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2021 (2) TMI 305 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditor - Refund of token amount - existence of debt and default or not - HELD THAT:- The binding Term Sheet dated 2nd August 2018 is a mere understanding between the parties which captures the basic commercial terms and contend a specific clause that the parties would endeavor to execute the Development Management Agreement and that if the Development Management Agreement is not executed within the stipulated time, the binding Term Sheet would be automatically terminated. The binding Term Sheet thus demonstrates that the Petitioner had undertaken to provide the service to their Corporate Debtor and the same did not fructify and was thus terminated / cancelled. The execution of Development Management Agreement would have qualified the Petitioner to claim the Development Management Agreement fees which is an Operational Debt but since the Development Management Agreement was not executed, the termination of the binding term sheet thus triggers the liability of refund of moneys as agreed under Clause 13 of the Term Sheet. The token amount was agreed was transferred by the Petitioner to the Corporate Debtor upon execution of the Term Sheet and therefore, as such upon termination of the Term Sheet, the token amount is to be repaid as agreed under Clause 13 and can be construed as the part of the Operational Debt and part services rendered to the Corporate Debtor in accordance with mutual obligations set out in the Term Sheet. The binding Term Sheet dated 2nd August, 2018 clearly stipulates the obligation of the Petitioner to pay the money to the Corporate Debtor at the time of execution of the Term Sheet and hence, the liability of refund of such monies paid is well defined in the case of termination of the Term Sheet. Therefore, the Corporate Debtor is liable to refund the token amount to the Petitioner which is part of the services provided to the Corporate Debtor. The Petition filed by the Operational Creditor is on proper Form 5, as prescribed under the Adjudicating Authority Rules and is complete - Petition under sub-section (2) of Section 9 of I&B Code, 2016 filed by the Operational Creditor for initiation of CIRP in prescribed Form 5, as per the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 is complete. The existing operational debt beyond the threshold limit against the Corporate Debtor and its default is also proved. Accordingly, the Petition filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 for initiation of corporate insolvency resolution process against the Corporate Debtor deserves to be admitted. Application admitted - moratorium declared.
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