TMI Blog2022 (9) TMI 565X X X X Extracts X X X X X X X X Extracts X X X X ..... t no lease deed was executing afterward hence the said LOI did not fructify into the lease deed. The applicant herein deposited an amount of Rs. 1.2 crore as earnest money, according to the LOI dated 30.07.2015. This Tribunal makes it abundantly clear that Hon'ble NCLAT in SPICEJET LTD. VERSUS AFFORDABLE INFRASTRUCTURE AND HOUSING PROJECTS PVT. LTD. [ 2020 (2) TMI 1506 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, DELHI] does not bar any right of the parties and it is open to the respective parties to raise all factual and legal pleas before the Competent Authority/Adjudicating Authority when the necessary Application seeking appropriate relief is filed by the concerned party and further that said Authority' shall determine the said Application on merits, of course, after providing due opportunities to the contesting parties to air their the views, by adhering to the Principles of Natural Justice. Hon'ble Supreme Court of India in the matter of M/S CONSOLIDATED CONSTRUCTION CONSORTIUM LIMITED VERSUS M/S HITRO ENERGY SOLUTIONS PRIVATE LIMITED [ 2022 (2) TMI 254 - SUPREME COURT] , clearly laid down that if any advance payment has been made for providing goods and serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation on behalf of the applicant for initiation of insolvency resolution process against the respondent corporate debtor. 3. The Respondent Company M/s. Affordable Infrastructure And Housing Projects Private Limited, against whom the Insolvency Resolution Process has been prayed form, is a company incorporated under the provisions of the Companies Act, 1956 and having its registered office at 227, Square One, Saket District Centre Saket, New Delhi - 110017. Since the registered office of the respondent corporate debtor is in New Delhi, this Tribunal having territorial jurisdiction over the NCT of Delhi is the Adjudicating Authority in relation to the prayer for initiation of Corporate Insolvency Resolution Process in respect of respondent corporate debtor under sub-section (1) of Section 60 of the Code. 4. The case of the Financial Creditor precisely is that: i. The Corporate Debtor approached the Financial Creditor proposing to offer a fully furnished and designed property at No. 249G, Phase-IV, Udyog Vihar, Phase-IV, Gurgaon, Haryana-122016, as per Financial Creditor's specifications. ii. After deliberations, both the parties entered into a Letter of Intent on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 1,20,00,000/- can be equated towards three months of lease rent. ix. The Financial Creditor filed CP No. (IB) 1387 (ND)/2018 in Form 5 of the Insolvency Bankruptcy Code (Application to Adjudication Authority) Rules, 2016 in terms of Section 9 of the Insolvency and Bankruptcy Code, 2016 read with rule 6 of the Insolvency and Bankruptcy Code (Application to Adjudication Authority) Rules, 2016 before this Tribunal to initiate Corporate Insolvency Resolution against Corporate Debtor and vide Order dated 21.05.2019, the Adjudicating Authority dismissed the CP No. (IB)-1387 (ND)/2018 filed under Section 9 of the Code on the ground that the amount claimed by the Financial Creditor herein was not an Operational Debt. x. Being aggrieved by the Order dated 21.05.2019 the Petitioner filed Company Appeal (AT) (Ins.) No. 746 of 2019 and vide Order dated 24.07.2019 the Hon'ble Appellate Tribunal granted liberty to the Financial Creditor for addressing on the issue of Applicant being a Financial Creditor instead of Operational Creditor. 5. The Corporate Debtor has filed its reply which is listed here:- i. The Applicant went on in an appeal after the application under Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Applicant was under the obligation to execute a lease deed within 30 days from signing of the LOI Thus, the Applicant was under an obligation to execute a lease deed with the Respondent latest by 31 August 2015. However, the Applicant failed to fulfil its primary obligation in terms of the LOI, which was a condition precedent. Further, the Applicant was under an obligation as per Clause 20 of the LOI to enter into good faith discussion for lease documentation and execution of definitive lease agreement. vi. It is also pleaded that the Respondent in furtherance of its contractual obligations under the LOI had executed a Memorandum of Understanding dated 15 June 2015 with M/s. Jan Sewa Trust in respect of the leased premises for the purposes of sub-letting the same to the Applicant. The Respondent, for the said purpose, also processed a sum of INR 18,88,000/- towards payment of stamp duty for the purposes of execution of the aforesaid lease deed between M/s. Jan Sewa Trust and the Respondent. vii. Further, the Respondent also processed a sum of 63,00,000/- towards security deposit for leasing out the premises to M/s. Jan Sewa Trust in furtherance to its obligations un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Precedent were to be satisfied on or prior to 31.08.2015. It is the conduct of the parties read with addendum dated 07.09.2015, which establishes that the parties to the present dispute agreed on increasing the time limit for performance of Conditions Precedent till 21.09.2015. Accordingly, the filing of the application is within limit. iii. It is further submitted that the Financial Creditor had withdrawn its Appeal before the Tribunal with a leave to file a fresh application. Vide its Order dated 03.11.2020, the Tribunal has made a specific observation for determination of the