9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (2) TMI 823 - AT - Insolvency and BankruptcyInitiation of CIRP - consent decree / Decree Holder - whether decree comes under the definition of Corporate Debt or not - Corporate Debtor failed to make repayment of its dues - existence of debt or not - Operational Creditor - capacity as a person who is a proprietor of a firm is an Individual - HELD THAT - In the instant case, the Appellant/Petitioner has come out with a plea that the Respondent/Corporate Debtor had admitted to pay a sum of ₹ 7,50,000/- towards the Principal sum in respect of goods received by the Respondent/Corporate Debtor, as per Settlement Agreement dated 16.8.2018 etc. Furthermore, ₹ 1,35,000/- towards Penalty of ₹ 5,000/- per instalment per month as per Undertaking given by the Respondent/Corporate Debtor and the same was recorded by the Learned Additional District Judge, Saket Court, New Delhi in Civil Suit No.6912 of 2016 in the case of Ashok Agarwal v. Amitex Polymers Pvt.Ltd.(Respondent/Corporrate Debtor) and Another. Therefore the total dues claimed by the Appellant/Operational Creditor as per Consent Decree passed by the Competent Court of law is ₹ 8,85,000/- as seen from Part IV of Application wherein the Particulars of Operational Debt were mentioned - Even a person who is a proprietor of a firm is an Individual as per Section 3(23) inclusive definition of The Insolvency and Bankruptcy Code 2016, in the considered opinion of this Court. As such, the Appellant is not incompetent in his Individual capacity as proprietor of M/s Shree Marketing, New Delhi. The Principal Bench had come out with a plea that the Respondent/Corporate Debtor owes a sum of ₹ 8,85,000/- and for which a demand notice dated 11.3.2019 was issued to the Respondent/Corporate Debtor for which no reply was issued by the Respondent/Corporate Debtor to the Appellant/Operational Creditor and this Tribunal taking note of the prime fact that the Appellant/Operational Creditor is a Decree Holder as per the Consent Decree passed on 25.10.2018 in Civil Suit No.6912 of 2016 by the Learned Additional District Judge, Saket Court, New Delhi, this Court comes to an irresistible and inescapable conclusion that a Decree Holder is no way excluded from the purview of the ambit of the term Operational Creditor as per Section 5(20) of The Insolvency and Bankruptcy Code 2016 and the contra view taken by the Adjudicating Authority in the impugned order is clearly held by this Tribunal as an unsustainable one in the eye of Law - In the present case, the Appellant/Operational Creditor supplied the goods based on invoices beginning from 19.2.2011 to 26.3.2011 amounting in all to a sum of ₹ 7,28,072/- and in due discharge of legal liability/lawful debt towards payment of dues/Invoices by the Respondent/Corporate Debtor had paid a sum of ₹ 1,10,221/- as mentioned by the Appellant/Operational Creditor in the Application in Part IV under caption of Particulars of Operational Debt . The other aspect of the matter to be significantly pointed out is that the Respondent/Corporate Debtor through its purchase orders had offered to make payment to the Appellant/Corporate Debtor within a period of 45- 60 days and in fact the payment was agreed to be made within 30 days from the date of Invoice. As a matter of fact, the Respondent/Corporate Debtor had not made any payment in respect of the due amount even after the Consent Decree passed by the Competent Court of law. Section 3(10) of The Insolvency and Bankruptcy Code 2016 defines Creditor and even in the said definition a Decree Holder cannot be excluded to file an Application under the Code. Going by the definition 3(10) of Creditor , it includes Financial Creditor , Operational Creditor . The impugned order passed by the National Company Law Tribunal, New Delhi Bench is set aside by this Tribunal for the reasons assigned in the instant Appeal - Appeal allowed.
Issues Involved:
1. Definition and applicability of "Operational Creditor" and "Decree Holder" under the Insolvency and Bankruptcy Code (IBC), 2016. 2. Validity of demand notice and service of notice under Section 8 of IBC. 3. Maintainability of the application filed by the Appellant under Section 9 of IBC. 4. The impact of a consent decree on the status of debt and creditor. 5. The procedural aspects and requirements of initiating Corporate Insolvency Resolution Process (CIRP). Detailed Analysis: 1. Definition and Applicability of "Operational Creditor" and "Decree Holder" under IBC, 2016: The Tribunal analyzed the definitions provided under Sections 3(10), 3(11), 5(20), and 5(21) of the IBC. It was observed that while the term "Creditor" includes a "Decree Holder," the definitions of "Financial Creditor" and "Operational Creditor" do not explicitly include "Decree Holder." The Tribunal referred to the case of Digamber Bhondwe Vs. JM Financial Asset Reconstruction Company Limited, which held that a decree-holder does not come within the definition of an Operational Creditor to initiate CIRP under Part II of the IBC. However, the Tribunal concluded that a "Decree Holder" is not excluded from being an "Operational Creditor" under Section 5(20) of the IBC, thereby allowing the appeal. 2. Validity of Demand Notice and Service of Notice under Section 8 of IBC: The Tribunal examined the service of the demand notice sent by the Appellant under Section 8 of the IBC. It was noted that the notice sent via speed post was returned undelivered, and subsequently, the notice was sent via email. The Tribunal held that service of notice through the official email ID of the Respondent, as available on the Ministry of Corporate Affairs portal, constitutes valid service. The Tribunal referred to the Supreme Court's decision in State of Madhya Pradesh v. Hiralal, which held that notices returned with remarks such as "house locked" or "shop closed" should be deemed served on the addressee. 3. Maintainability of the Application Filed by the Appellant under Section 9 of IBC: The Respondent argued that the application was not maintainable as the Appellant was not an "Operational Creditor." The Tribunal, however, concluded that the Appellant, being a proprietor of M/s Shree Marketing, qualifies as an "individual" under Section 3(23) of the IBC and is thus competent to file the application. The Tribunal also noted that the Appellant's claim was based on a consent decree, which crystallized the debt amount. 4. The Impact of a Consent Decree on the Status of Debt and Creditor: The Tribunal referred to several judgments, including those of the Madras High Court and the Supreme Court, to establish that a creditor holding a decree does not cease to be a creditor. It was observed that the consent decree dated 25.10.2018, which acknowledged the debt amount of ?7,50,000 and an additional penalty, is valid and enforceable. The Tribunal emphasized that the decree-holder, in this case, remains an "Operational Creditor" under the IBC. 5. Procedural Aspects and Requirements of Initiating CIRP: The Tribunal highlighted the procedural requirements under Section 9(3)(c) of the IBC, noting that these are directory in nature. It was concluded that insolvency proceedings can be initiated if a default in payment of debt is established. The Tribunal found that the Respondent had defaulted on the payment as per the consent decree, thus validating the initiation of CIRP. Conclusion: The Tribunal set aside the impugned order dated 8.6.2020 passed by the National Company Law Tribunal, New Delhi Bench, and allowed the appeal. The Tribunal held that the Appellant, as a decree-holder, qualifies as an "Operational Creditor" under the IBC and is entitled to initiate CIRP against the Respondent. The Tribunal directed the Appellant to file a certified copy of the impugned order within two weeks. No costs were awarded.
|
