2022 (7) TMI 828 - Tri - Insolvency and Bankruptcy

Maintainability 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 - The Operational Creditor has not been able to make out any case for admission of this petition. Petition dismissed.

Summary

Issues Involved:
1. Validity and enforceability of the Memorandum of Understanding (MoU).
2. Entitlement of the Operational Creditor to the claimed commission.
3. Admission of debt by the Corporate Debtor.
4. Compliance with the terms of the Insolvency and Bankruptcy Code, 2016.

Detailed Analysis:

1. Validity and Enforceability of the Memorandum of Understanding (MoU):
The Operational Creditor and the Corporate Debtor executed a MoU on 01.06.2018 to collaborate on generating business opportunities for the Corporate Debtor's goods in a specific project. The MoU stipulated that sales should be made through the Corporate Debtor or its related companies. Clause 2 required the Corporate Debtor to keep the Operational Creditor informed about any leads for enquiries. Clause 3 specified that the Corporate Debtor would pay a 10% commission on sales to the Operational Creditor.

2. Entitlement of the Operational Creditor to the Claimed Commission:
The Operational Creditor claimed that a commission of 10% on sales amounting to Rs. 12,65,00,000/- was due, totaling Rs. 1,26,50,000/-. The Corporate Debtor admitted to a supply of Rs. 12,65,00,000/- but offered only 5% commission due to the low margins from the awarded party, Niveshan Technologies Private Limited, which was unrelated to Shapoorji Pallonji. The Corporate Debtor argued that the MoU did not cover sales to parties other than Shapoorji Pallonji and that the Operational Creditor had no role in securing the order from Niveshan Technologies.

3. Admission of Debt by the Corporate Debtor:
The Operational Creditor relied on an email dated 20.02.2019 from the Corporate Debtor's Director, acknowledging a supply amounting to Rs. 12,65,00,000/- and offering a 5% commission. The Corporate Debtor contended that this offer was made in good faith and without prejudice, and it did not constitute an admission of liability under the MoU. The Corporate Debtor also paid Rs. 10 lakhs as a goodwill gesture, not as an admission of debt.

4. Compliance with the Terms of the Insolvency and Bankruptcy Code, 2016:
The Operational Creditor issued a Demand Notice under Section 8 of the Insolvency and Bankruptcy Code, 2016, on 07.09.2019, which the Corporate Debtor disputed. A fresh Demand Notice was issued on 12.10.2020, to which the Corporate Debtor again denied the claim. The petition filed by the Operational Creditor was dismissed as it failed to demonstrate a cause of action under the MoU, and the claim was found to be contrary to the terms of the MoU, which restricted commission to sales made to Shapoorji Pallonji.

Conclusion:
After examining the petition, reply affidavit, and hearing the arguments, the Tribunal concluded that the Operational Creditor had not made a case for the admission of the petition. The petition was dismissed, and a certified copy of the order was directed to be issued to all concerned parties upon compliance with requisite formalities.

Order signed on the 13th day of July, 2022.