Transaction not financial debt under Insolvency & Bankruptcy Code 2016; Petition rejected. Seek redressal elsewhere.

The Tribunal held that the transaction did not qualify as a financial debt under the Insolvency and Bankruptcy Code 2016, rejecting the petition for Insolvency Resolution Process against the Respondents. The Petitioner was directed to seek redressal through an appropriate forum without prejudice to their rights, with no costs awarded in the judgment.

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Issues:
Prayer for Insolvency Resolution Process against Respondents under Insolvency and Bankruptcy Code 2016 based on financial debt claim.

Analysis:
The petitioner claimed to be a financial creditor seeking &8377; 30,69,000 from the Corporate Debtor, arising from an initial transaction with M/s Maruti Realtors Pvt. Ltd. The petitioner agreed to an IT commercial complex by the Corporate Debtor in lieu of the failed residential project by M/s Maruti Realtors. An agreement in 2008 detailed the financial creditor's contribution and assured returns. A subsequent settlement agreement in 2014 finalized the claim at &8377; 30,69,000, with interest provisions. The petitioner argued to be a financial creditor based on post-dated cheques, TDS deductions, and dishonored cheques under the Negotiable Instrument Act.

The financial creditor contended that the dispute was referred to arbitration per the agreement, but the Corporate Debtor denied any arbitration agreement. The respondent contested the claim, stating excess payment made and filing a FIR against the petitioner. The Tribunal noted the evolving agreements and novation of contracts, emphasizing the complexity of the transaction. Referring to a previous case, the Tribunal clarified that liability towards assured returns for booking commercial flats does not constitute a financial debt under the Code. The Tribunal concluded that the transaction did not meet the definition of a financial debt for initiating insolvency proceedings.

The Tribunal held that the transaction did not qualify as a financial debt, thus rejecting the petition. The petitioner was allowed to seek redressal through an appropriate forum without prejudice to their rights. No costs were awarded in the judgment.

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