TaxTMI 
TaxTMI 
2021 (2) TMI 305
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....dertaken several projects of large magnitude in Mumbai. 3. The Corporate Debtor is the owner of the property bearing CTS No. 124 and admeasuring 2463.23 sq. mts. at M. S. Ali Road, Grand Road, East, Tardeo Division, Mumbai- 400007 along with the building known as Novelty Talkies. The said Land and the said Building shall be collectively referred to as "the said property". Facts of the case: 4. The Corporate Debtor approached the Petitioner and requested the services of the Petitioner with regard to the redevelopment of the said property. Both the parties executed the Term Sheet dated 02.08.2018, thereby appointing and engaging the Petitioner as a Project Manager for performing services in relation to the said property in the manner set out therein. The terms and the conditions as entailed in the term sheet obligated the Petitioner to pay an amount of Rs. 2.51 crores as an advance towards aforesaid transactions. The exit option also clearly stipulated that in the event of failure to execute the Development Management Agreement between the parties, the said Term Sheet will stand automatically terminated subject to the Corporate Debtor repaying the advance amount along with t....
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....te Debtor in its draft Deed of Cancellation admitted his liability to pay the aforesaid amount, though the draft of Deed of Cancellation was never executed. The Petitioner vide email dated 08.08.2019 shared the revised draft of Deed of Cancellation with the Corporate Debtor. The Petitioner further issued another Letter of Reminder on 12.08.2019 to the Corporate Debtor seeking refund of the money paid. The Corporate Debtor failed to pay the said amounts and demand notice was issued under Section 8 seeking a recovery of Rs. 3,05,95,868/- inclusive of interest from 03.10.2018. 10. The Corporate Debtor replied to the above said demand notice on 13.09.2019 and sought to wriggle out of their obligation under their Term Sheet. The Corporate Debtor also raised the defense that the Petitioner does not fall under the definition of the Operational Creditor. The Corporate Debtor also alleged that due to breach of Term Sheet, they incurred certain damages and hence, there is serious bonafied dispute between the parties. Reply of the Corporate Debtor to the Petition: 11. The Corporate Debtor filed his Reply and sought for rejection of the Petition on the following grounds: a. I....
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....ment and is not a concluded agreement between the parties. Also, the Petitioner has not provided any goods or services to the Corporate Debtor to claim relief under Section 9 of the Code. d. Though the Term Sheet is an instrument chargeable with stamp duty, the parties had not paid stamp duty on the Term Sheet. e. The Petitioner is liable to compensate the Corporate Debtor for the losses caused to the Corporate Debtor due to the Petitioner's unilateral and wrongful termination of Term Sheet. The Corporate Debtor vide its Dispute Notice dated 13.09.2019 have reiterated that they were relying on the financial support that was being accorded/ granted to the Petitioner in terms and pursuant to the Term Sheet to repay several outstanding facilities availed by the Corporate Debtor from financial institutions. Due to the Petitioner's unilateral and sudden conduct of the termination of Term Sheet, the Corporate Debtor has suffered heavy financial losses including its compliances qua the consent terms filed before the Hon'ble Bombay High Court. The Corporate Debtor also mentions that the Corporate Debtor has paid an amount of Rs. 50 lacs to Mr. Jignesh Hirani, ....
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....hence the parties mutually decided to call off the transactions. 13. Written Submissions of the Petitioner: a. The Term Sheet came to be executed between the parties on 02.08.2018 under the Term Sheet. The Petitioner being the Project Manager was to perform services in relation to the project including but not limited to arranging finances for the project and short fall funding. The Petitioner was to receive a payment of profit share of 15 to 20 % from the total receivables from the project. b. The Petitioner paid an amount of Rs. 2.51 cores as per the Clause 13 of the Term Sheet and further in view of the termination of the terms, the Corporate Debtor was liable to refund the money along with interest @ 15 % p.a. within 60 days and @ 24 % p.a. after 60 days. c. The Petitioner relied upon Clauses 13, 15 and 17 of the Term Sheet and the correspondences vide trail mails between the parties and their counsels. d. The Deed of Cancellation as circulated by the Corporate Debtor itself shows that is admission of liability of payment of refund of monies. 14. Written Submissions of the Corporate Debtor: a. The Corporate Debtor claims that t....
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....l decisions relating to the said project for the benefit of the Project, in consultation with the Owner. These decisions include but are not limited to Planning, Finance and Project Costs, Construction, Sales & Marketing, Branding, Administration Etc." b. The scope of the services of the Project Manager is also defined under Clause 7. The receivables and Development Management Agreement fees was captured at Clause 8 of the Term Sheet. c. The obligation/ representation of the Corporate Debtor was also captured in the Clause 9 of the Term Sheet. The Clause 12 envisaged that the Petitioner shall facilitate in arranging such funding required for the said project. Clause 13 of the Term Sheet further required that an amount of Rs. 2.51 crores shall be paid by the Petitioner to the Corporate Debtor at the time of signing this Term Sheet as token amount and further that upon termination of the Term Sheet the Corporate Debtor is liable to pay interest at the token amount of 15 % p.a. in case of termination within 60 days of signing of the Term Sheet @ 24 % p.a. in case of signing after 60 days. Clause 13 is as follows: "Token amount- A sum of Rs. 2.51 crores shall....
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....r a debt in respect of the [payment] of dues arising under any law for the time being in force and payable to the Central Government, any State Government or any local authority." h. The amount of Rs. 2.51 crores of token amount as paid to the Corporate Debtor is part of the service rendered by the Petitioner to the Corporate Debtor. The Term Sheet envisaged the execution of Development Management Agreement between the parties on or before expiry of 2 months from the date of signing of the Term Sheet. i. The correspondences and the trail of emails exchanged between the parties goes to show that the critical terms of the Development Management Agreement were not agreed upon and there was no consensus ad-idem between the parties and hence, the failure of execution of Development Management Agreement triggered termination of the Term Sheet automatically under Clause 17 by the end of the term. j. The said Term Sheet was not extended as agreed by mutual consent in writing. The conduct of parties by the way of correspondences or by the exchange of trail of emails between the parties cannot tantamount and deem extension of binding Term Sheet between the parties.....
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....lates the obligation of the Petitioner to pay the money to the Corporate Debtor at the time of execution of the Term Sheet and hence, the liability of refund of such monies paid is well defined in the case of termination of the Term Sheet. Therefore, the Corporate Debtor is liable to refund the token amount to the Petitioner which is part of the services provided to the Corporate Debtor. 18. This Bench is of the considered that this is the fit case of the admission in view of the above findings. 19. The Petition filed by the Operational Creditor is on proper Form 5, as prescribed under the Adjudicating Authority Rules and is complete. 20. The Petition under sub-section (2) of Section 9 of I&B Code, 2016 filed by the Operational Creditor for initiation of CIRP in prescribed Form 5, as per the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 is complete. The existing operational debt beyond the threshold limit against the Corporate Debtor and its default is also proved. Accordingly, the Petition filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 for initiation of corporate insolvency resolution process against the Corporate Debtor ....