CIRP Application Rejected: Meeting Minutes Don't Prove Financial Debt; Arbitration Clause in Contract Overrules IBC Proceedings.

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....Rejection of application for initiation of CIRP - The mere fact that the Corporate Debtor has admitted liability to make payment in its minutes of meeting does not change the character of the transaction into a financial debt. In Clause 18 of the contract contains arbitration clause, for settling amicably by mutual consultation and thereafter approaching the arbitration as per Arbitration & Conciliation Act, 1996. The Appellant ought to have taken recourse to Clause 18 of the Sub-Contract Agreement dated 07.03.2017 and these issues could not have been decided in IBC proceedings. The Adjudicating Authority has rightly held that it was not financial debt and rejected Section 7 Application. - AT....