Operational Debt under IBC not made out in a joint development revenue-sharing arrangement, so section 9 petition was not maintainable.

A section 9 insolvency petition was held not maintainable where the parties' arrangement was a joint development venture with reciprocal obligations, not a service contract giving rise to an operational debt. The landowner contributed land and the developer undertook construction, approvals, marketing and sale, while the agreement provided for sharing of sale proceeds, unsold stock and ancillary receipts. The claimed amounts arose from project accounts and contractual revenue-sharing mechanisms, which did not constitute dues for goods, services or other operational liabilities under sections 5(20) and 5(21) of the Insolvency and Bankruptcy Code. The arbitration clause and the contractual structure further showed an inter se business liability dispute under the joint venture framework.

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Issues: Whether a petition under section 9 of the Insolvency and Bankruptcy Code, 2016 was maintainable on the basis of a joint development arrangement and revenue-sharing claims, so as to constitute an operational debt owed by the corporate debtor.

Analysis: The arrangement between the parties was found to be a joint development venture in which both sides had defined reciprocal obligations, with the landowner contributing land and the developer undertaking construction, approvals, marketing, and sale. The agreement provided for sharing of sale proceeds, unsold stock, and even certain ancillary receipts, showing that the relationship was not one of service provider and operational creditor but one of joint venture partners. The amounts claimed arose from ongoing project accounts and contractual sharing mechanisms rather than from a debt in respect of goods, services, or other operational dues within the meaning of sections 5(20) and 5(21). The existence of an arbitration clause and the contractual structure reinforced that the dispute was essentially a business liability dispute under the joint venture framework.

Conclusion: The petition under section 9 was not maintainable because no operational debt was shown, and the claim was only an inter se liability under the joint development arrangement.

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