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TMI Blog2022 (5) TMI 921X X X X Extracts X X X X X X X X Extracts X X X X ..... And Dr. Binod Kumar Sinha, Member (T) For the Appellant : P. Sriharsha Reddy, Sridhar Kodipelli, Jyothi Rani and Ashiwarya Thakur, Advocates For the Respondents : V. Sethu Madhava Rao and V. Dyumani, Advocates ORDER 1. This is a Petition filed by the Operational Creditor under Section 9 of Insolvency and Bankruptcy Code, 2016, R/w. Rule 6 of Insolvency Bankruptcy (Application to the Adjudicating Authority) Rules, 2016, seeking admission of the application, initiation of Corporate Insolvency Resolution Process, granting moratorium and appointment of Interim Resolution Professional as prescribed under the Code and relevant Rules against the Corporate Debtor, alleging that the Corporate Debtor had failed in discharging the debt amount of Rs. 5,06,59,566/- (Rupees Five Crores Six Lakhs Fifty Nine Thousand Five Hundred Sixty Six only) which includes principal amount of Rs. 4,75,23,619/- alongwith interest from the date of default i.e. on 11.04.2019. 2. M/s. Indiabulls Distribution Services Limited, for short 'Applicant/Petitioner/Operational Creditor' is engaged, inter alia, in the business of distribution for third-party projects of Real Estate Sector in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the statutory time period of 10 days to indicate either payment of debt or existence of dispute. ii. Copies of the relevant Agreements are filed at page Nos. 181 to 275 of the application. iii. Copies of the Awards each dated 11.04.2019 passed by the Hon'ble Arbitrator in relation to 'Vasathi Avante' at Bangalore and Vasathi Anandi' at Hyderabad are filed as Exhibit-4 Exhibit-5 at page Nos. 20 to 51 51 to 82 of the application respectively. iv. Certified copy of Bank Statement is filed as Exhibit-8 at page Nos. 91 to 180 of the application. v. It is averred that the Petitioner, left with no further option, filed the instant petition and the same may be admitted by this Adjudicating Authority. 7. Per contra, the Corporate Debtor filed a reply dated 16.07.2021 stating that the application filed and framed is not maintainable and is liable to be rejected on the following grounds: i. The Applicant has not filed any evidence authorising Mr. Narender Kumar as Authorised Signatory to file the instant application. ii. The Applicant filed Arbitration Case for refund of security amount of Rs. 2,90,58,657/- and Rs. 3,99,299/-, which canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tration Petition No. IA 1188/2020 (for exemption) in O.M.P.(Comp) 97/2020 and Arbitration Petition No. IA 1192/2020 (for exemption) in O.M.P.(Comp) 98/2020 challenging the awards dated 11.04.2019 passed by the Hon'ble Arbitrator, which were dismissed by the Hon'ble High Court, New Delhi, vide orders dated 28.01.2020 as the applications were filed beyond the period of limitation. Challenging the said orders, the Respondent preferred SLP before the Hon'ble Supreme Court on 05.03.2020 and 06.03.2020 respectively and the same are yet to be listed. 8. In Rejoinder, the Applicant has brought to our notice orders issued by the Hon'ble High Court of Delhi, in O.M.P.(Comp) 97/2020 and in O.M.P.(Comp) 98/2020, dated 28.01.2020 rejecting the Respondent's prayers against the Arbitral Awards. The Learned Counsel for the Applicant also brought to our attention the order of Hon'ble Supreme Court in Special Leave to Appeal (C) No. 12288/2020 which was filed by the Corporate Debtor against the Order of Hon'ble Delhi High Court supra wherein Hon'ble Supreme Court have pleased to dismiss the Corporate Debtor's SLP against the Order of Hon'ble Delhi High Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt, but received no relief from the Hon'ble High Court. Subsequently, their SLP before the Hon'ble Supreme Court was also dismissed. 12. It is also seen from record that the Applicant had filed a Memo dated 28.01.2020, in response to the observations made by the Registry, stating that the subject matter of the instant application falls within the ambit of Section 9 and placed reliance on the order dated 22.10.2020 passed by the Hon'ble NCLT, New Delhi, Bench-V in (IB) 1493 (ND) 2019 in the matter of M/s. Suresh Chand Sons LLP. 13. The Corporate Debtor has advanced the following contentions to challenge the instant Application: i. That the Application has not been filed by a duly authorised person on behalf of the Applicant. ii. That the claimed amount does not fall within the definition of 'Operational Debt' as the same is for 'marketing fee' and refund of security deposit amount, which cannot be called 'Operational Debt' u/s. 5(21) of the Code; and iii. That the claimed amount is 'disputed' and the Corporate Debtor is having a counter claim on the Applicant, therefore, the instant Application is not maintainable. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso made by these Marketing Agencies (Applicant ILPL) as per the terms of these Agreements only. It is an undeniable fact that the Applicant had rendered marketing services to the Corporate Debtor and raised invoices according to the terms of the agreement. The Agreements themselves are evidence of business relationship between the Applicant and the Corporate Debtor. Further, the Agreements themselves incorporate Arbitration clause, which is another evidence that there was business relation between the parties and therefore Applicant will fall within the category of Operational Creditor. This has also been held by the Hon'ble Supreme Court in Swiss Ribbons Pvt. Ltd. vs. Union of India WP(C) No. 99 of 2018, wherein Hon'ble Apex Court differentiated between a Financial Creditor and an Operational Creditor as under: Para 23. A perusal of the definition of financial creditor and financial debt makes it clear that a financial debt is a debt together with interest, if any, which is disbursed against the consideration for time value of money. It may further be money that is borrowed or raised in any of the manners prescribed in Section 5(8) or otherwise, as Section 5(8) is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r hand, financial debts made to banks and financial institutions are well-documented and defaults made are easily verifiable. 16. In view of the above factual and legal positions, we have no doubt that the claimed amount shall fall within the definition of 'Operational Debt' in Section 5(21) and the Applicant is an Operational Creditor in terms of Section 5(20) of the Code. Thus, the second argument of the Corporate Debtor also fails. 17. As regards the argument of the Corporate Debtor that the claimed amount is disputed, as counter claims were filed by the Corporate Debtor before Hon'ble Arbitral Tribunal, suffice it to say that as soon as the Hon'ble Arbitral Tribunal had given the final Award in favour of the Applicant, all disputes between the parties are to be deemed to have been fully resolved, particularly in view of the fact that the Corporate Debtor's Appeal under Section 34 of the Arbitration Conciliation Act, 1996 was dismissed by the Hon'ble Delhi High Court and SLP filed by the Corporate Debtor was also dismissed by the Hon'ble Supreme Court. Since the instant Application was filed after the Final Award date, the argument of disput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner to pay a sum of Rs. 2,00,000/- towards the advance fee of IRP and expenses towards CIRP, which shall be ratified later on by CoC. 24. The moratorium is hereby declared which shall have effect from the date of this order till the completion of CIRP. For the purposes referred to in Section 14 of the IB Code, 2016. It is hereby ordered to prohibit all of the following namely:- i. The institution of suits or continuation of pending suits or proceedings against the Corporate Debtor including execution of any judgment, decree or order in any court or law, tribunal arbitration panel or other authority; ii. Transferring, encumbering, alienating or disposing of by the Corporate Debtor any of its assets or any legal rights or beneficial interest therein; iii. Any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitization and Reconstruction of Operational Assets and Enforcement of Security Interest Act, 2002 (54 of 2002); iv. The recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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