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2021 (7) TMI 564 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational debt or not - payment of Minimum Guaranteed Royalties to the Operational Creditor - use of Trademark - licensed product - existence of debt and dispute or not - HELD THAT:- As per the judgment VIKAS SALES CORPORATION AND ANOTHER VERSUS COMMISSIONER OF COMMERCIAL TAXES AND ANOTHER (AND OTHER APPEALS AND WRIT PETITIONS) [1996 (5) TMI 363 - SUPREME COURT] it is held that incorporeal rights like trademarks, copyrights, patents and rights in personam capable of transfer or transmission are included in the ambit of "goods" - Further having considered the facts and circumstances and the material available on record the Adjudicating Authority is of the view that for a claim to fall within the definition of 'operational debt', the operational creditor must establish that it has a "right to payment" "in respect of the provision of "goods or services" and also that Corporate Debtor has committed a "default" towards its "liability or obligation in respect of such outstanding claim". In the present case, the MGR was a fixed payment due and payable by the Corporate Debtor to the Operational Creditor under the Agreement and the non-payment by the Corporate Debtor, for using the "Trademark" which is the Licensed "Product" of the Operational Creditor, amounted to an "operational debt" under the IBC. It has been observed that time and again the Corporate Debtor has admitted its liability be it by way of making a part payment (first and second quarter payment) or by submitting before the Adjudicating Authority that "admittedly the claim of the Applicant arises out of failure to pay the Minimum Guaranteed Royalties and were not paid on the condition that the Operational Creditor under the obligation to promote the brand for the Corporate Debtor" therefore, it is a clear admission of default and this Adjudicating Authority does not have to indulge in the details or the terms of the Agreement. The Corporate Debtor did not raise any dispute in terms of Section 8(2)(a) read with Section 5(6) of the IBC, either with regard to the (a) existence of the amount of debt, (b) the quality of goods or service, or (c) the breach of a representation or warranty, either directly or indirectly. Therefore, the defense of pre-existence of dispute can be categorized as a moonshine dispute. The Application is admitted and the commencement of the CIRP is ordered - Moratorium declared.
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