal, hereby, appoints Insolvency Professional namely, Mr. Yogesh Kumar Gupta having Registration Number IBBI/IPA-003/IP-N00078 / 2017-18/ 10701 (Email  ID -ykgupta@yahoo. co . in)  as  Interim Resolution Professional as proposed by the Operational Creditor. The IRP is  directed  to  take  charge  of the  respondent  corporate  debtor's management  immediately.  He  is  also  directed  to  cause  public announcement as prescribed under section  15 of the IBC,  2016, within three days from the date of this order received, and call for submissions of claim in the manner as prescribed.

The moratorium is declared which shall have effect from this Order till  the completion of CIRP, for the purposes referred to in section 14 of the IBC, 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  respondent  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  respondent  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 respondent in respect of its property including any action under the Securitization 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 respondent.

The supply of essential goods or services of the Corporate Debtor shall not be terminated, suspended or interrupted during moratorium period. The provisions of sub-section (1) of section 14 of IBC, 2016 shall not apply to such transactions, as notified by the central government.

The IRP shall comply with the provisions of sections 13(2),  15,  17 and 18  of the Code. The directors of the Corporate Debtor, its Promoters or any person  associated  with  the  management  of the  corporate  debtor  shall extend  all  assistance  and  cooperation  to  the  IRP  as  stipulated  under section 19  for  discharging  his  functions  under  section  20  of the  IBC, 2016.

The operational Creditor is directed to send the copy of this Order to the  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 provisions of IBC, 2016.

The  Registry  is  directed  to  serve  a  copy  of this  order  on  Registrar  of  Companies,  Delhi  86  Haryana  for  appropriately  updating  the  status  of Corporate  Debtor  on  Mb o  Corporate  Affairs  website  for  information  of general public. The RoC as aforesaid shall then file a compliance report in this regard with this Adjudicating Authority.

The order is pronounced by this Adjudicating Authority in virtual Hearing.