2022 (1) TMI 1135 - AT - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Dishonor of Cheques - cheques were given prior to the Sale Deed - Corporate Debtor failed to make repayment of its dues - Operational Creditors or not - pre-existing dispute or not - whether the claim made by the Respondent is an Operational Debt and the Respondent is an Operational Creditor? - HELD THAT - The word claim as defined under sub section 6 of section 3 means (a) a right to payment, whether or not, such right is reduced to judgment, fixed, disputed, undisputed, legal, equitable, secured or unsecured (b) right to remedy for breach of contract under any law for the time being in force, if such breach gives rise to a right to payment, whether or not such right is reduced to judgment, fixed, matured, unmatured, disputed, undisputed, secured or unsecured. Further, sub section 11 of Section 3 defined debt means a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operational debt. The word Operational Creditor defined under sub Section 20 of Section 5 of I B Code, 2016, Operational Creditor means a person to whom an operational debt is owed and includes any person to whom such debt has been legally assigned or transferred. In the instant case, the covenants as mentioned in the Memorandum of Understanding dated 08.06.2015 clearly mentions and admits that the payment of ₹ 6 Crores is a liability on the part of the Corporate Debtor for the services rendered. Therefore, the definition of Operational Debt clearly attracts in the instant case, since the Respondent had provided services and in consideration thereof the Corporate Debtor admit its liabilities for the said services. Further, the Respondent also clearly fall under the category of Operational Creditor since an operational debt is owed to the Operational Creditor. This Tribunal comes to a resultant conclusion that the Respondent s claim is an Operational Debt and the Respondent falls under the category of Operational Creditor and there is no pre-existence of dispute. Further, it is not time barred as seen from the Demand Notice issued by the Respondent and reply thereof by the Appellant - this Tribunal hold that the order passed by the Adjudicating Authority has no infirmity or illegality - appeal dismissed.

Summary

Issues Involved:
1. Whether the Respondent is an Operational Creditor.
2. Whether the debt is an Operational Debt.
3. Whether there was a pre-existing dispute.
4. Whether the claim is time-barred.

Issue-wise Detailed Analysis:

1. Whether the Respondent is an Operational Creditor:

The Respondent claimed to be an Operational Creditor engaged in land development and construction activities. The Corporate Debtor purchased land from the Respondent and agreed to pay ?6 Crores for services rendered, including land development, conversion to residential purposes, obtaining approvals, and other related activities. The Memorandum of Agreement (MOA) dated 08.06.2015 was executed to formalize this payment. The Tribunal noted that the MOA clearly mentioned the liability of ?6 Crores as a payment for services rendered, thus categorizing the Respondent as an Operational Creditor under Section 5(20) of the IBC.

2. Whether the debt is an Operational Debt:

Operational Debt is defined under Section 5(21) of the IBC as a claim in respect of the provision of goods or services. The Tribunal observed that the MOA dated 08.06.2015 explicitly acknowledged the Corporate Debtor's liability to pay ?6 Crores for services rendered by the Respondent. This acknowledgment and the issuance of 12 cheques for the said amount confirmed that the debt was indeed an Operational Debt as it arose from the provision of services by the Respondent.

3. Whether there was a pre-existing dispute:

The Appellant argued that there was a pre-existing dispute regarding the debt, citing various legal notices and the dishonor of cheques. However, the Tribunal referred to the Adjudicating Authority's observation that there was no pre-existing dispute. The Tribunal emphasized that the MOA, signed by both parties, clearly established the liability of ?6 Crores. The Tribunal also noted that the Appellant's objections were not substantiated with evidence and appeared to be an afterthought. Therefore, the Tribunal concluded that there was no genuine pre-existing dispute.

4. Whether the claim is time-barred:

The Appellant contended that the claim was barred by limitation. However, the Tribunal found that the demand notice issued by the Respondent on 08.03.2019 and the subsequent reply by the Corporate Debtor indicated that the claim was within the limitation period. The Tribunal concluded that the claim was not time-barred.

Conclusion:

The Tribunal concluded that the Respondent's claim was an Operational Debt and that the Respondent was an Operational Creditor. There was no pre-existing dispute, and the claim was not time-barred. The order passed by the Adjudicating Authority was upheld, and the appeal was dismissed as devoid of merits.

Final Order: The appeal is dismissed with no orders as to cost.