Advances given by Property buyers to real estate developer will be considered as ‘borrowing’: NCLT
The Chennai NCLT classified advances from property buyers to a real estate developer as ‘borrowing.’ The appellant, a suspended director, emphasized involvement in developing layouts. Three Sale Agreements with respondents for 10 plots involved a Rs. 1,36,00,000/- advance (26/08/2016 to 09/03/2017). HMDA approval on 27/03/2017 led to mortgaging Plot Nos. 24 to 29 by HMDA, contested by the appellant. The 1st respondent, not purchasing the plot, is entitled to Rs. 35,97,500/-, argued the appellant.
Contesting interest calculation, the appellant emphasized that sale agreements didn’t stipulate interest. A specific performance suit by the 1st respondent was dismissed; CMA 296/2021 admission acknowledged Rs. 35,97,500/- due. The tribunal concluded property buyer advances to a developer are ‘borrowing’ under Code Section 5(8)(f)
