Carestream Health India Pvt. Ltd. vs. Seaview Mercantile LLP - NCLAT New Delhi
Carestream Health India Pvt. Ltd. vs. Seaview Mercantile LLP - NCLAT New Delhi
Carestream Health India Pvt. Ltd. vs. Seaview Mercantile LLP - NCLAT New Delhi
Versus
Present:
JUDGMENT
(Hybrid Mode)
Private Limited (“Appellant”) against the order dated 24 March 2023 issued
"Operational Creditor" under the IBC as the claim did not arise from the
2. The facts of the case as relevant to decide the matter are noted herein.
Prejudice" Letter of Intent (WP-LOI) for leasing unit no. 702 in the Silver
The Appellant discovered that the premises were not eligible for
Appellant’s claims and contending the right to forfeit the security deposit due
Mumbai, Bench-V) issued an impugned order holding that the Appellant does
goods nor provided services to the Respondent Corporate Debtor. It also held
that the Appellant also does not meet the criteria of an "Operational Creditor"
under Section 5(20) of the IBC, which specifies it must be the Central
claimed amount does not qualify as 'operational debt' under Section 5(21) of
Intent (WP-LOI) dated 07 May 2019 for unit no. 702 in the Silver Metropolis
Clauses 6 and 25, the licensing mandate granted to Cushman and Wakefield
with Calvin Associates LLP for adjacent premises 701 in the same building
circumstances.
cancelled.
o The security deposit was paid but has not been returned.
o The Appellant was ineligible for the ITES certificate as per the
8. Appellant claims that multiple notices were sent requesting the security
25,68,280/-
per the IBC Code and as per various rulings. The claimed amount qualifies
as 'operational debt' under Section 5(21) of the I & B Code. The Hon'ble
Hitro Energy Solutions Private Limited [2022 (7) SCC 164] has held that
11. Appellant further claims that the Appellate Tribunal in Jaipur Trade
40. Hence, the Licensor's claim for license fees for business premises use
is an 'operational debt' under Section 5(21)."
2021], were cited by the Appellant, which support his case. It also claims that
the ruling on 28 April 2023 regarding the parallel premises in the Calvin
exceeding the disputed claim amount. For the Financial Year 2021-22, the
shares that are freely tradable on the stock exchange, making the proceeds
Bankruptcy Code (IBC) should not be initiated with the intent to recover dues,
financially distressed entities. The provisions of the IBC are designed to revive
the Corporate Debtor rather than serve as a means for debt recovery.
defined in Section 5(21) of the Insolvency and Bankruptcy Code, 2016 (IBC).
The Appellant seeks a refund of a security deposit paid under a Letter of Intent
(LOI), which is a precursor to a leave and licence agreement. This does not
operational debt.
16.2 The LOI at Annexure A3 is dated 7 May 2019, while the LOI at
16.4 The Appellant’s claim that the ITeS requirement was removed is
the title of the premises. Otherwise, the licensor (CD) has the
16.7 The licensee (OC) is liable to pay the Corporate Debtor the license
16.8 The Operational Creditor is also liable for the lost license fee of
17. The building in question is governed by the IT/ITES policy. During the
hearing on 14 July 2021, the Appellant contended that the premises were
unsuitable for IT and ITeS services, despite being qualified for such use. This
was the basis for their claim for a deposit refund. The Respondent argued
that the premises were suitable for IT and ITeS services, and the Appellant’s
inability to obtain certification was their own default. This was recorded in
16 February 2022, the Appellant admitted they did not pursue certification
order.
18. On 8 March 2020, the Respondent had inducted M/s Reliance Nippon
CASE LAW
19. As per the Hon'ble Supreme Court in Mobilox Innovations Pvt. Ltd.
v. Kirusa Software Ltd., Civil Appeal No. 9405 of 2017, a Section 9 IBC
evidence.
v. Hitro Energy Solutions Pvt. Ltd., (2022) 7 SCC 164, clarified that the
those who receive goods or services from the corporate debtor. However, the
Appellant neither supplied goods nor received services from the Corporate
Training Pvt. Ltd (supra) case is relevant for claims toward unpaid license
fees for immovable property as operational debt under the IBC. It does not
fee. In this case, no GST was payable or paid on the security deposit, and the
deposit was not an advance license fee. The security deposit was for ensuring
the Appellant entered into a license agreement and became liable to forfeiture
due to non-performance.
