Tribunal overturns order, dismisses time-barred application under Section 7. Refund directed, IRP fees addressed.

The Tribunal allowed the Appeal, setting aside the Adjudicating Authority's order. The Application under Section 7 was dismissed as time-barred, with the right to sue accruing after 180 days and 36 months from the MoU. The Tribunal directed the refund of deposited amounts to Respondent No.1 and addressed the IRP's fees and expenses.

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Issues Involved:
1. Whether the Application filed by Respondent No.1 on 06.11.2020 was within the period of limitation as prescribed under Article 137 of the Limitation Act, 1963.
2. Whether exercising the option to void the MoU dated 25.01.2013 on 07.03.2020 was in accordance with law.
3. Whether the transaction under the MoU dated 25.01.2013 is a financial transaction within the meaning of Section 5(8) of the Insolvency and Bankruptcy Code, 2016.
4. Whether the transaction under MoU pertained to sale and purchase of real estate property with the motive of profit is in the nature of 'financial debt' within the meaning of Section 5(8) of the Code.
5. Whether the Application filed under Section 7 by Respondent No.1 is for the claim of damage under the MoU and not for the claim of any financial debt.

Detailed Analysis:

Issue 1: Limitation Period for Filing Application
The primary question was whether the Application under Section 7 filed by Respondent No.1 was barred by time. The MoU dated 25.01.2013 stipulated that if the First Party failed to launch the scheme within 180 days, it would be liable for default. The agreement was to continue for 36 months. The cause of action for the Second Party arose after 180 days and further after 36 months if the possession was not handed over. The Respondent No.1 claimed that the cause of action arose after exercising the option on 07.03.2020. However, the Tribunal held that the right to sue arose after 180 days and further after 36 months, making the Application filed on 06.11.2020 barred by time.

Issue 2: Exercising the Option to Void the MoU
The Tribunal examined whether the option to void the MoU exercised on 07.03.2020 was valid. It was held that the right to exercise the option arose after 180 days and also after 36 months. The exercise of the option after seven years from the MoU was unsustainable. The Tribunal concluded that the right to sue accrued to Respondent No.1 after 180 days and further after 36 months, and the exercise of the option on 07.03.2020 was not valid.

Issue 3: Financial Transaction under Section 5(8) of the Code
The Tribunal did not find it necessary to consider whether the transaction under the MoU dated 25.01.2013 was a financial transaction within the meaning of Section 5(8) of the Code, as the Application was already found to be barred by time.

Issue 4: Nature of 'Financial Debt'
Similarly, the Tribunal did not delve into whether the transaction under the MoU pertained to the sale and purchase of real estate property with the motive of profit was in the nature of 'financial debt' within the meaning of Section 5(8) of the Code, given the finding on the limitation issue.

Issue 5: Claim for Damages vs. Financial Debt
The Tribunal did not address whether the Application filed under Section 7 was for the claim of damages under the MoU and not for the claim of any financial debt, due to the conclusion on the limitation period.

Conclusion:
The Tribunal allowed the Appeal, setting aside the order dated 04.05.2022 passed by the Adjudicating Authority. The Application filed under Section 7 of the Code was dismissed as being barred by time. The Tribunal also directed the amount deposited under the Tribunal's orders to be refunded to Respondent No.1 and addressed the fees and expenses of the Interim Resolution Professional (IRP).

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