JDA entered into, is a contract of reciprocal rights and obligations, both parties are admittedly Joint Development Partners, who entered into a consortium of sorts for developing an Integrated Township & for any breach of terms of contract, Section 7 Application is not maintainable as the amount cannot be construed as ‘Financial Debt’ as defined under Section 5(8) of the Code – M/s. Vipul Limited Vs. M/s. Solitaire Buildmart Pvt. Ltd. – NCLAT New Delhi
NCLAT held that to reiterate, the Applicant had issued notice to the Respondent under Section 8, terming it as an ‘Operational debt’. Be that as it may, this Application seeking initiation of CIRP by one partner of JDA against the other, only jeopardizes the interests of the allottees. Apart from the fact that the Joint Development Agreement entered into, is a contract of reciprocal rights and obligations, both parties are admittedly ‘Joint Development Partners’, who entered into a consortium of sorts for developing an Integrated Township and for any breach of terms of contract, Section 7 Application is not maintainable as the amount cannot be construed as ‘Financial Debt’ as defined under Section 5(8) of the Code. Therefore, we are of the considered view that the Appellant cannot be termed to be a ‘Financial Creditor’ as envisaged under Section 5(7) of the IBC, 2016.
