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2019 (11) TMI 1527 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Corporate Debtor committed default in making payment of dues - existence of debt and dispute or not - HELD THAT - The Claim made by the Petitioner in the present application is not a 'Claim' under the Code since there is no right to payment in respect of the amount which is the MDR deducted by the Corporate Debtor in the present case. Therefore, such claim is not debt in terms of the Code since there is no liability or obligation on part of the Corporate Debtor to pay such amount to the Petitioner. Since, there is no debt due towards the Petitioner by the Corporate Debtor, there is no question of default on the part of the Corporate Debtor. In view of the pre-existing dispute raised by the Corporate Debtor by an email dated 08.10.2018 claimed that the Corporate Debtor rightly withheld that the Amount of ₹ 22,21,197/- and also demanded further amount of ₹ 8,25,112/- and ₹ 10,53,917/- from the Petitioner and this is much prior to the demand notice dated 19.12.2019 issued by the Petitioner herein. Therefore, this bench is of the view that there is a plausible dispute raised by the Corporate Debtor and the petition is liable to be dismissed. The Petition is dismissed with liberty to the Petitioner to proceed accordance with law.
Issues Involved:
1. Default in payment by the Corporate Debtor. 2. Validity of the deductions made by the Corporate Debtor. 3. Existence of a pre-existing dispute. 4. Classification of the deducted amount as an operational debt under the Insolvency and Bankruptcy Code (IBC). Issue-wise Detailed Analysis: 1. Default in Payment by the Corporate Debtor: The Petitioner, a sole proprietor, filed a company petition seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor for a default in payment amounting to ?34,66,549/-. The Petitioner alleged that the Corporate Debtor deducted ?12,45,351/- and ?22,21,197/- without prior notice or terms and conditions, which constituted a default under Section 8 and 9 of the Insolvency and Bankruptcy Code (IBC). 2. Validity of the Deductions Made by the Corporate Debtor: The Corporate Debtor contended that the deductions were legitimate and in accordance with the terms of the agreement. The agreement authorized the Corporate Debtor to deduct Merchant Discount Rate (MDR) charges from the transaction amounts without prior notification. Due to a technical error, the Corporate Debtor had not recovered the MDR charges from January 2018 to September 2018, which led to the subsequent deduction of ?34,66,549/- upon discovering the glitch. The Corporate Debtor argued that these deductions were legitimate fees arising out of contractual obligations. 3. Existence of a Pre-existing Dispute: The Corporate Debtor argued that there was a pre-existing dispute regarding the claims made by the Petitioner. The dispute was raised prior to the issuance of the demand notice dated 19.12.2019. The Corporate Debtor had communicated the issue and the legitimacy of the deductions through an email dated 08.10.2018, which was much before the demand notice. The Tribunal found that the dispute was genuine and not spurious, hypothetical, or illusory. 4. Classification of the Deducted Amount as an Operational Debt: The Corporate Debtor contended that the deducted amount did not constitute a claim under the IBC since there was no liability or obligation to pay such amount to the Petitioner. The Tribunal agreed, stating that the claim made by the Petitioner did not qualify as an operational debt under the IBC. The Tribunal emphasized that since there was no debt due towards the Petitioner by the Corporate Debtor, there could be no default. Conclusion: The Tribunal dismissed the petition, citing the existence of a plausible dispute and the absence of a default under the IBC. The Tribunal referenced the Supreme Court's decision in Mobilox Innovations Pvt. Ltd. v. Kirusa Software (P) Limited, which held that an adjudicating authority must reject an application if a genuine dispute exists. The Tribunal granted liberty to the Petitioner to seek redressal through appropriate legal channels without being influenced by the Tribunal's observations. Separate Judgments: No separate judgments were delivered by the judges in this case.
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