9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (11) TMI 1541 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - demand notice issued after filing of the Civil suit - existence of debt and dispute or not - HELD THAT - The Hon'ble NCLAT in the cases of KANTI COMMERCIALS PVT. LTD. VERSUS BELTHANGADY TALUK RUBBER GROWERS MARKETING PROCESSING CO-OPERATIVE SOCIETY LIMITED AND ORS. 2018 (3) TMI 1889 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI and PHOENIX MARKETING VERSUS UNITED BREWERIES LTD. 2018 (3) TMI 1890 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI has held that the pendency of a Civil suit before the issue of Demand notice is a dispute falling under Section 5(6) of the Code. The ratio laid down in the judgements is applied to the facts of the case on hand, since a civil suit is already pending in the City Civil Court, the present Petition deserves to be dismissed. Petition dismissed.
Issues:
1. Petition seeking Corporate Insolvency Resolution Process (CIRP) against Corporate Debtor for default in payment. 2. Allegation of default in payment and interest charges. 3. Dishonored cheques and legal actions taken. 4. Civil suit filed for recovery of money. 5. Issuance of demand notice under Section 8 of the Code. 6. Application of legal precedents in determining the existence of a dispute. 7. Interpretation of the pendency of a civil suit as a dispute under the Code. Analysis: 1. The judgment involves a Company Petition filed by the Petitioner to initiate the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor due to an alleged default in payment amounting to ?23,66,923, including interest at the rate of 24% per annum. The Petition invokes Sections 8 and 9 of the Insolvency & Bankruptcy Code, along with relevant rules. 2. The Petitioner supplied TMT Steel materials to the Corporate Debtor and claimed interest at 36% per annum on delayed payments. The Corporate Debtor acknowledged a principal balance of ?18,17,660 as of 31.03.2017, with overdue bills and agreed to pay interest at 24% per annum as late payment charges. However, four cheques issued by the Corporate Debtor were dishonored due to insufficient funds, leading to legal actions, including a criminal complaint and a civil suit for recovery. 3. The Petitioner's civil suit for recovery was already pending before the Bombay City Civil Court when a demand notice under Section 8 of the Code was issued on 19.01.2019. The Corporate Debtor contested the civil suit by filing written statements, indicating a dispute over the same set of facts. 4. The judgment references the Supreme Court's decision in Mobilox Innovations Pvt. Ltd. v. Kirusa Software (P) Limited, emphasizing the adjudicating authority's role in determining the existence of a plausible contention requiring further investigation regarding a dispute. The judgment highlights the need to differentiate between genuine disputes and spurious defenses, emphasizing that the court does not assess the dispute's likelihood of success at this stage. 5. Furthermore, the judgment cites NCLAT decisions that recognize the pendency of a civil suit as a dispute under the Code. Applying the legal precedents to the case at hand, where a civil suit was already ongoing, the judgment concludes that the Petition should be dismissed as the dispute falls under Section 5(6) of the Code. Consequently, the Petition was dismissed without costs.
|
