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2023 (8) TMI 1099 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Operational Creditors - claim of the Appellant was that his EMD is not refunded - HELD THAT - Present is a case where the Appellant was only a tenderer who has submitted EMD along with the tender which tender was admittedly rejected. The EMD payment by the Appellant was not towards any goods or services and the submission that in event the tender was accepted the Appellant would have provided services is far-fetched to accept the claim relating to goods and services. The judgment which has been relied by the Counsel for the Appellant in Consolidated Construction Consortium Limited vs. Hitro Energy Solutions Private Limited 2022 (2) TMI 254 - SUPREME COURT was in entirely different facts where amount of Rs.50 lakhs was paid towards the project which was directed to be paid and on account of non-payment of the said amount the proceedings were initiated. The facts of the present case are clearly distinguishable and the above judgment does not help the Appellant. Thus, no error has been committed by the Adjudicating Authority in rejecting Section 9 Application - Appeal is dismissed.
Issues involved:
The appeal against the rejection of Section 9 Application by the Adjudicating Authority, based on the contention that the earnest money deposit (EMD) submitted by the Appellant in pursuance of a tender should be considered as operational debt. Summary of Judgment: Issue 1: Rejection of Section 9 Application The Appellant filed an appeal against the order of the Adjudicating Authority rejecting the Section 9 Application, contending that the EMD submitted should be considered operational debt. The Adjudicating Authority held that the EMD in this case was not operational debt as it was not related to the provision of goods or services. Details: The Appellant had submitted EMD along with tenders to the 'Maharashtra Airport Development Company Limited,' which were subsequently rejected. The Appellant claimed that the non-refund of EMD led to the Section 9 Application. However, the Adjudicating Authority concluded that the EMD deposit was not in connection with goods or services, thus not constituting operational debt. Issue 2: Interpretation of 'Operational Debt' The Counsel for the Appellant argued that the EMD should be considered as an advance payment for services and covered under operational debt, citing a Supreme Court judgment in "Consolidated Construction Consortium Limited vs. Hitro Energy Solutions Private Limited." Details: The definition of 'operational debt' under Section 5(21) includes claims related to the provision of goods or services. The Counsel relied on the Supreme Court judgment, emphasizing that even advances related to goods and services are considered operational debt. However, the Tribunal found that the EMD in this case did not have a nexus with goods or services, unlike the scenario in the referenced judgment. Conclusion: The Tribunal dismissed the appeal, stating that the EMD payment by the Appellant was not for goods or services, and the claim that services would have been provided if the tender was accepted was not convincing. The Tribunal distinguished the facts of the case from the cited judgment and upheld the Adjudicating Authority's decision to reject the Section 9 Application. Final Decision: The appeal was dismissed, but the Appellant was granted the option to pursue further legal remedies within the bounds of the law.
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