TMI Blog2022 (8) TMI 766X X X X Extracts X X X X X X X X Extracts X X X X ..... nd any support to the Appellant. The guarantee referred to in Section 5(8)(i) must relate to any of the items referred to in sub clauses (a) to (h). The mobilization advance given by the Appellant to the Corporate Debtor does not fall in any of the clauses (a) to (h) hence no benefit can be availed of the Appellant of provisions of Section 5(8)(i). Whether the mobilization advance by the Appellant to the Corporate Debtor was an Operational Debt? - HELD THAT:- In view of the law laid down by the Hon ble Supreme Court in M/S CONSOLIDATED CONSTRUCTION CONSORTIUM LIMITED VERSUS M/S HITRO ENERGY SOLUTIONS PRIVATE LIMITED [ 2022 (2) TMI 254 - SUPREME COURT ], the mobilization advance given by the Appellant to the Corporate Debtor is clearly an Operational Debt and the Adjudicating Authority committed error in rejecting the claim of the Appellant as an Operational Debt. As noted above, in the present case, the Resolution Plan has already been approved by the Adjudicating Authority on 28.10.2021. The present Appellant has also filed an Appeal Company Appeal (AT) Ins. No. 1092 of 2021 challenging the Order dated 28.10.2021 which Appeal stood withdrawn by the Appellant vide Order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne, 2020, the Resolution Professional informed the Appellant that his claim does not fall under the category of Operational Creditor. The Appellant on 05th June, 2020 filed his claim as an other creditor reserving his right to approach the Adjudicating Authority. The Resolution Professional informed the Appellant that his claim will be considered in the capacity of other Creditor only when Appellant accepts that he is neither Financial Creditor nor the Operational Creditor. I.A. No. 3197 of 2020 was filed by the Appellant before the Adjudicating Authority challenging the rejection of his claim. On 20th January, 2021, Committee of Creditors approved the Resolution Plan submitted by Respondent No. 2. I.A. No. 3197 of 2020 filed by the Appellant was heard on 10th August, 2021 and reserved for Orders. On 04.10.2021, the Adjudicating Authority heard the Application I.A. No. 1139 of 2021 filed by the Resolution Professional for approval of the Resolution Plan and reserved for orders. On 28.10.2021, the Adjudicating Authority allowed the I.A. No. 1139 of 2021 and approved the Resolution Plan filed by the Respondent No. 2. A Company Appeal (AT) Ins. 1092 of 2021 was filed by the Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Appellant to the Corporate Debtor was in pursuance of a contract agreement between the Appellant and the Corporate Debtor. The Corporate Debtor was to carry on the contract work as per the contract agreement. The Contract work could not be completed since site was never made available by the owner. 7. Following are two issues which need to be considered: (i) Whether the mobilization advance given by the Appellant to the Corporate Debtor is a Financial Debt within the meaning of Section 5(8) of the Code; (ii) Whether the mobilization advance given by the Appellant to the Corporate Debtor is an Operational Debt within the meaning of Section 5(21) of the Code. 8. We first take up the claim of the Appellant as a Financial Debt. Financial Debt is defined in Section 5(8) of the Code which is to the following effect: (8) financial debt means a debt along with interest, if any, which is disbursed against the consideration for the time value of money and includes- (a) money borrowed against the payment of interest; (b) any amount raised by acceptance under any acceptance credit facility or its de-materialised equivalent; (c) any amount raised pursuant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -clauses (a) to (h) of sub-section 8 of Section 5 of the Code hence the provisions of Section 5(8) (i) does not lend any support to the Appellant. Learned Counsel for the Appellant has relied on the Judgment of this Tribunal in Company Appeal (AT) Ins. No. 356 of 2022 in the matter of IDBI Trusteeship Services Limited vs Mr. Abhinav Mukherji Ors. . In paragraph 11, this Tribunal laid down following: 11. At the outset, we address ourselves to the first issue raised by the Appellants that the Adjudicating Authority has erroneously relied on the Judgement of the Hon ble Supreme Court in Anuj Jain Case and held that there was no direct disbursal of amount by ECL to the Corporate Debtor and hence the amount involved is not a Financial Debt as defined under Section 5(8) of the Code. This Tribunal is of the considered view that ECL, being the original lender had disbursed the amount in terms of the Facility Agreement entered into and the disbursement of debt is essentially to the Issuer/Borrower and not to the Corporate Guarantor i.e., Palm Developers . By providing Corporate Guarantee, Palm Developers has agreed to incur the debt , if due and payable . A Guarantee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Construction Consortium Limited against the Corporate Debtor. The Appellant in the above case has entered into contract with the corporate debtor for supply of light fittings in a project which was being executed by M/s. Consolidated Construction Consortium Limited with Chennai Metro Rail Limited (CMRL). The Order was placed to the Corporate Debtor on the request of Appellant, advance payment of Rs. 50 Lakhs was made by Chennai Metro Rail Limited (CMRL) to the Corporate Debtor. Subsequently, the contract was cancelled between the Appellant and the Chennai Metro Rail Limited hence the Appellant returned the amount of Rs. 50 Lakhs given to the Corporate Debtor to the Chennai Metro Rail Limited. Subsequently the Appellant demanded back the amount of Rs. 50 Lakhs from the Corporate Debtor which was paid to the corporate debtor by the Chennai Metro Rail Limited on the instructions of the Appellant. The Adjudicating Authority had admitted Section 9 Application which Order was set aside by this Tribunal. The Appellant filed an Appeal in the Hon ble Supreme Court where the Hon ble Supreme Court had occasion to consider the statutory provision of the Insolvency and Bankruptcy Code, 2016 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d notice or an invoice. As such, the presence of an invoice (for having supplied goods or services) is not a sine qua non, since a demand notice can also be issued on the basis of other documents which prove the existence of the debt. This is made even more clear by Regulation 7(2)(b)(i) and (ii) of the CIRP Regulations 2016 which provides an operational creditor, seeking to claim an operational debt in a CIRP, an option between relying on a contract for the supply of goods and services with the corporate debtor or an invoice demanding payment for the goods and services supplied to the corporate debtor. While the latter indicates that the operational creditor should have supplied goods or services to the corporate debtor, the former is broad enough to include all forms of contracts for the supply of goods and services between the operational creditor and corporate debtor, including ones where the operational creditor may have been the receiver of goods or services from the corporate debtor. Finally, the judgment of this Court in Pioneer Urban (supra), in comparing allottees in real estate projects to operational creditors, has noted that the latter do not receive any time value for ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
