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2022 (3) TMI 198 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Debt - admission of debt or existence of dispute - existence of debt and dispute or not - whether the Appellant has filed sufficient documents to establish whether the amounts claimed in Part IV of Form 5 of the Application, are due and payable ? - HELD THAT - There are force in the contention of the Learned Counsel for the Respondent Company that the Forensic Report filed by the Appellant herein has been obtained by them without taking the permission of the Adjudicating Authority. It is the case of the Appellant that the Respondent Company has taken different stands i.e., in their Reply to the Demand Notice dated 14/11/2019, the Respondent has submitted that the amount claimed is a Security Deposit and pertains to the Leave and License Agreement. But in their Rejoinder to the Reply dated 08/01/2020, they have denied the same. The Respondent also denies that there was any supply of goods and services between the Appellant and the Respondent. The amounts pertaining to 37 invoices have been paid by the Respondent. The same amounts reflect in Part IV of Form 5 of the Application claiming ₹ 4,16,48,466/-and ₹ 7,76,706/-. The delayed payment charges sought to be paid by the Appellant are not supported by any Agreement executed between the parties, based on which the Appellant could have exercised their rights to claim these amounts towards delayed charges. The interest charged towards penalty does not find a mention in any of the 37 invoices which are on record. The Journal Entries not supported by any other additional evidence cannot be solely relied upon to prove that the amount claimed arises out of supply of goods and services to fall within the ambit of the definition of Operational Debt as defined under Section 5(21) of the Code. Further we are inclined to observe that the dishonour of the two cheques is a subject matter of the NI Act, 1881 and recovery of those amounts under the NI Act, 1881 cannot be said to be paid towards the supply of goods and services, specifically in the light of the absence of any such Agreement or invoices to that effect. The Appellant has already initiated steps under Section 138/141 of the NI Act, 1881 and submits that the ratio of Sudhi Sachdev 2018 (11) TMI 1671 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI is applicable to the facts of this case, as it relates to Admission of debt and not an existence of dispute . The issue in this case is not whether there is an Admission of debt or existence of dispute but whether in the absence of any sufficient evidence on record that the amounts claimed are in respect of the provision of goods and services including employment or a debt in respect of (payment) of dues arising under any law for the time being in force and payable to the Central Government, any State Government or any local authority as defined under Section 5(21) of the Code - there is no sufficient evidence on record to prove that any kind of Operational Debt is due and payable . Therefore, there are no substantial grounds to interfere with the well-considered Order of the Adjudicating Authority. Appeal dismissed.
Issues Involved:
1. Whether the amounts claimed by the Appellant are "due and payable" as an "Operational Debt" under the Insolvency and Bankruptcy Code, 2016. 2. Whether the letters dated 15/05/2019, 30/05/2019, and 01/07/2019 constitute an acknowledgment of debt. 3. Validity and relevance of the Forensic Report submitted by the Appellant. 4. Whether the dishonor of cheques constitutes an operational debt. 5. Whether the Appellant provided sufficient documentary evidence to substantiate the claim of operational debt. Issue-wise Detailed Analysis: 1. Whether the amounts claimed by the Appellant are "due and payable" as an "Operational Debt" under the Insolvency and Bankruptcy Code, 2016: The Appellant claimed that the Respondent owed them an operational debt based on the supply of steel materials and delayed payment charges. However, the Adjudicating Authority found that the Appellant failed to provide supporting invoices or documentary evidence for the claimed amounts such as delay charges, khalapur expenses, and travel charges. The 37 invoices provided by the Appellant did not mention payment terms, and only one invoice referred to a delay of 365 days. The Bench concluded that there was no outstanding operational debt as all invoices had been fully paid, and additional claims were unsubstantiated and frivolous. 2. Whether the letters dated 15/05/2019, 30/05/2019, and 01/07/2019 constitute an acknowledgment of debt: The Appellant argued that these letters acknowledged a liability of ?4,16,18,466 and ?7,76,706. However, the Respondent denied the authenticity of these letters, claiming they were forged and fabricated. The Adjudicating Authority noted that the Appellant's forensic report was obtained without permission and thus could not be relied upon. The Tribunal held that mere acknowledgment in these letters does not establish an operational debt as defined under Section 5(21) of the Code. 3. Validity and relevance of the Forensic Report submitted by the Appellant: The Appellant submitted a forensic report to prove the authenticity of the letters. However, the Tribunal found that the report was obtained without the Adjudicating Authority's permission and thus could not be considered valid evidence. The Tribunal emphasized that the Appellant failed to provide sufficient documentary proof to substantiate the claim of an operational debt. 4. Whether the dishonor of cheques constitutes an operational debt: The Appellant contended that the dishonored cheques issued by the Respondent indicated an operational debt. However, the Tribunal noted that the dishonor of cheques is a matter under the Negotiable Instruments Act, 1881, and does not necessarily relate to any outstanding operational debt. The Tribunal further observed that the Appellant had already initiated proceedings under Section 138/141 of the NI Act, 1881, and the dishonored cheques did not prove the existence of an operational debt. 5. Whether the Appellant provided sufficient documentary evidence to substantiate the claim of operational debt: The Tribunal found that the Appellant did not provide adequate evidence to prove the existence of an operational debt. The Appellant's claim was based on journal entries and alleged acknowledgments of debt, which were not supported by invoices or any agreement between the parties. The Tribunal concluded that the Appellant failed to establish that the amounts claimed were in respect of the provision of goods and services, as required under Section 5(21) of the Code. Conclusion: The Tribunal dismissed the Appeal, concluding that the Appellant failed to provide sufficient evidence to prove the existence of an operational debt. The Tribunal upheld the Adjudicating Authority's decision, emphasizing that mere acknowledgment of liability does not constitute an operational debt under the Insolvency and Bankruptcy Code, 2016. The Tribunal directed the Registry to upload the Judgment on its website and send a copy to the National Company Law Tribunal, Mumbai Bench.
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