TaxTMI 
TaxTMI 
2017 (11) TMI 240
X X X X Extracts X X X X
X X X X Extracts X X X X
.... is also represented by the Operational Creditor that in addition to the second and third floors of the above property again by virtue of lease dated 1.9.2009, the first floor of the said building was also taken on lease from the Corporate Debtor. The amounts paid under the aforesaid lease deeds it is represented was given as refundable security deposit of lease and to be of Rs. 1,00,79,750/- and Rs. 59,43,840/- respectively. Operational Creditor represents that in relation to lease deed dated 13.5.2009, the lease of the demised premises was terminated vide letter dated 20.1.2012 and in relation to the premises under lease deed dated 1.09.2009, by virtue of efflux of time, the lease got determined on 30.9.2012 and in the circumstances due to the termination of lease as narrated above, the Corporate Debtor is liable to refund the sums paid as security deposit given at the time of entering into the respective leases by the Operational Creditor. 2. Subsequent to the termination of the lease, the Operational Creditor avers that since 2012 it has repeatedly been approaching the Corporate Debtor to refund the security deposit however, without much avail. On 22.7.2014 finally the parties....
X X X X Extracts X X X X
X X X X Extracts X X X X
....itor has been forced to file the above Petition as narrated earlier for invoking the provisions of IBC, 2016 and for initiating CIRP against the Corporate Debtor. 4. From the order sheet file it is seen that on 10.7.2017 this Tribunal had granted time to the Petitioner to rectify any defects within the stipulated period of 7 days as mandated under the provisions of Section 9 of IBC,2016. On 20.7.2017, it is seen that the Corporate Debtor has entered appearance through its Counsel and an opportunity was granted to the Corporate Debtor to file its reply which has also been filed and the matter was finally taken up for disposal subsequent to the completion of pleadings on 8.8.2017. Perusal of the reply as filed by the Corporate Debtor shows that the following grounds have been taken to challenge the maintainability of the Petition: (i) The amount claimed to be in default by the Operational Creditor does not fall within the purview of operational debt as defined under Section 5(21) of IBC,2016. (ii) Since the amount claimed in itself cannot be categorized as "Operational Debt", the applicant / petitioner cannot claim itself to be an "Operational Creditor within the meaning of Sect....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y satisfying the term 'service' as found in the definition of 'Operational Debt" under Section 5(21) of IBC,2016. Ld. Counsel for the Petitioner has also placed reliance on the report of the Bankruptcy Law Reforms Committee as presented to the Govt, of India particularly at paragraph 5.2.1, which is extracted for ready reference as below: Here, the Code differentiates between financial creditors and operational creditors. Financial creditors are those whose relationship with the entity is pure financial contract, such as a loan or a debt security. Operational creditors are those whose liability from the entity comes from transaction on operations. Thus, the wholesale vendor of spare parts whose spark plugs are kept in inventory by the car mechanic and who gets paid only after the spark plugs are sold is an operational creditor. Similarly, the lessor that the entity rents out space from is an operational creditor to whom the entity owes monthly rent on a three year lease, The Code also provides for cases where a creditor has both a solely financial transaction as well as an operational transaction with the entity. In such a case, the creditor can be considered a financ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....should be capable of being treated as a 'debt' as defined under section 3(11) of IBC,2016 and finally the 'debt' should fall within the confines of Section 5(21) of IBC,2016 (i.e.) it should be capable of being treated as an 'Operational Debt' and such an operational debt must be owed by the Corporate Debtor to a creditor who can then be considered as an Operational Creditor as defined under Section 5(20) of IBC,2016. 10. Further, as recently as 28.9.2017 this Tribunal in the matter of Divine Infracon (P.) Ltd. in IB-209/ND/2017 has held after a detailed discussion that in relation to transaction of immovable property the same cannot be considered as a transaction falling under the term 'operation' and 'Operational Debt' unless such a transaction having a correlation of direct input to the output produced or supplied by the Corporate Debtor and hence we do not have any hesitation looking at any way in holding that the petitioner will not fall under the definition of Operational Creditor and the claim which is sought to be made can not be considered as an Operational Debt. 11. Further, from the records it is also seen that by sending the not....