Unpaid instalment as per the settlement agreement cannot be treated as operational debt as per section 5(21) of Code, The failure or breach of settlement agreement cannot be a ground to trigger CIRP against Corporate Debtor – M/s Omega Elevators Vs. Prajay Properties Private Limited – NCLT Hyderabad Bench
NCLT held that default in payment of instalments according to Agreement to Pay in question entered into between the parties does not come within the definition of operational debt. Besides, there was pre-existing dispute on the issue of `maintenance of lifts’ between the parties as seen from the email communications of the users of elevators. Simultaneously, parallel proceedings have been initiated for dishonour of cheques under section 138 of the Negotiable Instruments Act. All the above prove that this Tribunal has no jurisdiction to entertain this petition under section 9 of the I86B Code, 2016. We are, therefore, not inclined to admit the petition. In view of the above the petition is hereby rejected.(p7-10)