2020 (12) TMI 1323 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - time limitation - Service of demand notice - HELD THAT - On perusal of the record, it is found that the Demand Notice was issued by the applicant on 15.03.2019, under Section 8 of the I B Code, through registered post on 19.03.2019. However, the same was returned with a postal remark addressee moved . The applicant has also issued Demand Notice through email on the same date demanding the arrears of the Annual Listing Fee. However, no dispute is raised by the corporate debtor. Time Limitation - HELD THAT - Admittedly, the petitioner received the last payment on 28.06.2013 amounting to ₹ 67,416/- for the Financial Year 2013-2014. However, the petitioner in Form-5 has stated that debt fell due on 01.04.2015. Further, on perusal of page no. 12, at para-2.10 of the petition, it is found that the respondent has made payment of annual listing fee to the applicant till Financial Year 2013-2014 only. The last payment being received on 28.06.2013 for an amount of ₹ 67,416/-. Thereafter, the corporate debtor did not pay any amount in respect of Annual Listing Fee to the petitioner. Since the debt fell due on 01.04.2015 as admitted by the petitioner, that itself is barred by Law of Limitation - Further, the date of default in Form-5, Part-IV in clause No.2 is not reflected which makes Form-5 incomplete. However, while calculating from the due date as per Form5 which is shown 01.04.2015, is beyond three years. On perusal of the application, it is found that the applicant has annexed one affidavit along with a Form-5 in support of initiation of Corporate Insolvency Resolution Process. Admittedly, in para-2.2 (page no. 8), it is stated that the respondent company was earlier known as Adeshwar Cotton Industries Ltd. and the same came to be replaced by ACIL Cotton Industries Ltd. on 06.10.2019. In support of the said contention, the applicant annexed master data received from the MCA website. However, even after the change of name of the corporate debtor, the applicant has not entered into a fresh agreement with ACIL Cotton Industries Ltd. (corporate debtor) - the agreement so filed cannot be relied upon, as the same is not a valid agreement in the eye of law. The application so filed, under Section 9 of the Insolvency and Bankruptcy Code, 2016, is bad in the eye of law and is not maintainable, hence, it does not deserve for admission - petition dismissed.

Summary

Issues:
Initiating Corporate Insolvency Resolution Process under Section 9 of the Insolvency and Bankruptcy Code, 2016 based on non-payment of Annual Listing Fees by the Corporate Debtor.

Analysis:
1. Factual Background: The Operational Creditor, a recognized stock exchange, filed a Company Petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process against the Corporate Debtor for non-payment of Annual Listing Fees.

2. Operational Debt: The Operational Creditor detailed the history of the Listing Agreement between the parties, stating that the Corporate Debtor failed to pay the Annual Listing Fee as per the agreement, resulting in an operational debt of ?11,33,922 due and payable by the Corporate Debtor.

3. Notice and Demand: Despite repeated reminders and a Demand Notice sent to the Corporate Debtor, no response was received, leading to the filing of the petition. The Corporate Debtor did not appear before the Tribunal or file a reply, necessitating paper publication.

4. Limitation: The Tribunal considered the issue of limitation, noting that the debt fell due on 01.04.2015, and as per the Law of Limitation, the application was barred since it was filed on 15.05.2019, beyond the three-year limitation period.

5. Validity of Agreement: The Tribunal found discrepancies in the agreement submitted by the Operational Creditor, including missing signatures, blank pages, and lack of a fresh agreement after the change in the Corporate Debtor's name, rendering the agreement invalid in the eyes of the law.

6. Dismissal of Petition: Based on the above findings, the Tribunal dismissed the Company Petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, stating that it was not maintainable and did not deserve admission. No costs were awarded in the matter.

7. Future Recourse: The Tribunal clarified that its findings would not prevent the Operational Creditor from pursuing the claim through other forums or competent authorities for recovery, allowing the petitioner to explore alternative legal avenues for claim resolution.

8. Communication: The Registry was directed to provide a copy of the order to both the petitioner and the respondent for their information and records.