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2021 (12) TMI 1384 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT - It is an admitted fact that Rs. 32,43,000/- was paid as an advance to the Corporate Debtor by the Operational Creditor. This deposit is towards the advance licence fee, It is also an admitted fact that by filing this application, the Petitioner has claimed that since the amount was not refunded, therefore, there is @ default in payment of the amount, which comes under the definition of the Operational Debt. Pre-existing dispute or not - contention of the Respondent is that there is pre-existing dispute which the respondent has raised by issuance of the legal notice under Section 138 NI Act - HELD THAT - The issuance of the N.LA legal notice under NI, Act, cannot be treated as dispute. Therefore, there are no force in the contention raised on behalf of the Respondent that there is a preexisting dispute. It is further noticed that the application filed by the applicant under Section 9 is complete, demand notice was duly delivered and the amount claimed in Part-IV has not been paid as yet. There is no payment of unpaid operational debt or the invoices, notice for payment to the Corporate Debtor has been duly delivered by the Operational Creditor and no notice of dispute has been received by the Operational Creditor or there is no record of dispute - the applicant has fulfilled all the criteria as required under Section 9 (5) (i) of the IBC. Petition admitted - moratorium declared.
Issues Involved:
1. Maintainability of the petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC). 2. Definition and applicability of "Operational Debt." 3. Existence of a pre-existing dispute. 4. Validity and enforceability of the agreement between the parties. Detailed Analysis: 1. Maintainability of the Petition: The petition was filed by the Operational Creditor under Section 9 of the IBC for initiating the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. The Corporate Debtor argued that the petition was not maintainable due to a pre-existing dispute and that the claim did not qualify as an operational debt. The tribunal examined whether the advance payment made by the Operational Creditor constituted an operational debt and whether the application met the requirements under Section 9 of the IBC. 2. Definition and Applicability of "Operational Debt": The tribunal referred to the definition of "Operational Debt" under Section 5(21) of the IBC, which includes claims in respect of the provision of goods or services. The Operational Creditor argued that the advance payment made towards the license fee for providing operational and management services constituted an operational debt. The tribunal cited decisions from the Hon'ble NCLAT, such as "Joseph Jayananda v. Navalmar (UK) Limited" and "Anup Sushil Dubey v. National Agriculture Cooperative Marketing Federation of India Ltd.," which supported the view that advance payments for services fall under the definition of operational debt. The tribunal concluded that the amount of INR 32,43,000/- paid by the Operational Creditor towards the advance license fee indeed constituted an operational debt. 3. Existence of a Pre-existing Dispute: The Corporate Debtor contended that there was a pre-existing dispute, citing a legal notice under Section 138 of the Negotiable Instruments Act (N.I. Act). The tribunal noted that the issuance of a legal notice under the N.I. Act could not be treated as a dispute under the IBC. The tribunal found no evidence of a pre-existing dispute that would invalidate the petition under Section 9 of the IBC. 4. Validity and Enforceability of the Agreement: The Corporate Debtor argued that the agreement was not valid as it was neither signed by both parties nor registered under Section 17 of the Registration Act. The Operational Creditor countered that the agreement was binding by performance, as evidenced by the acceptance and encashment of the cheque for INR 32,43,000/-. The tribunal agreed with the Operational Creditor, stating that the performance of the agreement and the acceptance of payment indicated a binding contract under Section 8 of the Indian Contract Act, 1872. Conclusion: The tribunal found that the petition was maintainable, the claim constituted an operational debt, and there was no pre-existing dispute. The tribunal admitted the petition under Section 9 of the IBC and initiated the CIRP against the Corporate Debtor. A moratorium was declared, and Mr. Vivek Kumar was appointed as the Interim Resolution Professional (IRP). The Operational Creditor was directed to deposit a sum of INR 2 lakhs to meet the immediate expenses of the IRP. Copies of the order were to be sent to both parties and the IRP. Order: 1. The petition is admitted. 2. A moratorium under Section 14 of the IBC is declared. 3. Mr. Vivek Kumar is appointed as the IRP. 4. The Operational Creditor is directed to deposit INR 2 lakhs for the IRP's immediate expenses. 5. Copies of the order to be sent to both parties and the IRP.
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