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2020 (9) TMI 1222 - AT - Companies LawDishonor of Cheque - intent to clear the debt of the Operational Creditor or not - default and noncompliance of the order of this Tribunal - HELD THAT - Admittedly, the cheques which were issued under the MoU have bounced and there is default on the part of the Corporate Debtor which breached the MoU/Agreement filed before this Tribunal. Submissions of both the sides show that in spite of the MoU, the Operational Creditor did give time to the Corporate Debtor to make payments and did not immediately rush to deposit the cheques. The cheques when ultimately deposited got dis-honoured. There are no reason why the Application as filed by the Operational Creditor should not be allowed. On the face of the record, the Corporate Debtor is unable to clear its dues. Now, when the unlock periods are going on, still the Corporate Debtor is not in a position to say that the debt will be paid by a particular date. Though learned Counsel for Original Appellant for Corporate Debtor seeks one more opportunity to pay and claiming that Annexure-R3 of Reply shows it had moved Mentioning Application to extend time to pay, no sincerity to pay ₹ 1.46 Crores is demonstrated. Again, in a settlement between parties, this Tribunal will not on its own extend periods, not agreed. Application allowed.
Issues:
1. Enforcement of Memorandum of Understanding (MoU) between the parties during the pendency of an appeal. 2. Default in making payments by the Corporate Debtor leading to a contempt case. 3. Request for extension of time to clear dues by the Corporate Debtor. 4. Decision on the application filed by the Operational Creditor to recall orders and restore the impugned order. Enforcement of Memorandum of Understanding (MoU): The Operational Creditor filed an application claiming that the Corporate Debtor breached the MoU by dishonoring 18 post-dated cheques given as per the agreement. Despite accommodating the Corporate Debtor initially due to lockdown issues, all cheques were eventually dishonored. The Tribunal had granted liberty to the Operational Creditor to approach in case of default. The Tribunal observed that the cheques issued under the MoU bounced, indicating default by the Corporate Debtor. Default in making payments by the Corporate Debtor: A contempt case was filed by the Insolvency Resolution Professional (IRP) due to non-payment of fees by the Corporate Debtor. The Original Appellant claimed to have made partial payments, but the IRP disputed this, stating that the fees were not paid and the cheque given was dishonored. The Corporate Debtor cited difficulties faced during the Covid-19 pandemic, requesting additional time to clear dues. Request for extension of time to clear dues by the Corporate Debtor: The Corporate Debtor sought an extension to clear the debt, emphasizing the challenges faced during the pandemic. However, the Operational Creditor was not inclined to grant further time, highlighting that multiple opportunities were already provided. The Tribunal noted that the Corporate Debtor failed to demonstrate a sincere intention to pay the outstanding amount. Decision on the application filed by the Operational Creditor: The Tribunal allowed the Operational Creditor's application to recall the orders and restore the impugned order dated 26.02.2020. Despite the Corporate Debtor's plea for an extension, the Tribunal found no compelling reason to grant further time, considering the default in payments and lack of commitment shown. The Tribunal dismissed the appeal and restored the original order, directing the IRP to proceed with the Corporate Insolvency Resolution Process from the stage before the appeal was filed. The contempt case filed by the IRP was disposed of in light of the order recalling the previous decision.
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