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2022 (3) TMI 410 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT - On reading the terms of the Joint Development Agreement, it is clear that in the project there are certain things to be done on the part of the petitioner herein, who has given the land as part of the bargain and there is conjoint role on the part of the developer the Respondent herein for completion of the project. No doubt clause 4.5 deals with the period for which the project should be completed but on a perusal of other clauses of JDA, it is clear that both the parties have agreed to certain terms for sharing, on completion of the project and also to take over the property, if it is not sold. In that situation the reading of these clauses makes it clear that the percentage of sharing has already been determined by both the parties and it is evident that they stand as one in the promotion of these project except to the extent that sharing of the revenue has been demarcated in respect of each project according to their terms of agreement. On reading the various clauses of the JDA, which is almost identical in all the three JVAs (Joint Venture Agreement), it appears to be a case of joint Development by proportionate participation of both the parties and sharing of the profits or the built-up area in the manner specified in the JVA. Nowhere, in the JVA, there is an indication to the effect that Respondent has to provide services to the Petitioner, if both are to share the project by putting the land and development works and sharing the land and technical support for development and share the profits, it can be only termed as a case of JV Project and not a case of service provider by one party or the other - The revenue sharing concept which is the key to, this JVA makes it very clear that it cannot be turned as a service owed by the Respondent to the petitioner; both will have to sail together or sink, because of the JVA. Furthermore, we also notice that at page 136 to 145, are the statements given by the respondent in the normal course of business, stating details of the property under development and the share of the petitioner under the JVA. In terms of the JVA a substantial amount of ₹ 23,44,53,000/- has been received by the petitioner from the respondent/corporate debtor and there is a balance of ₹ 03,92,18,660/-. This should at best be termed as an ongoing business liability which should have been resolved between the parties in terms of the JVA. This makes it clear that it is not a case of debt but is a case of liability as between one partner and the other partners in the JVA. There are no merit in this case for admission under Section 9 as an Operational Creditor and the same is dismissed.
Issues Involved:
1. Determination of whether the petitioner qualifies as an Operational Creditor under the Insolvency and Bankruptcy Code (IBC). 2. Examination of the Joint Development Agreement (JDA) and Joint Venture Agreements (JVA) terms. 3. Analysis of the financial transactions and liabilities between the parties. 4. Consideration of the applicability of the IBC provisions to the contractual relationship. 5. Evaluation of the petitioner's claims and the respondent's defenses. Issue-wise Detailed Analysis: 1. Determination of whether the petitioner qualifies as an Operational Creditor under the Insolvency and Bankruptcy Code (IBC): The petitioner, M/s. Samyak Projects Private Limited (SPPL), filed a petition under Section 9 of the IBC, claiming to be an Operational Creditor of the Corporate Debtor, M/s. Ansal Housing and Construction Limited (AHCL). The respondent disputed this claim, arguing that the relationship between the parties was governed by a Joint Development Agreement (JDA) and Joint Venture Agreements (JVA), which outlined a revenue-sharing arrangement rather than a service-provision relationship. The tribunal concluded that the petitioner did not qualify as an Operational Creditor because the agreements indicated a joint development project with shared responsibilities and profits, not a service provider relationship. 2. Examination of the Joint Development Agreement (JDA) and Joint Venture Agreements (JVA) terms: The tribunal reviewed the JDA and JVA terms in detail. The agreements outlined the roles and responsibilities of both parties, including land provision by SPPL and development by AHCL. Key clauses related to costs, construction, completion, and revenue sharing were examined. For instance, Clause 4.5 of the JDA specified the construction timeline, while Clause 7 detailed the cost responsibilities. Clause 12 elaborated on the sharing of sales realizations and other revenues. The tribunal noted that these agreements reflected a joint development effort with mutual obligations, rather than a service contract. 3. Analysis of the financial transactions and liabilities between the parties: The petitioner claimed various amounts as dues from the Corporate Debtor, supported by demand notices and statutory notices. The tribunal examined the financial transactions and found that substantial amounts had already been received by the petitioner under the JDA, with ongoing liabilities and claims between the parties. For example, the petitioner admitted to receiving significant sums for different projects but claimed additional amounts with interest. The tribunal viewed these as ongoing business liabilities rather than debts owed to an Operational Creditor. 4. Consideration of the applicability of the IBC provisions to the contractual relationship: The tribunal considered whether the IBC provisions were applicable to the contractual relationship between the parties. It referred to the definitions of "Operational Creditor" and "Operational Debt" under Section 5 of the IBC and concluded that the petitioner's claims did not fit these definitions. The agreements indicated a joint venture with shared risks and profits, not a creditor-debtor relationship. The tribunal also noted that the agreements provided for arbitration in case of disputes, further supporting the view that the relationship was not one of service provision. 5. Evaluation of the petitioner's claims and the respondent's defenses: The tribunal evaluated the petitioner's claims for amounts due under the JDA and JVA, along with the respondent's defenses. The respondent argued that the claims were part of ongoing business transactions and not debts owed to an Operational Creditor. The tribunal agreed, noting that the agreements outlined a comprehensive revenue-sharing arrangement, including provisions for unsold stock and future revenues. The tribunal also referred to a similar case (M/s. Vipul Limited vs. M/s. Solitaire Buildmart Pvt. Ltd.), where the Hon'ble NCLAT held that a joint development agreement constituted a contract of reciprocal rights and obligations, not a basis for an Operational Creditor claim under the IBC. Conclusion: The tribunal dismissed the petition, concluding that the petitioner did not qualify as an Operational Creditor under the IBC. The agreements reflected a joint development project with shared responsibilities and profits, not a service provider relationship. The tribunal also dismissed an application by the petitioner seeking to restrain the respondent from selling units in the projects, as it was deemed infructuous in light of the main petition's dismissal.
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