For informative and educative purposes only
A ‘decree-holder’ is undoubtedly covered by
the definition of
‘Creditor’
under Section 3(10) of the ‘I&B Code’ but would not fall within the class
of creditors classified as ‘Financial Creditor’ unless the debt was disbursed
against the consideration for time value of money or falls within any of the
clauses thereof as the definition of ‘financial debt’ is inclusive in
character. A ‘decree’ is defined under Section 2(2) of the Code of Civil
Procedure, 1908 (“CPC” for short) as the formal expression of an adjudication
which conclusively determines the rights of the parties with regard to the
matters in controversy in a lis. A ‘decree-holder’, defined under Section 2(3)
of the same Code means any person in whose favour a decree has been passed or
an order capable of execution has been made. Order XXI Rule 30 of the CPC lays
down the mode of execution of a money decree. According to this provision, a money
decree may be executed by the detention of judgment-debtor in civil prison, or
by the attachment or sale of his property, or by both.
Section
40 of the ‘Real Estate (Regulation and Development) Act, 2016’lays down the
mode of execution by providing that the RERA may order to recover the amount
due under the Recovery Certificate by the concerned Authority as an arrear of
land revenue. In the instant case, RERA has conducted the recovery proceedings
at the instance of Respondent Nos.1 & 2 against the Corporate Debtor which
culminated in issuance of Recovery Certificate and passing of order under
Section 40 of the ‘Real Estate (Regulation and Development) Act, 2016’
directing the concerned Authority to recover amount of Rs.73,35,686.43/- from the
Corporate Debtor as an arrear of land revenue. As already stated elsewhere in
this Judgment, Respondent Nos.1 & 2 instead of pursuing the matter before
the Competent Authority sought triggering of Corporate Insolvency Resolution
Process against the Corporate Debtor resulting in passing of the impugned order
of admission which has been assailed in the instant appeal. The answer to the
question whether a decree-holder would fall within the definition of ‘Financial
Creditor’ has to be an emphatic ‘No’ as the amount claimed under the decree is
an adjudicated amount and not a debt disbursed against the consideration for
the time value of money and does not fall within the ambit of any of the
clauses enumerated under Section 5(8) of the ‘I&B Code’.
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