2020 (5) TMI 346 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - Operational Debt present or not - Debt due and payable or not - HELD THAT - It is evident from the copies of invoices that there is no tax invoice paid by way of royalty to the land authorities by the Petitioner which points to the fact that no work was done by the Petitioner. There is nothing on record to show that there has been any compliance to NHAI procedures, royalty payment, approval of source of material in name of either of the parties. Therefore, this Bench has no hesitation in arriving at a conclusion, based on the facts submitted before it, that it is not a fit case of Operational Debt which can be considered u/s. 9 of the IBC. The Bench finds there is no 'Debt due' and payable and therefore, dismisses the Petition filed by the Petitioner. Petition dismissed.

Issues Involved:
1. Existence of a legally binding agreement.
2. Validity of invoices and claims made by the Petitioner.
3. Compliance with procedural requirements for billing and payment.
4. Allegations of forgery and criminal complaints.

Detailed Analysis:

1. Existence of a Legally Binding Agreement:
The Petitioner claimed that the work was carried out pursuant to an Agreement dated 20th July 2015. However, the Tribunal found that this document was a Letter of Intent (LoI) and not a formal agreement. The LoI explicitly stated that a detailed agreement would be drawn up after acceptance, which never occurred. Therefore, the Tribunal concluded that no formal agreement existed between the parties.

2. Validity of Invoices and Claims Made by the Petitioner:
The Petitioner submitted invoices for the work allegedly performed. The Tribunal noted that these invoices lacked signatures or receipts from the Respondent, indicating they were never served. Additionally, the invoices did not include necessary details such as payment of wages or transportation specifics, which were required as per the LoI. The Tribunal found the invoices to be improper and unsubstantiated, supporting the Respondent’s claim that no work was done.

3. Compliance with Procedural Requirements for Billing and Payment:
The LoI outlined specific procedures for volumetric measurement and billing, which required joint measurement by representatives of both parties. The Petitioner failed to provide evidence of such joint measurements. Furthermore, the LoI stipulated that bills would be processed only after verification of wage payments, which was not demonstrated by the Petitioner. The Tribunal found that these procedural requirements were not met, undermining the Petitioner’s claims.

4. Allegations of Forgery and Criminal Complaints:
The Respondent alleged that the signatures on the confirmation of accounts were forged and had filed a criminal complaint. The Tribunal took note of this and found that the Petitioner did not provide sufficient evidence to counter these allegations. The Tribunal also observed that there was no communication from the Petitioner to the Respondent regarding payment before the demand notice, supporting the Respondent’s claim that no work was done.

Conclusion:
The Tribunal concluded that there was no "Debt due" and payable, as the Petitioner failed to prove the existence of a legally binding agreement, did not comply with procedural requirements, and submitted unsubstantiated invoices. Consequently, the Petition filed by the Petitioner was dismissed.

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