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2018 (7) TMI 2175 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Tripartite agreement - Financial Creditors or not - existence of debt and dispute or not - HELD THAT - A perusal of various clauses of the Tripartite Agreement dated 29.11.2014 demonstrates that the applicant/ allottee assigned/ subrogated all its rights alleged to have been created in its favour by the Supplementary Agreement in favour of the HDFC Bank. There is no liability for the Corporate Debtor to pay the cancellation amount to the applicant. In the circumstances the applicant cannot be treated as financial Creditor, thus petition U/S 9 of IBC is not maintainable. As the applicant subrogated all its rights in favour of the HDFC Bank, therefore he cannot be treated as financial creditor - Petition dismissed.
Issues:
1. Whether the Applicant is a Financial Creditor? 2. Jurisdiction of the Tribunal to entertain the Petition. Analysis: Issue 1: Whether Applicant is a Financial Creditor or not? The term "Financial Creditor" is defined in Section 5(7) of the Insolvency and Bankruptcy Code, 2016. The Tribunal analyzed the provisions of the Tripartite Agreement to determine the status of the Applicant. - Clause-8 of the Tripartite Agreement states that in case of cancellation of the residential apartment, the entire amount advanced by HDFC should be refunded by the builder to HDFC immediately. - Paragraph 9 of the Tripartite Agreement discusses the consequences of default under the Loan Agreement leading to cancellation and the payment obligations. - Sub-para (2) of clause-9 of the Tripartite Agreement mentions the subrogation of rights to receive any amount payable by the builder to the borrower in favor of HDFC, absolving the builder of its obligation to pay the borrower. Based on the clauses of the Tripartite Agreement, it was concluded that the Applicant had assigned/subrogated all its rights to HDFC Bank, and therefore, there was no liability for the Corporate Debtor to pay the cancellation amount to the Applicant. Consequently, the Applicant could not be considered a financial creditor, leading to the rejection of the petition under Section 9 of the IBC. Issue 2: Jurisdiction of the Tribunal to entertain the Petition The objections raised by the Corporate Debtor included the contention that the Petitioner was not a Financial Creditor as per the IBC, 2016, and that the Tribunal lacked jurisdiction to entertain the petition without exhausting the remedy of mutual discussions and arbitration as per the terms of the Agreement. However, the Tribunal's decision on the first issue rendered the discussion on jurisdiction moot. The Tribunal rejected the petition, stating that since the Applicant had subrogated all its rights in favor of HDFC Bank, they could not be considered a financial creditor. The Applicant was granted liberty to file a claim for the refund of the due amount as per the supplementary agreement before the appropriate forum. In conclusion, the Tribunal's judgment centered on the interpretation of the Tripartite Agreement to determine the status of the Applicant as a Financial Creditor, leading to the rejection of the petition but allowing the Applicant to seek refund through the appropriate forum.
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