TMI Blog2017 (5) TMI 1432X X X X Extracts X X X X X X X X Extracts X X X X ..... ue of money. However the framer of the Code has not included in the expression 'Operation Debt' as any debt other than the 'Financial Debt'. It is thus confined to aforesaid four categories like goods, services, employment and Government dues. In the present case the debt has not arisen out of the provisions of goods or services. The debt has also not arisen out of employment or the dues which are payable under the statute to the Centre/State Government or local body. The refund sought to be recovered is necessarily associated with the delivery of the possession of immovable property which has been delayed. The 'Operational Creditors' are those persons to whom the 'Corporate Debt' is owed and whose liability from the entity comes from a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER 1. The petitioners' claim to be 'Operational Creditor' within the meaning of sections 8 9 of the Insolvency and Bankruptcy Code, 2016 (for brevity 'the Code') and have prayed that insolvency process be initiated against Respondent 'Corporate Debtor' as it has committed default and has not been able to pay despite the demand made. 2. Facts in brief may first be noticed. The petitioners are joint holders of an allotted apartment in the project of the Respondent Company known as 'Adventure Mall' They had proposed to develop the aforesaid project at Plot No.9, Tech Zone, Greater Noida. The Respondent had failed to pay admitted debts of ₹ 29,44,175/- which is the amount paid by the Pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;Operational Creditor' the Petitioner has to satisfy the requirements of section 5(20) and (21) of the Code. According to section 9(1) a petition like the one in hand could be maintained only by an 'Operational Creditor' against the 'Corporate Debtor. The aforesaid expression has been defined in section 5(20) (21) which would also be attracted and applicable. Section 5 (20) (21) of the code read thus: 5. In this Part, unless the context otherwise requires,- (20) operational creditor means a person to whom an operational debt is owed and includes any person to whom such debt has been legally assigned or transferred (21) operational debt means a claim in respect of the provision of goods or services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the possession of immovable property which has been delayed. 9. The next question is whether the Petitioner could be regarded as an 'Operational Creditor' within the meaning of section 5(20). The 'Operational Creditors' are those persons to whom the 'Corporate Debt' is owed and whose liability from the entity comes from a transaction on operations. The final report of the Committee in para 5.2.1 defines 'Operational Creditor' like the wholesale vendor of spare parts whose spark plugs are kept in inventory by Car Mechanic and who gets paid only after spark plugs are sold to acquire the status of 'Operational Creditor' so and so forth. The Petitioner in the present case has neither supplied any good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e four corners of 'Operational Creditor as per Section 9 of the IBC it must be shown that he is a person to whom an 'Operational Debt' is owned or it is legally assigned/transferred as is patent from a bare perusal of Section 5 (20) of IBC. The expression 'Operational Debt' has been defined by Section 5 (21) of IBC and it must fulfill following substantive elements namely: (a) Debt arising out of provisions of goods; or (b) services; or (c) out of employment. It also covers dues arising under any law for the time being in force and payable to the Central or State Government or local authority. It is doubtful whether it would include all debts other than 'Financial Debt' because we do not find any suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave refrained from entertaining the application at the initial stage itself when the Respondents have not entered appearance and are not present before us. Therefore the right of the Applicants before any other forum shall not be prejudiced on account of dismissal of instant application.' 4. A perusal of the aforesaid paras would make it evident that the petitioners cannot be treated as 'Operational Creditor' within the meaning of section 9 as the debt incurred by the respondents has not arisen out of provisions of goods, services or employment. It can also not be considered 'Financial Debt' within the meaning of section 5(8) to mean a debt which is disbursed against the consideration of the time value or money. 5. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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