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2021 (3) TMI 207 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - amount due and payable to the operational creditor under a settlement agreement - existence of debt and dispute or not - HELD THAT:- The claim of the applicant is based on settlement agreement and on the basis of that the petitioner claimed that since the respondent violated the terms and conditions of settlement and there is default in payment of the settlement amount, therefore, the petitioner filed the present application for initiation of CIRP for default in payment of operational debt. Whether the terms and condition of settlement agreement comes under the definition of operational debt? - HELD THAT:- On reading of three definition together, operational debt, default and debt, it can be said that definition of debt as defined under the IBC does not mean the operational debt only rather it includes financial debt as well as liability or obligation in respect of a claim which is due from any person and default means non- payment of debt, but in order to trigger section 9 of the IBC an operational creditor is required to establish a default for non-payment of operational debt as defined in section 5(21) of the IBC, which means a claim in respect of the provision of goods or services including employment or a debt in respect of the payment of dues arising under any law for the time being in force and if a person fails to establish that then they cannot initiate CIRP under section 9 of the IBC. Now it is the settled principle of law that the National Company Law Tribunal is not recovery court rather when a default of either financial debt or operational debt occurred in that case financial creditor or operational creditor may file an application for initiating corporate insolvency resolution process under section 7 or section 9 respectively. The settlement agreement on the basis of which the present application is filed by the applicant does not come under the definition of operational debt - As default of instalment of settlement agreement does not come within the definition of operational debt, hence, we are not inclined to admit the application rather we are of the view the present application is liable to be dismissed. Application dismissed.
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