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2020 (10) TMI 261 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT - The application claims himself to be the Financial Creditor on the basis financial debt under Section 5(8)(f) explanation, but now he has changed his stand and claims himself to be financial creditor, but not under Section 5(8)(f) explanation rather under Section 5(8) of the IBC. We would like to refer the decision of the co-ordinate bench of NCLT, Allahabad in the case M/S DASAPRAKASH HOTELS AND RESORTS PVT LTD VERSUS M/S KUMAR ASHIYANA PVT LTD 2018 (11) TMI 1800 - NATIONAL COMPANY LAW TRIBUNAL, ALLAHABAD held that Applicant has filed present application for the alleged breach of compromise agreement dated 19.07.2017 arising out of Company Petition No. 43 of 2012 which got dismissed as infructuous vide order dated 07.08.2017 and it will be treated as decree of the Court and upon which Ld. Counsel for applicant placed reliance is concerned, in course of arguments we have notice in that decision definition of decree was not discussed by them. Therefore, we are unable to accept the view taken by the co-ordinate bench of NCLT Allahabad that the compromise arrived between the parties treated as decree likewise the letter dated 25.01.2019 will also be treated as decree. Thus, the applicant is an allottee under Section 5(8)(f) of the IBC and same is challenged before the Hon'ble Apex Court in WP (Civil)-26/2020 in which Hon'ble Apex Court held that the status quo, as of today, with respect to the pending applications, shall be maintained in the meanwhile . List the case on 04.03.2020, awaiting order in case of Hon'ble Apex Court in WP (Civil)-26/2020.
Issues:
1. Interpretation of the Insolvency and Bankruptcy Code regarding the definition of financial debt under Section 5(8)(f) explanation. 2. Determination of the status of the applicant as a financial creditor under Section 5(8) of the IBC. 3. Consideration of the applicant's claim based on a compromise agreement as a decree. Analysis: 1. Interpretation of the Insolvency and Bankruptcy Code (IBC): The case involves a dispute regarding the interpretation of the IBC concerning the definition of financial debt under Section 5(8)(f) explanation. The applicant initially claimed to be a financial creditor under this provision but later argued that he falls under Section 5(8) alone. The Tribunal referred to the provisions of Section 5(8) and highlighted that financial debt includes various categories of debts disbursed against the consideration for the time value of money. The Tribunal also cited a relevant decision by the Hon'ble Apex Court to support the interpretation of financial debt under the IBC. 2. Status of the Applicant as a Financial Creditor: The Tribunal analyzed the applicant's claim to be a financial creditor under Section 5(8) of the IBC based on a settlement agreement with the Corporate Debtor. The applicant contended that the defaulted amount sought from the Corporate Debtor was related to installment payments made under a real estate project. The Tribunal found that the applicant's claim falls within the definition of financial debt under Section 5(8)(f) explanation, rejecting the applicant's argument to the contrary. The Tribunal emphasized the importance of the pending matter before the Hon'ble Apex Court in maintaining the status quo regarding the applicant's claim. 3. Consideration of the Compromise Agreement as a Decree: The Tribunal examined whether the compromise agreement between the parties could be treated as a decree. While the applicant argued that the agreement should be considered a decree, the Tribunal referred to the definition of decree under Section 2(2) of the CPC and previous decisions. The Tribunal concluded that the letter dated 25.01.2019, which formed the basis of the present application, does not meet the criteria to be classified as a decree. Therefore, the Tribunal rejected the contention that the compromise agreement should be treated as a decree. In conclusion, the Tribunal refrained from making a final determination on the merits of the case due to the pending writ petition before the Hon'ble Apex Court. The Tribunal decided to await the outcome of the writ petition before proceeding further. The case was listed for a future date pending the order from the Hon'ble Apex Court in WP (Civil)-26/2020.
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