2019 (7) TMI 1872 - Tri - Insolvency and Bankruptcy

Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - whether there is a pre existence of dispute as between the parties even before issue of the Section 8 demand notice by the Petitioner, because the existence of such a dispute will make the present application non maintainable taking into consideration the scheme of the code and well laid down judicial precedents since coming into force of IBC, 2016? - HELD THAT - Taking into consideration the agreement as entered into between the parties as well as indemnity bonds furnished thereunder by the Petitioner to the respondent in relation to its performance as well as the correspondences exchanged between the parties, particularly the one dated 10.12.2012 sent by the respondent to the Petitioner making the petitioner solely responsible for the losses occasioned on account of storage and handling being the services expected to be performed by the Petitioner under the agreements with the corporate debtor and the due performance of which there seems to be a pre existing dispute falling within the confines of Section 5(6) of IBC, 2016. Taking into consideration the decision of Mobilox Innovations Private Limited Vs Kirusa Software Private Limited. 2017 (9) TMI 1270 - SUPREME COURT . Thus, the respondent having established a plausible contention and which contention cannot be considered as a mere sham or illusory this petition cannot be entertained under the provisions of IBC, 2016. The petition is not maintainable and hence stands dismissed.

Summary

Issues:
Petition under Section 9 of Insolvency and Bankruptcy Code, 2016 for Corporate Insolvency Resolution Process (CIRP) against the Respondent.

Analysis:
1. Agreement Details: The petitioner, an operational creditor, entered into agreements with the corporate debtor for handling and transportation services. Outstanding invoices and security deposit issues were highlighted, leading to non-payment by the corporate debtor.

2. Demand Notice: The operational creditor served a demand notice on the corporate debtor for payment of dues. The respondent failed to respond or clear the outstanding amount, prompting the petition under Section 9 of the Code.

3. Respondent's Reply: The corporate debtor contended that the petitioner failed to perform duties, resulting in a loss of boiled rice stock. Discrepancies in the amount claimed by the petitioner and the actual outstanding amount were raised. The respondent argued that the petitioner concealed disputes and failed to fulfill contractual obligations.

4. Dispute Existence: The key issue was whether a pre-existing dispute existed between the parties before the demand notice was issued. The respondent cited clauses from agreements and indemnity bonds, holding the petitioner responsible for losses incurred during handling and storage of goods.

5. Judicial Analysis: The Tribunal analyzed the agreements, indemnity bonds, and correspondences between the parties. Referring to previous judicial precedents, the Tribunal concluded that a pre-existing dispute existed, making the petition non-maintainable under Section 5(6) of the IBC, 2016. The petitioner was advised to seek remedies through other legal forums.

6. Decision: The Tribunal dismissed the petition, stating that the respondent's contentions regarding the pre-existing dispute were plausible and not illusory. The petitioner was not barred from seeking remedies through alternative legal avenues despite the dismissal of the present petition.