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TMI Blog2024 (4) TMI 565X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal ('the Tribunal' for short) invoking Section 95 of the Insolvency and Bankruptcy Code ('the Code' for short). 2. Heard Sri C.K. Nandakumar and Sri Om Prakash, learned senior counsel appearing for the petitioners, Sri M.S. Shanthi Bhushan, learned Deputy Solicitor General of India appearing for respondent No. 1 and Sri M.S. Shyam Sundar, learned senior counsel appearing for respondent No. 2. 3. The petitioner/firm is a developer/Infrastructure Development business hub. On 23-12-2009 the firm enters into a memorandum of understanding between the land owners of certain properties with the 2nd respondent. The 2nd respondent is Buoyant Technology Constellation Private Limited (hereinafter referred to as 'the Company' for short). Between 2010 and 2015 the respondent/Company appears to have entered into distinct Joint Development Agreements on various dates for implementing the joint development of lands as contemplated under the memorandum of understanding. The dispute arose between the two. The petitioner and Manyata Infrastructure Development, a private entity issues a notice to the respondent/Company regarding termination of Joint Development Agreement, quantifying damages a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Directors in the other two petitions are not personal guarantors of the corporate debtor nor the petitioner/firm a corporate debtor cannot be brought under the Code and consequently the petition filed under Section 95 of the Code is de hors jurisdiction and, therefore, would submit that the petition be allowed and arbitration proceedings be permitted to continue. 6. Per contra, both the learned senior counsel representing the respondent/Company would again in unison contend that though the petitioners are not personal guarantors by name, by their conduct and assurances given to them in the memorandum of understanding they step into the shoes of personal guarantor and, therefore, the petition before the Tribunal would be maintainable is the submission of the learned senior counsel Sri S. Basavaraj. The learned senior counsel Sri M.S. Shyam Sundar would contend that the petition filed is only at the scrutiny stage and no prejudice would be caused if it is to be decided by the Tribunal whether it has jurisdiction to entertain the petition or not. Therefore, the petition preferred before this Court is wholly premature. 7. The learned senior counsel for the petitioners would join iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... defined in clause (20) of Section 2 of the Companies Act, 2013 (18 of 2013), a limited liability partnership, as defined in clause (n) of sub-section (1) of Section 2 of the Limited Liability Partnership Act, 2008 (6 of 2009), or any other person incorporated with limited liability under any law for the time being in force but shall not include any financial service provider;" Section 3(8) reads as follows: "(8) "corporate debtor" means a corporate person who owes a debt to any person;" Section 3(7) defines who is a corporate person. A corporate person, under the Code, is the one defined under clause 20 of Section 2 of the Companies Act, 2013. Corporate debtor would mean, a corporate person who owes a debt to any person. Therefore, a corporate person must owe a debt to any person and the said corporate person would mean a Company as defined under clause 20 of Section 2 of the Companies Act, 2013. The Code nowhere brings in a partnership firm or directors who are individuals of the said partnership firm under the ambit of the Code. 11. Part III of the Code deals with 'Insolvency resolution and bankruptcy for individuals and partnership firms'. For partnership firms and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petition before the Tribunal can be filed invoking Section 95 of the Code by a creditor against a debtor, a corporate debtor. This was the tenor till 15-11-2019. The addition is, the personal guarantor to the corporate debtor, as observed hereinabove. Therefore, it becomes germane to notice Section 95 and the aftermath of registration of a petition under Section 95 of the Code before the Tribunal. The aftermath is found in Sections 96 and 97 of the Code. All the three run as follows: "95. Application by creditor to initiate insolvency resolution process.-(1) A creditor may apply either by himself, or jointly with other creditors, or through a resolution professional to the Adjudicating Authority for initiating an insolvency resolution process under this section by submitting an application. (2) A creditor may apply under sub-section (1) in relation to any partnership debt owed to him for initiating an insolvency resolution process against- (a) any one or more partners of the firm; or (b) the firm. (3) Where an application has been made against one partner in a firm, any other application against another partner in the same firm shall be presented in or transferred to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s filed through a resolution professional, the Adjudicating Authority shall direct the Board within seven days of the date of the application to confirm that there are no disciplinary proceedings pending against resolution professional. (2) The Board shall within seven days of receipt of directions under sub-section (1) communicate to the Adjudicating Authority in writing either- (a) confirming the appointment of the resolution professional; or (b) rejecting the appointment of the resolution professional and nominating another resolution professional for the insolvency resolution process. (3) Where an application under Section 94 or 95 is filed by the debtor or the creditor himself, as the case may be, and not through the resolution professional, the Adjudicating Authority shall direct the Board, within seven days of the filing of such application, to nominate a resolution professional for the insolvency resolution process. (4) The Board shall nominate a resolution professional within ten days of receiving the direction issued by the Adjudicating Authority under sub-section (3). (5) The Adjudicating Authority shall by order appoint the resolution professional reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Code, as the petitioners and the like do not come within the ambit of the Code. If they do not come within the ambit of the Code, it touches upon the jurisdiction, to even file a petition, under Section 95 of the Code, by any creditor against a debtor and if it is a question of jurisdiction, the answer to such question is always either a "yes", or a "no", it can never be a "may be". 16. Learned senior counsel Sri. M. S. Shyamsundar has contended what if a petition is filed before a Tribunal, it is still at the stage of the scrutiny, it has not even come up before the Tribunal. I decline to accept the said submission, as it is fundamentally flawed. If a quasi judicial authority or a Tribunal does not have jurisdiction to entertain a petition merely because it is at the stage of filing, it cannot be permitted to be proceeded further. If these submissions of the learned senior counsel is to be accepted, then it would be diluting the concept of jurisdiction itself, which dilution this Court would never even attempt to make. Therefore, if the petition is not fileable before the Tribunal, it cannot be allowed to be proceeded up to the stage of whether it is entertainable. A non-fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement (c) Obtaining transfer of katha with regard to all the Lands which are listed in the Schedule 'A' of the said Memorandum of Understanding and the Principal Agreement to the name of the present owners in the records of the Bruhat Bangalore Mahanagara Palike (d) Making out good and marketable title with regard to the Properties mentioned in Schedule 'A' to the Memorandum of Understanding dated 23.12.2009 and Joint Development Agreements dated 29/10/2010, 31/3/2011 & 26/8/2010 to the satisfaction of the Purchaser, 3) The Owner acquiring additional 11 plus Acres of lands detailed in the annexure-1 attached hereto to make a contiguous single parcel of land. 4) For purpose of clause 2 compliance of the conditions precedent on part of the Owner shall be treated to be 15 days from the date of the Owners proving such compliance of the condition precedent to the Second Party by furnishing documentary evidence of the same. 5) In the event of failure on the part of the Owner in complying with the conditions precedent in terms of clause 2 above before 31st March 2013, then in such event, the Second Party shall become entitled to seek repayment of the amounts ..... 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