9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (9) TMI 799 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT - It is a settled position of law that the provisions of Code cannot be invoked for recovery of outstanding amount but it can be invoked to initiate CIRP on justified reasons - The Hon'ble Supreme Court in the case of MOBILOX INNOVATIONS PRIVATE LIMITED VERSUS KIRUSA SOFTWARE PRIVATE LIMITED 2017 (9) TMI 1270 - SUPREME COURT has inter alia, held that IBC, 2016 is not intended to be substitute to a recovery forum. The instant petition is filed on misconceived fact and law and against the object of Code. Since the Respondent agreed to settle the claim of the Petitioner, subject to substantiating it, we are inclined to dispose of the instant petition directing the Respondent to settle the claim of the Petitioner, provided the Petitioner submitted requisite documents - Petition disposed off.
Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP) 2. Existence of Operational Debt 3. Dispute over Debt and Services Provided 4. Admissibility of Interest on Debt 5. Compliance with Procedural Requirements under IBC Detailed Analysis: 1. Initiation of Corporate Insolvency Resolution Process (CIRP): The Petitioner, an Operational Creditor, sought to initiate CIRP against the Corporate Debtor under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016. The petition was based on the default of ?13,26,340, including default interest as of 31.01.2019. The Operational Creditor provided mentoring and consultancy services to the Corporate Debtor from August 2016 to April 2017. Despite partial payments, several invoices remained unpaid, leading to the petition. 2. Existence of Operational Debt: The Corporate Debtor acknowledged the debt and made partial payments but disputed the full amount claimed by the Operational Creditor. The Respondent contended that the services provided in April 2017 were unsatisfactory, leading to the termination of the relationship. The Petitioner argued that the debt was acknowledged through TDS deductions and various communications, including WhatsApp messages. 3. Dispute over Debt and Services Provided: The Respondent argued that the petition was filed with suppressed material facts and that the Petitioner failed to provide supporting documents for the services rendered. The Corporate Debtor requested details of activities and supporting documents for the invoices raised, which the Petitioner did not furnish. The Tribunal noted that the Petitioner did not take legal action promptly and issued the demand notice only on 21.01.2019, despite the first invoice being due on 28.08.2016. 4. Admissibility of Interest on Debt: The Petitioner calculated interest at 15% compound annual interest, which the Respondent termed as absurd. The Tribunal observed that there was no mention of interest in the invoices or any agreement regarding it. The principal amount claimed was ?10,12,930, and the interest due was ?3,13,410. The Tribunal suggested that the interest charged was not substantiated by any agreement or market practice. 5. Compliance with Procedural Requirements under IBC: The Tribunal emphasized that the provisions of the IBC could not be invoked for the recovery of outstanding amounts but to initiate CIRP on justified grounds. It referred to the Supreme Court's rulings in *Mobilox Innovations Private Limited Vs. Kirusa Software Private Limited* and *Transmission Corporation of A.P. Ltd. Vs. Equipment Conductors and Cables Ltd.*, which stated that the existence of undisputed debt is essential for initiating CIRP. The Tribunal found that the Petitioner failed to establish the debt and its legal recoverability before filing the petition. Conclusion: The Tribunal concluded that the petition was filed on misconceived facts and law, and against the objectives of the IBC. It directed the Petitioner to furnish the requisite documents to the Respondent within four weeks. The Respondent was then directed to consider the documents and settle the claim within four weeks thereafter. The petition was disposed of with no order as to costs.
|