Appraisal:
23. Heard the counsels of both sides and perused the documents placed
before us.
24. The main issues before us are whether the claimed amount qualifies as
an operational debt under the IBC and whether there exists a pre-existing
arising under any law for the time being in force. The section is extracted as
below:
“5. Definitions. –
In this Part, unless the context otherwise requires, –
XXX
(21) “operational debt” means a claim in respect of the provision of goods
or services including employment or a debt in respect of the 2[payment] of
26. The Appellant's claim for the refund of a security deposit under the LOI
Therefore, the claim does not constitute an operational debt under the IBC.
Section 5(21) of the IBC. This definition specifies a claim arising from the
future license agreement, the security deposit itself was not directly linked to
28. We also look into the judicial precedent as cited by the Appellant in
Solutions Pvt. Ltd. [supra]. This judgement is only an authority for the
includes not only those who supply goods or services to corporate debtor but
those who receive goods or services from the corporate debtor and the words
“in respect of” must therefore not received a narrow interpretation but the
claim must bear some nexus with the provision of goods or services. In the
present case the Appellant has neither supplied goods nor services to the
Corporate Debtor nor received goods or services from the Corporate Debtor.
Jet Airways Training Pvt. Ltd. (supra) which is now being seen for its
Bankruptcy Code, 2016 (Code). It doesn’t support the cause of the Appellant
that security deposit is a form of license fee available for adjustment on failure
termed as a form of license fee available for adjustment on failure to meet the
outstanding licence fee. In any case, this judgement does not lay down any
law that security deposit is a form of license fee. The said judgement proceeds
on the basis that payment of GST was made on the license fee and as GST is
only contemplated for goods and services, there were services rendered which
would fall within the meaning of Section 5 subsection 21 of IBC. In the present
case, no GST was payable or has been paid on the security deposit. In the
present case, the security deposit was not an advance licence fee but
agreement. The same was not liable to be adjusted against any outstanding
or future license fee. No services were rendered nor supplied either by the
into a leave and licence agreement. Thus, this is not a case of supply of goods
or services.
under the IBC does not encompass situations like security deposits
operational debt as claimed by the Appellant, the petition could not have been
on these provisions.
of the LOI (Term sheet in Annexure A3 or A5) was the final and
an earlier version.
that only if the licensee (OC) found a defect in the title of the
interest whereas if the licensee (OC) chose not to enter into the
leave and licence agreement for any other reason other than a
defect in title, the licensor (CD) would have the right to forfeit the
the appropriate recourse when a bona fide dispute exists. The Hon'ble Apex
Court has clarified that all that the Adjudicating Authority is to assess is
28. Termination of LOI The Licensee may terminate this LOI, if the Licensee finds a defect in the
title relating to the Premises (the Licensee has to carry out their due
diligence within 30 working days from the date of signing off this term-
sheet/LOI), and the Security Deposit paid on the signing of this term-
sheet/LOI shall be refunded without any interest to the Licensee by the
Licensor.
The parties also agree that, in case the Licensee chooses not to enter
into the Leave & License agreement for any reasons other than
mentioned above, the Licensor shall have the right to forfeit the security
deposit paid on this LOI.
that the dispute is not patently feeble legal argument or an assertion of fact
application.
clear that a pre-existing dispute exists. This aligns with the Supreme Court's
[supra], where it was held that if a dispute exists and requires further
37. The facts of each case are different and the case cited by the Appellant
proceeding taken up by the Appellant with Calvin Associates LLP for adjacent
premises 701 in the same building for which Section 9 proceedings (CP (IB)
Conclusion:
the IBC as it does not arise from the provision of goods or services.
maintainable.
dated 24 March 2023, is upheld. The Parties shall bear their respective costs
of this appeal.
[Arun Baroka]
Member (Technical)
New Delhi
27th May, 2024
pks