2023 (9) TMI 239 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI

Maintainability of section 9 application - NCLT rejected the application - Operational debit / creditor or not? - debt claimed is the debt owed for the supply of goods or rendering of services - breach of the Settlement Agreement - HELD THAT:- In AHLUWALIA CONTRACTS (INDIA) LTD. VERSUS LOGIX INFRATECH PVT. LTD. [2022 (9) TMI 1500 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI], it was clearly held that Memorandum of Understanding entered between the parties was only with regard to mode and manner of payment and that too after final bill certificate which was duly signed by both the parties. It was held that Application under Section 9 ought not to have been rejected. Present is also a case where the operational debt arose out of contract awarded by the Corporate Debtor to the Operational Creditor, with regard to which RA Bill Nos.49 and 50 final bills were issued. Present is not a case that Corporate Debtor denied his liability to pay the bills rather during pendency of earlier Section 9 Application entered into settlement dated 16.12.2017 for payment of the amount. The above Judgment fully support the submissions of Appellant.

The judgment of this Tribunal in AMRIT KUMAR AGRAWAL VERSUS TEMPO APPLIANCES PVT. LTD. [2020 (11) TMI 993 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] was a case where this Tribunal was examining the Application on the issue whether it is financial debt. In the said background, it was held that Settlement Agreement subsequently entered between the Financial Creditor and the Corporate Guarantor does not contain any element of financial debt, hence, its breach was not financial debt. The judgment of this Tribunal in “Amrit Kumar Agrawal” was entirely on different facts and circumstances and has no application in the present case - In the present case the nature of the operational debt was payment of RA Bills submitted by Operational Creditor and Settlement Agreement was entered for payment but payment having not been made in pursuance of the Settlement Agreement, liability of the Corporate Debtor to make the payment continues and Operational Creditor was well within its right to file Section 9 Application.

The filing of claim in the CIRP of ‘VentaRealtech Pvt. Ltd.’ has no effect on maintainability of Section 9 Application. In the CIRP what amount Operational Creditor i.e. Appellant is entitled or receives are different issues, any amount received by the Appellant in CIRP of ‘VentaRealtech Pvt. Ltd.’ may be adjusted but that itself cannot be a ground to not proceed with Section 9 Application filed by the Operational Creditor - the Adjudicating Authority committed error in rejecting the Application of the Appellant on the ground that there is no operational debt. The issue is fully covered by judgment of this Tribunal in “Ahluwalia Contracts (India) Limited vs. Logix Infratech Pvt. Ltd.”.

The impugned order of the Adjudicating Authority is unsustainable - appeal allowed.