| |
The appellants claimed that they had paid the entire consideration of Rs. 1.35 crore for four flats under an unregistered agreement for sale dated 24.11.2015 and had received symbolic possession. They later invoked arbitration for a refund, and initiated proceedings under section 138 of the NI Act, after a cheque issued by the CD was dishonoured. The AA declined to classify them as financial creditors. The NCLAT held that they cannot sail on two boats by pressing a refund claim while contending that they remain allottees. In its view, having invoked Clause 10 of the agreement to claim a refund, they had, by their own conduct, fallen outside section 5(7), even on a reading of the Explanation to section 5(8)(f). The NCLAT further held that a debt under section 3(11) must be a continuing liability and that the CD’s liability had ceased once the appellants accepted and presented its refund cheque. It also held that the execution of the agreement for sale may not, in itself, lend the agreement legal sanctity. The appellants relied on the Vishal Chelani case, where the Supreme Court held that allottees holding RERA refund orders remain financial creditors and cannot be treated differently from other allottees. The NCLAT held that the decision did not apply, as the appellants’ claim rested on no such order and, on their own case, they were not allottees. The appeals were dismissed. |
