2021 (4) TMI 1265 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of pre-existing dispute or not - time limitation - principles of estoppel - novation of contract - HELD THAT - A statement made before the arbitrator of both the parties not only amounts to an admission but also that principle of estoppel operates on the respondent/company for deviating from their own stand. It is also important to note that this statement which is made voluntarily by the Director of the respondent/company amounts to novation of the contract and casts a liability on the part of the respondent to make the payment as claimed in the petition. The petitioners have made out their case on the aspect of limitation which has been triggered from the date of this e-mail, viz. 21.01.2015 till the date of filing, viz. 26.09.2017, which is within the period of three years. The petition deserves to be admitted - petition admitted - moratorium declared.

Summary

Issues Involved:
1. Whether the petition has been filed within the period of limitation?
2. Whether the respondent/company is liable to pay any amounts to the petitioner?

Issue-wise Detailed Analysis:

1. Whether the petition has been filed within the period of limitation?

The petition was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, by the Operational Creditor, claiming that the Corporate Debtor had committed a default of ?31,40,37,776/- as on 03.08.2017. The Operational Creditor contended that the Corporate Debtor acknowledged the liability and agreed to pay the balance amount via an e-mail dated 21.01.2015, which stated, "we shall be making one crore payment every month starting with this month end." This email, sent by the Director of the respondent, was considered an acknowledgment of debt, thus resetting the limitation period. The Tribunal observed that the petition filed on 26.09.2017 was within the three-year limitation period from the date of the acknowledgment email on 21.01.2015.

2. Whether the respondent/company is liable to pay any amounts to the petitioner?

The Tribunal examined the "Agreement for execution of various Civil and Hydro Mechanical Works of 99 MW Chuzachen Hydro Electric Power Project, Sikkim" dated 12.08.2006, and the subsequent Settlement Agreement dated 14.12.2013. The Settlement Agreement stipulated that the Corporate Debtor was to pay ?10 crores, and the balance ?23.98 crores was to be paid by the promoter, AJVPL. The Corporate Debtor argued that it had fulfilled its obligation by paying ?10 crores and was not liable for the remaining amount, citing Clause 2.7 of the Settlement Agreement.

However, the Tribunal noted that the Corporate Debtor's Director had acknowledged the debt and agreed to a payment schedule in the email dated 21.01.2015. This acknowledgment was considered a novation of the contract, binding the Corporate Debtor to the liability. Additionally, the Tribunal found that the petitioner had withdrawn its claim in the CIRP of AJVPL, reinforcing the Corporate Debtor's liability.

The Tribunal also addressed the claim of ?2.03 crores towards "Motorised Door and restoration of land/dump yards," noting that the Corporate Debtor had agreed to pay this amount subject to completion of the work to its satisfaction. The Tribunal found that the disputes regarding the work were addressed before the issuance of the Certificate of Merit dated 24.09.2015, and no disputes were raised post-certification.

Order:

The Tribunal admitted the petition under Section 9 of the IBC, 2016, and declared a moratorium as per Section 14 of the Code. The Tribunal appointed an Interim Resolution Professional (IRP) and directed the public announcement of the initiation of the Corporate Insolvency Resolution Process. The Tribunal also ordered the Registry to update the status of the Corporate Debtor on the MCA-21 site of the Ministry of Corporate Affairs. Consequently, CA No. 28 of 2018 was disposed of as infructuous.