2018 (10) TMI 1765 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate debtor defaulted in making repayment - existence of debt and default or not - HELD THAT - There are several clauses in the agreement in question, and the respondent, on the contrary made claim against the petitioner. Ultimately, the parties in the first instance have to reconcile their own statement of accounts before approaching the Tribunal to invoke provisions of IBC, 2016. The Petitioner, instead of finalising the disputed amounts, has filed the instant Company Petition on untenable grounds. The question of excess payment, and set-off as claimed by the respondent has to be examined in an appropriate proceeding in a case filed in accordance with the law, and the issue cannot be adjudicated in the instant Company Petition. There is a dispute with regard to debt in question, and thus it is not a fit case to admit - Application rejected.

Summary

Issues Involved:
1. Maintainability of the petition under Section 9 of the Insolvency and Bankruptcy Code, 2016.
2. Existence of a dispute regarding the debt and default.
3. Appropriateness of the forum for resolving the dispute.

Issue-wise Detailed Analysis:

1. Maintainability of the Petition:
The petitioner, M/s. Pedersen Consultants India Pvt. Ltd., filed C.P.(IB) No. 35/BB/2018 under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process against M/s. Nitesh Estates Limited. The petitioner claimed that the respondent failed to make payments towards several invoices amounting to ?20,21,800/- despite multiple requests and statutory demand notices. The respondent opposed the application, arguing that the petition was not maintainable due to existing disputes and alleged overpayments.

2. Existence of a Dispute:
The respondent raised multiple defenses, including:
- The petitioner failed to provide suitable candidates for several positions, leading to vacancies.
- The petitioner was required to replace a candidate for the Vice President-Sales position due to termination for forged documents, as per the recruitment contract's guarantee clause.
- The respondent claimed to have paid an excess amount of ?5,84,000/- and demanded a return of ?3,39,200/- from the petitioner.
- The respondent argued that the invoices raised by the petitioner had discrepancies, including incorrect service tax rates.
- The respondent relied on the judgment in Mobilox Innovations (P.) Ltd. v. Kirusa Software Private Limited, contending that the presence of a dispute should lead to the rejection of the application under Section 9(5)(2)(d).

The Tribunal found that there were various disputed questions of fact regarding the debt and default. The petitioner's claim that the defenses were "moonshine" was not accepted. The Tribunal noted that the petitioner could not prove the debt and default beyond doubt, and the issues raised required a detailed inquiry, which was beyond the scope of a summary proceeding under the IBC, 2016.

3. Appropriateness of the Forum:
The Tribunal emphasized that the IBC proceedings are summary in nature and primarily decided based on natural justice principles. Given the disputed facts and counterclaims, the Tribunal opined that the parties should reconcile their accounts before approaching the Tribunal. The Tribunal suggested that the issues of excess payment and set-off claimed by the respondent should be examined in an appropriate proceeding filed in accordance with the law.

Conclusion:
The Tribunal concluded that the case involved a dispute regarding the debt in question, making it unsuitable for admission under the IBC, 2016. Therefore, exercising the powers conferred under Section 9(2)(ii) of the IBC, 2016, the Tribunal rejected C.P.(IB) No. 35/BB/2018. However, the order did not preclude the petitioner from filing appropriate proceedings before a competent court with jurisdiction over the matter.