2022 (9) TMI 1163 - 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 - primary defence raised by the Corporate Debtor is that the Corporate Debtor made payments to the Operational Creditor for the months of January 2018, February 2018 and March 2018 (until 21st March) and further paid other dues - HELD THAT - On a plain reading of the Non-Disclosure Agreement, it is clear that the Corporate Debtor had agreed to make two payments as mentioned in Clause 2 (e) and Clause (i). There is nothing to suggest any connection of 2 (e) with Clause (i). Whereas it is construed that clause 2 (i) is in reference to clause 1 (a) and thus the same has been discharged with. Hence, the payment made for the months of February and March, 2018 cannot be construed to be in discharge of the liabilities rising out of Clause 2 (e). Thus, the Corporate Debtor has failed to comply with the terms of Clause 2 (e) of the Agreement and has committed default. The application made by the Operational Creditor is complete in all respects as required by law. It clearly shows that the Corporate Debtor is in default of a debt due and payable, and the default is in excess of minimum amount stipulated under section 4(1) of the IBC. Therefore, the default stands established and there is no reason to deny the admission of the Petition. In view of this, this Adjudicating Authority admits this Petition and orders initiation of CIRP against the Corporate Debtor. Petition admitted - moratorium declared.

Summary

Issues Involved:
1. Jurisdiction of the Tribunal
2. Default in Payment by Corporate Debtor
3. Non-Disclosure Agreement (NDA) Obligations
4. Penalty Clause Interpretation
5. Initiation of Corporate Insolvency Resolution Process (CIRP)
6. Moratorium and Management during CIRP

Issue-wise Detailed Analysis:

1. Jurisdiction of the Tribunal:
The Tribunal confirmed its jurisdiction to entertain the petition since the Corporate Debtor is incorporated under the Companies Act, 1956, with its registered office in Mumbai, falling under the Tribunal's jurisdiction.

2. Default in Payment by Corporate Debtor:
The Operational Creditor claimed a total debt amount of Rs.43,00,000/- due to non-payment of salary and NDA consideration. Despite repeated requests and several e-mails, the Corporate Debtor failed to pay the gross sum of Rs.3,00,000/- and the penalty amount of Rs.40,00,000/- as per the NDA.

3. Non-Disclosure Agreement (NDA) Obligations:
The Operational Creditor resigned on 22.01.2018 and entered into an NDA with the Corporate Debtor. The Corporate Debtor agreed to pay Rs.1,50,000/- towards notice of discharge and Rs.1,50,000/- as consideration for the NDA. However, these payments were not made, leading to a claim of default.

4. Penalty Clause Interpretation:
The Corporate Debtor contested the penalty claim of Rs.40,00,000/- under Clause 2(f) of the NDA, arguing it was for violating confidentiality covenants, not for delayed gratuity payments. The Tribunal found that the Corporate Debtor misinterpreted the penalty clause and had failed to comply with Clause 2(e) of the NDA.

5. Initiation of Corporate Insolvency Resolution Process (CIRP):
The Tribunal found the application complete and noted that the Corporate Debtor defaulted on a debt exceeding the minimum amount stipulated under section 4(1) of the IBC. Consequently, the Tribunal admitted the petition and ordered the initiation of CIRP against the Corporate Debtor.

6. Moratorium and Management during CIRP:
The Tribunal ordered a moratorium under section 14 of the IBC, prohibiting:
a. Institution or continuation of suits or proceedings against the Corporate Debtor.
b. Transfer or disposal of the Corporate Debtor's assets.
c. Actions to foreclose or enforce security interests.
d. Recovery of property occupied by the Corporate Debtor.

During the moratorium, the supply of essential goods or services shall not be interrupted. The management of the Corporate Debtor will vest in the Interim Resolution Professional (IRP), Mr. Pankaj Ramandas Majithia, who will carry out functions as per sections 15, 17, 18, 19, 20, and 21 of the IBC. The Operational Creditor must deposit Rs.3,00,000/- with the IRP for expenses related to public notice and claim invitations.

Conclusion:
The Tribunal admitted the petition for initiating CIRP against the Corporate Debtor, imposed a moratorium, and appointed an IRP to manage the Corporate Debtor's affairs during the CIRP period. The Registry was directed to communicate the order to relevant parties and update the Corporate Debtor's master data.