Draft MOU: No Proof of Joint Venture vs. Corporate Debtor Relationship

Arunkumar Jayantilal Muchhala Vs Awaita Properties Pvt. Ltd. (NCLAT Delhi)

From the said material placed on record, it is clear that the alleged MOU entered between SKIL and the Corporate Debtor was merely a draft MOU and there is nothing to evidence that the same was signed, executed or acted upon between them. In any case, prima facie, there is nothing to show that the Respondent No. 1 was a party or signatory to the said MOU or remotely connected to this MOU. We also cannot choose to ignore that at no point of time has Respondent No. 1 admitted any knowledge of the MOU, leave alone being an active participant therein. Furthermore, the Respondent No. 1 and SKIL being clearly separate legal entities, any MOU purportedly signed between SKIL and Corporate Debtor cannot be held to be binding in any manner on Respondent No. 1. Thus, a draft MOU which does not hold the field cannot be relied upon to substantiate that the relationship between the Appellant and the Respondent No. 1 was that of a joint venture collaborator and not that of a Corporate Debtor and financial creditor. Thus, to link the transfer of Rs. 5 crore by Respondent No. 1 to the Corporate Debtor as an outcome of a draft MOU, which at best was a lame duck document, is neither convincing nor does it appeal to sound reason. We therefore find no cogent grounds to find any error in the above finding of the Adjudicating Authority in the preceding paragraph.

FULL TEXT OF THE NCLAT JUDGMENT/ORDER