TMI Blog2021 (3) TMI 206X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of settlement agreement comes under the definition of operational debt? - HELD THAT:- As per the settlement agreement cheques were given to the petitioner which is mentioned at page Nos. 96 and 97 of the paper book and when the petitioner presented the cheque, the two cheques were dishonoured. Thereafter, the petitioner sent a demand notice under section 8(1) of the IBC and then filed this application. A claim in respect of the provision of goods or services including employment or a debt in respect of the payment of dues arising under any law for the time being in force is an operational debt and only default in respect of that operational debt a person can initiate CIRP under section 9 of the IBC - It is also found that the settle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gal Advisor and Consultant with operational creditor for 1 (one) year, for a fixed yearly retainership fees of ₹ 10,50,000 and issued 12 post-dated cheques of ₹ 87,500 each, i. e., ₹ 78,750 fees TDS of ₹ 8,750 in favour of the operational creditor. Further, retainership arrangement was executed between the operational creditor and corporate debtor on January 3, 2019 as Legal Advisor and Consultant with operational creditor for 1 (one) year, for a fixed yearly retainership fees of ₹ 8,40,000 and issued 12 post dated cheques of ₹ 63,000 each, i. e., ₹ 70,000 less TDS of ₹ 7,000 in favour of the operational creditor. 3. Further, out of the 36 cheques issued by the corporate debtor and its g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the operational creditor for ₹ 4,50,000 dishonoured for the reason of Funds Insufficient . Notice to corporate debtor's group company and its directors was sent on account of dishonour of cheque demanding ₹ 4,50,000. 4. On January 28, 2020 second cheque No. 541511 issued by corporate debtor's group company in favour of operational creditor for ₹ 1,01,250 was dishonoured for the reason of Funds Insufficient . First cheque No. 499007 issued by the corporate debtor in favour of the operational creditor for ₹ 3,48,750 was dishonoured for the reason of Funds Insufficient . Notice to corporate debtor's group company and its directors on account of dishonour of cheque demanding ₹ 1,01,250. Furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... debt. Therefore, we would like to consider at first whether the terms and condition of settlement agreement comes under the definition of operational debt. 8. Learned counsel for the petitioner submitted that earlier the petitioner had rendered service and in lieu of that the petitioner was entitled to get the defaulted amount but in the meantime there was a settlement between the parties and a settlement agreement dated December 27, 2019 was executed between the parties. He further submitted that he has attached the same at page No. 94 of the paper book. He further submitted that as per the settlement agreement cheques were given to the petitioner which is mentioned at page Nos. 96 and 97 of the paper book and when the petitioner presen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... then we find that the settlement agreement on the basis of which the present application is filed by the applicant does not come under the definition of operational debt. At this juncture we would also like to refer a decision of the National Company Law Tribunal, Allahabad Bench in Company Petition (IB) No. 343/ALD/2018 in the matter of Delhi Control Devices P. Ltd. v. Fedders Electric and Engineering Ltd. [2021] 13 Comp Cas-OL 286 (NCLT), decided on May 14, 2019 in which the National Company Law Tribunal, Allahabad Bench held that (page 289) : . . . unpaid instalment as per the settlement agreement cannot be treated as operational debt as per section 5(21) of the IB Code. The failure or breach of settlement agreement cannot be a ground t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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