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TMI Blog2018 (10) TMI 1803X X X X Extracts X X X X X X X X Extracts X X X X ..... r services of goods by the operational creditor to the corporate debtor nor did the corporate debtor enter into an agreement with the operational creditor. What is relied upon is a mandate letter. What I understood is that the corporate debtor is a service provider dealing with the financial advice and issued mandate letter dated 16/08/2016 prescribing certain terms and conditions so as to provide advice to the operational creditor and that letter has been signed by the operational creditor and has paid ₹ 3 Lakhs as advance. Alleging breach of term on the side of the corporate debtor, this application was filed contending that the applicant is an operational creditor. The operational creditor, in the case in hand, does not fall wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... feed to fish feed, the operational creditor had approached the corporate debtor for arranging an investor. Accordingly, on the basis of the mandate letter issued by the operational creditor to the corporate debtor, the operational creditor paid a sum of ₹ 3,00,000/(Rupees Three Lakhs) only to the corporate debtor as initial advance as agreed between the operational creditor and the corporate debtor. (b) From the mandate letter issued by the corporate debtor to the operational creditor for signature, it is conspicuously clear that in the event the corporate debtor is not able to arrange for a deal with the prospective investor, the entire amount paid by the operational creditor as initial advance would be refunded to the operationa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The applicant also did not propose any Insolvency resolution professional. Upon the said contention, the applicant prays for admitting the application. 3. The respondent/corporate debtor did not turn up despite delivery of notice of admission. 4. Heard the Ld. Pr. CS appearing on the side of the operational creditor/applicant. Perused the records. 5. An interesting question arises for consideration, in the case in hand as to whether return of advance in breach of terms in the mandate letter signed and executed by the operational creditor in favour of the corporate debtor dated 07/09/2016 comes under the purview of operational debt? 6. The operational creditor is a company carrying on the business of providing organised and com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Claiming the above said amount, the operational creditor has issued a demand notice on 02/01/2018. The demand notice was served on the corporate debtor on 09/01/2018 (Track Consignment at page 88 proves delivery of demand notice on 09/01/2018). 9. Ld. Pr. CS submits that despite service of demand notice on 09/01/2018, the corporate debtor did not send a reply nor raised any dispute and also did not turn up before the Adjudicating Authority to contest the application and therefore, the application is liable to be allowed. 10. He would further submit that the amount claimed by the operational creditor falls under the definition of debt as defined u/s. 3(11) of the I B Code. Section 3(11) defines debt means a liability or obligati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicant in this application does not come under the category of Central Government, State Government or any local authority nor fall within the definition of sub-section (21) of Section 5 of the Code. So the question is whether refund claim of advance paid for rendering service by the corporate debtor would fall within the meaning of a claim in respect of provision of goods; or services including employment. 15. Admittedly, the applicant herein neither did render any service to the corporate debtor nor did provide any goods to the corporate debtor. There is also no agreement entered into as such in connection with any service or services of goods by the operational creditor to the corporate debtor nor did the corporate debtor enter into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority. It is doubtful whether it would include all debts other than 'Financial Debt' because we do not find any such 'Legislative intendment' from the Part Il of IBC which deals with 'Insolvency and Liquidation for Corporate Persons'. 16. The operational creditor, in the case in hand, does not fall within the above referred 3 elements of the definition of operational creditor. Therefore, I am of the considered view that the claim of the applicant here in this case does not fall within the definition of operational debt. Therefore, I come to a conclusion that the applicant herein is not an operational creditor as defined u/s. 5(20) read with Section 5(21) of the I B Code and therefore, this application req ..... X X X X Extracts X X X X X X X X Extracts X X X X
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