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2020 (5) TMI 670 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - intention to recover alleged outstanding amount or to initiate the corporate insolvency resolution process (CIRP) against the corporate debtor or not - pre-existing dispute or not - time limitation - HELD THAT - The respondent has entered into a turn-key project with IPCHL now known as Hiranmaye Energy Ltd. for a coal handling plant and this contract was entered with IPCHL associate company-Shristi Infrastructure Development Corp Ltd. Though the purchase orders in question were placed by the respondent on the petitioner for supply of goods in question those are meant and delivered to ultimate customer namely IPCHL. Therefore ultimately all three parties to the issue viz the petitioner respondent and IPCHL conducted three meetings on July 8 2015 August 12 2015 and November 24 2015 whereby the petitioner agreed that IPCHL would release the balance amounts to it. Accordingly a minutes of meeting (MoM) dated November 24 2015 was duly executed by all three parties wherein IPCHL has agreed to release outstanding payment subject to despatch of the materials mentioned therein. IPCHL has also entered into similar agreements with other vendors as well and has been making direct payments. It is also relevant to point out here that the petitioner got issued a legal notice as early as March 14 2017 through their counsel M/s. Rajendra Lal Dua and Co. to the respondent. In response to the said legal notice the respondent got issued a reply dated April 6 2017 through their counsel by inter alia stating that the petitioner has agreed to receive the payments directly from IPCHL ; they have also paid Rs. 3, 45, 51, 500 out of Rs. 4, 71, 83, 890.61 ; and they have already authorised the petitioner to collect defaulted amount (last) Rs. 46, 68, 364 from IPCHL. Therefore they have made it clear that there was no existing liability between them after amendment of contract as agreed by it and thus requested them to return the security cheques (PDC) given by them - Moreover when the respondent has replied the petitioner as early as April 6 2017 as stated supra stating they are not liable to pay any amount to them the petitioner have failed to initiate any action except a criminal petition stated to have been filed under section 138 of the NI Act till they have issued the statutory demand notice dated June 27 2019 under the provisions of the Code. Even as per the purchase orders/MoM in question there is no mention about element of interest for defaulted amount. Contrary interest is also claimed for Rs. 32, 35, 375 along with principal amount of default. The petitioner has not furnished any reasons for not taking appropriate legal action in pursuance to their earlier legal notice dated March 14 2017. It is not the case of the petitioner that the respondent has received goods in question or received payments directly from IPCHL and used it. The contention of the petitioner that the MoM in question would not bind them is not at all tenable and it is liable to be rejected. And all the parties to MoM are bound by terms and conditions of it - So far as the issue of post- dated cheques by the respondent and their dishonour is concerned it is for the parties to prosecute the criminal case which is stated to be pending before the competent court subject to merits of that case. The petitioner failed to make out even prima facie case about the defaulted amount to be payable by the respondent apart from it the petition is barred by laches and limitation - Petition dismissed.
Issues Involved:
- Prima facie proof of debt liability by the respondent. - Intention behind filing the petition: recovery of outstanding amount or initiation of Corporate Insolvency Resolution Process (CIRP). - Existence of pre-existing dispute before issuing the statutory demand notice. - Laches and limitation barring the claim. Issue-wise Detailed Analysis: 1. Prima Facie Proof of Debt Liability: The petitioner, M/s. I and B Engineers P. Ltd., claimed that the respondent, M/s. Scorpio Engineering P. Ltd., defaulted on a debt amounting to Rs. 79,03,739, including interest. The respondent contended that payments were to be made directly by IPCHL to the petitioner, as per a tripartite agreement. The tribunal found that the petitioner had received substantial payments directly from IPCHL, indicating that the respondent was not liable for the outstanding amount. The tribunal noted that the petitioner failed to take appropriate legal action after the respondent's reply in 2017, which stated that they were not liable for the debt. 2. Intention Behind Filing the Petition: The tribunal questioned whether the petition was filed to recover the outstanding amount or to initiate CIRP. It was observed that the petitioner had issued a statutory demand notice under the Insolvency and Bankruptcy Code (IBC) after a significant delay and without taking any substantial legal action in the interim. The tribunal concluded that the petition was filed with the intention to recover the alleged outstanding amount rather than to initiate CIRP. 3. Existence of Pre-existing Dispute: The respondent argued that there was a pre-existing dispute regarding the payment liability, as evidenced by the tripartite agreement and subsequent communications. The tribunal agreed, noting that the petitioner had acknowledged the arrangement where IPCHL would make direct payments. The existence of such a dispute was found to be a significant factor, rendering the petition under the IBC inappropriate for summary proceedings. 4. Laches and Limitation: The tribunal considered whether the claim was barred by laches and limitation. It was noted that the petitioner delayed filing the petition by three years without providing a valid explanation. This delay, coupled with the pre-existing dispute, led the tribunal to conclude that the petition was barred by laches and limitation. Conclusion: The tribunal dismissed the petition, stating that the petitioner failed to establish a prima facie case for the debt liability of the respondent. The tribunal emphasized that the petition was filed with the intention to recover the outstanding amount rather than to initiate CIRP. The existence of a pre-existing dispute and the delay in filing the petition further supported the dismissal. The tribunal clarified that the petitioner could pursue recovery of the alleged outstanding amount through other permissible legal proceedings.
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