Landowner sharing profits not 'Financial Creditor' under Insolvency Code. CIRP closure justified. Appeal dismissed.

The Tribunal concluded that the landowner, intending to share profits from a venture via an MoU, did not qualify as a 'Financial Creditor' under the Insolvency and Bankruptcy Code. Additionally, the closure of Corporate Insolvency Resolution Process (CIRP) proceedings was deemed justified as the Corporate Debtor settled with the Operational Creditor, and the sole member of the Committee of Creditors was not a 'Financial Creditor'. The Tribunal dismissed the appeal without costs, finding no fault in the Adjudicating Authority's decision.

---

---

Issues Involved:
1. Whether a landowner intending to share profits from an agreed venture via an MoU falls within the definition of 'Financial Creditor' under Section 5 of the Insolvency and Bankruptcy Code (IBC).
2. Whether the Adjudicating Authority can close CIRP proceedings if the Corporate Debtor settles with the Operational Creditor and the sole member of the CoC does not qualify as a 'Financial Creditor' under the Code.

Issue-wise Detailed Analysis:

1. Definition of 'Financial Creditor':
The main issue was whether a landowner intending to share profits from an agreed venture via an MoU falls within the definition of 'Financial Creditor' under Section 5 of the IBC. The Tribunal examined the nature of the relationship between the appellant and the Corporate Debtor, emphasizing the terms of the MoU dated 26/05/2014. The MoU indicated that the appellant was entitled to 25% of the net profit from the project and held a 25% ownership share in the project 'Coconut'. The Tribunal noted that the amount given by the appellant was for financing the project, in which the appellant was a partner and involved in profit sharing, thus constituting a significant part of the ownership share. The Tribunal concluded that the appellant's investment in the land could not be construed as 'Financial Debt' under Section 5(8) of the Code, as it was not a sum owed, assigned, or transferred in compliance with the provisions of Section 5(8). Therefore, the status of the appellant as a 'Financial Creditor' was not upheld.

2. Closure of CIRP Proceedings:
The Tribunal considered whether the Adjudicating Authority could close CIRP proceedings if the Corporate Debtor settled with the Operational Creditor and the sole member of the CoC did not qualify as a 'Financial Creditor'. The Tribunal observed that the Corporate Debtor had settled the claims of the Operational Creditor under Section 12-A of the Code, and the sole member of the CoC was the appellant, who was not a 'Financial Creditor'. The Tribunal also noted that no other claimants had come forward following the public announcement. Consequently, the Tribunal found no illegality or infirmity in the Adjudicating Authority's decision to close the CIRP proceedings against the Corporate Debtor.

Conclusion:
The Tribunal upheld the Adjudicating Authority's decision, concluding that the appellant did not qualify as a 'Financial Creditor' under the IBC and that the closure of CIRP proceedings was justified given the settlement with the Operational Creditor and the absence of other claimants. The appeal was dismissed, and no costs were imposed. The Tribunal also noted that there were no adverse observations against the third respondent (IRP) warranting any action.

---