matter on merits. It is further submitted that the Corporate Debtor has itself admitted to the existence of financial arrangement between the parties as 'contractual obligations' thus, cannot now deny the existence of a financial debt. iv. The Corporate Debtor has not denied the debt and transaction of Rs. 1,20,00,000. Financial Creditor/Applicant cannot be precluded from approaching this Tribunal on the basis of mere nomenclature of financial debt as IFSD which is being employed by the Corporate Debtor to mislead and deceive this Tribunal, when the existence of the debt is not even in dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is pertinent to mention that in spite of there being no provision for forfeiture of any amount, the Corporate Debtor believes it was entitled to forfeit the amount of Financial Creditor. But on the other hand, in spite of there being an unambiguous provision for refund, Corporate Debtor refuses to acknowledge the same. The Corporate Debtor cannot add to the LOI as per its wish and skip the actual provisions as per its own convenience to mislead and deceive this Hon'ble Tribunal. xi. It is submitted that there exists nothing on record which shows, that the advance payment made by the Financial Creditor was in the nature of security deposit. Moreover, admittedly Clause 21 of LOI establishes that the nature of payment made has a commercial effect of borrowing, as the same was supposed to be promptly refunded on account of non-performance of conditions precedent. The amount paid by the Financial Creditor is not IFSD as per clause 7 of the LOI. The following points are to be taken into consideration for establishing, that the money paid was not IFSD but advance borrowed by the Corporate Debtor, that was to be promptly refunded under Clause 21 of the LOI on non- performance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e respondent qua lease of place situated in Block No. 249-G Udyog Vihar, Gurgaon i.e. entire building comprising three basements plus ground plus three floors for lump sum value of Rs. 48.00 lacs per month including Rs. 8.00 lacs towards maintenance charges on rent. In response to that the applicant herein had to deposit six months' rent on which part deposit equivalent three months' rent payable within seven days of the signing of the Letter of Intent and the post clearance of the Legal Due Diligence (LDD). Though, it is being stated by the Ld. Counsel for the applicant herein that Addendum passed, to LOI dated 31.07.2015 on 07.09.2015 at Gurgaon, whereby certain alteration and refurbishment was to be there and the validity of the LOI was extended upto 21.09.2015. However, the said agreement was only signed by Spice Jet Ltd. and not by Lessor i.e. respondent herein. It is admitted that a sum of Rs. 1.2 crore were extended as per LOI dated 30.07.2015 and the lease was to be executed by the parties accordingly in view of the above said LOI. But no lease deed was executing afterward hence the said LOI did not fructify into the lease deed. The applicant herein deposited an amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pointing out that the dismissal order of main Company Appeal (AT) (Ins.) No. 746 of 2019 dated 18.02.2020 'as withdrawn' will not in any way preclude the Applicant/Appellant to approach Competent Authority/Adjudicating Authority in seeking redressal of its grievance, by filing necessary application, of course, in accordance with law and in manner known to Law if it so desires/advised. 12. Before parting with the case, this Tribunal makes it abundantly clear that according to our view the order of Hon'ble NCLAT (supra) does not bar any right of the parties and it is open to the respective parties to raise all factual and legal pleas before the 'Competent Authority'/Adjudicating Authority' when the necessary 'Application seeking appropriate relief is filed by the concerned party and further that said Authority' shall determine the said Application' on merits, of course, after providing due opportunities to the contesting parties to air their the views, by adhering to the Principles of Natural Justice. Accordingly, the said Interlocutory Application IA No. No. 1135 of 2020 was disposed of by Hon'ble NCLAT vide order dated 18.02.2020. 13. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 SCC Online NCLAT 377, but the same have no bearing in the present matter, in view of the law laid down by Hon'ble Supreme Court of India in the matter of M/s. Consolidated Construction Consortium Limited (supra), as a less Hon'ble NCLAT in Ashimara Housing (supra). 16. Although, on behalf of the applicant, earlier a petition under Section 9 of Code was filed, but the same was dismissed by this Tribunal vide order dated 21.05.2019. The said order was challenged before the Hon'ble NCLAT, but later on the said appeal was withdrawn voluntarily. Hence, the said order has attained finality. Moreover, after passing the said order, one application was filed on behalf of the applicant herein for clarification the order dated 18.02.2020. Accordingly, Hon'ble NCLAT vide order dated 03.11.2020 granted liberty to the applicant herein to approach Adjudicating Authority. However, after passing the aforesaid judgement by Hon'ble Supreme Court of India, the present petition under Section 7 of the Code qua the advance payment for the goods and services is not maintainable as the said advance payment does not come under the purview of definition 'Financial Debt' rat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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