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TMI Blog2023 (9) TMI 239X X X X Extracts X X X X X X X X Extracts X X X X ..... case are:- 2.1. Work Order/ Agreement was executed between the Operational Creditor and the Corporate Debtor- 'Jasmine Buildmart Private Limited' in pursuance of which RA Bills were raised by the Operational Creditor between 04.11.2011 to February, 2016. When despite regular reminders, payment was not made, a demand notice under Section 8 was issued by the Operational Creditor and Section 9 Application CP IB No.488(PB)/2017 was filed seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. During pendency of above Section 9 Application, a Term Sheet of Settlement was recorded between the parties where Corporate Debtor admitted liability of paying unpaid amount of Rs.19.81 Crores. In lieu of the Settlement amount, the Respondent has offered securities. In view of the Settlement dated 16.12.2017, Section 9 Application was dismissed as compromised between the parties on 18.12.2017. The Operational Creditor could not receive the amount as stipulated in the Settlement Agreement. A letter was issued to the Corporate Debtor to comply the Terms of the Settlement Agreement, failing which demand notice under Section 8 was issued on 28.05.2019 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Ltd.' (later named as VentaRealtech Pvt. Ltd.). It is submitted that in the CIRP of VentaRealtech Pvt. Ltd., Appellant has filed its claim for amount of Rs.19,81,00,000/- which was admitted by the Resolution Professional of 'VentaRealtech Pvt. Ltd.' It is submitted that the proceedings in the IBC are not meant for money recovery. It is submitted that the default of instalment of Settlement Agreement does not come within the definition of operational debt. 6. We have heard Learned Counsel for the parties and perused the record. 7. The Adjudicating Authority dismissed the Section 9 Application holding that debt claimed is not the debt owed for the supply of goods or rendering of services, it is a debt which has arisen from the breach of the Settlement Agreement. In paragraph 13 of the judgment, following has been held:- "13. Having regard to the conspectus of all relevant facts and circumstances and the judgments cited supra, we are of the view that the outstanding debt as claimed in the present application does not fall under the definition of Operational Debt as defined under Section 5(21) of the Code, 2016 as the debt claimed is not the debt owed for the supply of goods or r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LT dated 18.12.2017 & Order of the Hon'ble High Court dated 16.04.2019 the amount claimed stands due in default in favour of the Operational Creditor. In such circumstances, the total unpaid amount which stands due in the favor of ACIL and against the JBPL (for the work done in the structural and finishing work and retention money amounts therein) tunes up to INR 19,81,00,000 (Nineteen Crore Eighty One Lakhs Only). The transaction is described in greater detail in the note appended with the application. Due Date: 16.12.2018. The said amount in toto further fell due when JBPL admitted the outstanding amount to the tune of INR 19,81,00,000 (Nineteen Crore Eighty One Lakhs Only). Furthermore, the said amount fell due again when M/s Ahluwalia Contracts (India) Ltd. issued a Statutory Notice dated 31.07.2017, under section 8 of the Insolvency Code, 2016 and called upon the JBPL to make payment of the outstanding operational debt of INR 19,81,00,000 (Nineteen Crore Eighty One Lakhs Only) and has been due since then. The said amount further fell due on 16.12.2017, the Corporate Debtor has entered into Settlement Agreement with the admission to pay the Outstanding amount. The said a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inal bill certificate, an amount of Rs. 11 crores was to be paid. Subsequently, Memorandum of Understanding was entered on 30.09.2019 laying down the manner of payment of Rs. 11 crores amount on breach of which compelled the Appellant to file section 9 application. 8. The Adjudicating Authority has in the impugned order relied on the two orders passed by NCLT and has held that Applicant is not covered as Operational Creditor, hence the application is not maintainable. 9. Present is a case where the Appellant was awarded the contract to carry on construction and structural work and the dues claimed by the Appellant are operational debt. The Memorandum of Understanding entered between the parties was only with regard to mode and manner of payment, that too after final bill certificate which was duly signed by both the parties. 10. Adjudicating Authority did not consider the nature of transaction between the parties and has erroneously come to the conclusion that section 9 application was not maintainable. The judgement of Adjudicating Authority cannot be sustained. 11. Learned Counsel for Respondent has also fairly submitted that Corporate Debtor is unable to make payment. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment would not amount to disbursal of amount for consideration against the time value of money and breach thereof would not entitle the Appellant in the instant case to trigger Corporate Insolvency Resolution Process against the Respondent. Viewed from this prospective, we find that bouncing of cheques issued in discharge of obligation under the Settlement Agreement would not fall within the purview of default in regard to financial debt." 13. The judgment of this Tribunal in "Amrit Kumar Agrawal" (supra) was a case where this Tribunal was examining the Application on the issue whether it is financial debt. In the said background, it was held that Settlement Agreement subsequently entered between the Financial Creditor and the Corporate Guarantor does not contain any element of financial debt, hence, its breach was not financial debt. The judgment of this Tribunal in "Amrit Kumar Agrawal" (supra) was entirely on different facts and circumstances and has no application in the present case. In the present case, as noted above, the nature of the operational debt was payment of RA Bills submitted by Operational Creditor and Settlement Agreement was entered for payment but payment havi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) 9 SCC 657" to support his submission that in view of Appellant filing his claim in CIRP of 'VentaRealtech Pvt. Ltd.', his claim being partially allowed, rest was extinguished. In the CIRP of 'VentaRealtech Pvt. Ltd.', the claim of the Appellant which has not been granted shall stand extinguished but said extinguishment of claim does not extinguish the claim of the Appellant against the Corporate Debtor who was liable to pay the dues and debt of the Appellant. We, thus, are of the view that the judgment of the Hon'ble Supreme Court in "Ghanshyam Mishra and Sons (P) Ltd." (supra) does not help the Appellant in the present case. 18. We are of the view that filing of claim in the CIRP of 'VentaRealtech Pvt. Ltd.' has no effect on maintainability of Section 9 Application. In the CIRP what amount Operational Creditor i.e. Appellant is entitled or receives are different issues, any amount received by the Appellant in CIRP of 'VentaRealtech Pvt. Ltd.' may be adjusted but that itself cannot be a ground to not proceed with Section 9 Application filed by the Operational Creditor. We, thus, are of the view that the Adjudicating Authority committed error in rejecting the Application of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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