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2022 (7) TMI 1283 - AT - Insolvency and BankruptcyRejection of application for initiation of CIRP - Failure to invoke arbitration clause - Consequence of acknowledging the debt in the minutes of meetings of corporate debtor - Period of limitation - Financial Creditors - existence of debt and dispute or not - HELD THAT:- Both the sub-contract which has been brought on the record clearly indicate that financial liability taken by the Appellant as well as the Corporate Debtor towards carrying out the project was divided and all those financial liabilities were towards the completion of the project. There was no disbursement of the loan for the time value of money which is essential requirement for a debt to be treated as financial debt under Section 5(8) of the IBC. The minutes of meeting dated 16.03.2018 on which Counsel for the Appellant has much relied admits the liability of the Corporate Debtor to make the payment. The mere fact that the Corporate Debtor has admitted liability to make payment in its minutes of meeting does not change the character of the transaction into a financial debt. In Clause 18 of the contract contains arbitration clause, for settling amicably by mutual consultation and thereafter approaching the arbitration as per Arbitration & Conciliation Act, 1996. The Appellant ought to have taken recourse to Clause 18 of the Sub-Contract Agreement dated 07.03.2017 and these issues could not have been decided in IBC proceedings. The Adjudicating Authority has rightly held that it was not financial debt and rejected Section 7 Application. There is no error in delivering the judgment invoking Rule 151 of the NCLT Rules, 2016 due to absence of Technical Member who has already agreed with the judgment - Appeal dismissed.
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