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2019 (2) TMI 1702 - Tri - Insolvency and BankruptcyMaintainability of petition - Initiation of CIRP - Corporate Debtor failed to pay the total outstanding debt - Operational Debt - Existence of dispute or not? - HELD THAT - The Respondent Debtor has filed a Civil Suit on 02.05.2019 but it has no correlation to the claim amount of the Petitioner as the same is totally different from the Rent amount. The Bench observed that the Petitioner has not claimed anything related to balance rent amount and hence the dispute on rent will not apply to the payment of Royalty which is demanded through the Demand Notice dated 22.02.2018 - it is clear that there is no existence of dispute vis- -vis amount claimed as Royalty payment. This Bench being satisfied that the Respondent Debtor company defaulted in paying its debt to the Petitioner hereby Admit this Petition - Petition admitted - moratorium declared.
Issues Involved:
1. Default in payment of operational debt. 2. Existence of dispute prior to the demand notice. 3. Validity of the Lease Deed and the terms of compensation. 4. Admission of the petition and initiation of Corporate Insolvency Resolution Process (CIRP). Issue-wise Detailed Analysis: 1. Default in Payment of Operational Debt: The petitioner, an operational creditor, filed a company petition under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016, against the corporate debtor for an operational debt of ?2,81,250/-. The corporate debtor defaulted on monthly payments by dishonoring post-dated cheques since 06.10.2017. The petitioner sent a demand notice on 22.02.2018 under Section 8 of IBC, but the corporate debtor failed to make the payment, prompting the petitioner to initiate CIRP. 2. Existence of Dispute Prior to the Demand Notice: The corporate debtor argued that a dispute existed before the demand notice, citing a civil suit filed on 02.05.2017 against the landlords for maintenance issues. The corporate debtor claimed the petitioner and others failed to fulfill their obligations under the Lease Deed, leading to the stop payment of cheques. They referenced the Supreme Court judgment in "Mobilex Innovations Private Limited v. Kirusa Software Private Limited," emphasizing that the existence of a dispute before the demand notice disqualifies the admission of a petition under Section 9 of IBC. 3. Validity of the Lease Deed and the Terms of Compensation: The Lease Deed dated 13.10.2016 was the base document for the transaction. It included terms for monthly rent and compensation to two ex-directors, including the petitioner, for their past services. The petitioner argued that the operational debt arose from dishonored cheques issued as per the Lease Deed. The corporate debtor contended that they stopped payment due to the landlords' failure to maintain the premises, as required by the Lease Deed. 4. Admission of the Petition and Initiation of CIRP: The tribunal examined the facts and found no correlation between the civil suit for maintenance and the compensation claimed by the petitioner. The tribunal noted that the civil suit did not address the compensation/royalty payment, which was the basis of the operational debt. The tribunal concluded that there was no pre-existing dispute regarding the compensation claimed by the petitioner. Therefore, the tribunal admitted the petition and initiated CIRP against the corporate debtor. Findings: The tribunal found that the corporate debtor defaulted on its debt to the petitioner. It clarified that the compensation payable to the petitioner was distinct from the rent and fell within the category of 'Royalty' payment. The tribunal imposed a moratorium as per Section 14 of IBC, effective from 00.01.2019 until the completion of the CIRP or until further orders. The tribunal confirmed the appointment of the Interim Resolution Professional (IRP) to carry out the functions under the IBC and directed the registry to communicate the order to the concerned parties. The IRP was instructed to submit a progress report before the next hearing on 25.03.2019. Order: The tribunal admitted the petition CP(IB)-443/2018, imposed a moratorium, and confirmed the appointment of Mr. Manoj Jain as the IRP. The tribunal directed the registry to communicate the order and scheduled the next hearing for 25.03.2019.
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