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2020 (8) TMI 740 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - whether the amount claimed by the Appellant can be construed as a ‘Financial debt’ as defined under Section 5 (8) of the IBC and if the Appellant falls within the ambit of the definition of ‘Financial Creditor’ as defined under Section 5 (7) of the Code? - HELD THAT:- The demand notice dated 17.04.2018 issued by the Appellant is under Section 8 of the IBC, wherein the Appellant had addressed itself as an ‘Operational Creditor’ and called upon the Respondent to pay the ‘unpaid Operational debt’. In the demand notice, it is stated that the Operational Creditor and Corporate Debtor have executed the JDA on 25.01.2006, inter-alia for conversion of Corporate Debtor allowed in project from ownership of FSI to write off ownership and collaboration to the extent of 25% in the project and in the project land. In the entire body of the notice the Appellant has addressed the principal amount as ‘Operational debt’. In such a kind of a Joint Venture Project, both the parties, if they are a Corporate should be jointly treated to be one for the purpose of initiation of CIRP and hence this Application under Section 7 is not maintainable. The Applicant had issued notice to the Respondent under Section 8, terming it as an ‘Operational debt’. Be that as it may, this Application seeking initiation of CIRP by one partner of JDA against the other, only jeopardizes the interests of the allottees. Apart from the fact that the Joint Development Agreement entered into, is a contract of reciprocal rights and obligations, both parties are admittedly ‘Joint Development Partners’, who entered into a consortium of sorts for developing an Integrated Township and for any breach of terms of contract, Section 7 Application is not maintainable as the amount cannot be construed as ‘Financial Debt’ as defined under Section 5(8) of the Code. The Appellant cannot be termed to be a ‘Financial Creditor’ as envisaged under Section 5(7) of the IBC, 2016 - Appeal dismissed.
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