2019 (9) TMI 361 - Tri - IBC

Maintainability of application - Initiation of Corporate Insolvency Resolution Process - Existence of debt due from Corporate Debtor or not - section 7 of Insolvency Bankruptcy Code, 2016 - HELD THAT - This Adjudicating Authority does not have the requisite power to determine the disputed question of fact that could establish the existence of the debt in this case. Therefore, in the facts and circumstances and as per the judgement of Hon ble Supreme Court in Innoventive Industries Ltd. vs ICICI Bank and Ors., 2017 (9) TMI 58 - SUPREME COURT , as the Petitioner could not prove the existence of debt due from the Corporate Debtor, this Petition cannot be admitted. Petition rejected.

Summary

Issues involved:
Petition under section 7 of Insolvency & Bankruptcy Code, 2016 for initiating Corporate Insolvency Resolution Process (CIRP) based on debt default and compensation claim for delay in possession of flat by the Corporate Debtor.

Analysis:

Issue 1: Debt Default and Compensation Claim
The Petitioner filed a petition under Section 7 of the I&B Code against the Corporate Debtor for defaulting on a debt of ?20,44,336 since 31.12.2016. The Petitioner claimed compensation for delay in possession of the flat, alleging changes in possession dates without disclosure. The Respondent argued that possession was offered within the grace period as per the Agreement to Sell, denying the existence of any debt or default.

Issue 2: Disputed Facts and Legal Provisions
The Petitioner alleged non-disclosure of changes in possession dates and grace periods in the Agreement to Sell, seeking compensation. The Respondent relied on the latest Agreement to Sell, stating possession was offered within the agreed timeline. The Adjudicating Authority noted that the compensation claimed lacked legal or contractual basis and disputed facts regarding possession dates were crucial in determining debt existence.

Issue 3: Judicial Precedents and Authority
The Adjudicating Authority cited the decision in Asset Reconstruction Company vs GPT Steel Industries, emphasizing that I&B Code proceedings are not recovery suits but must adhere to procedural rules and timelines. Referring to the Supreme Court judgment in Innoventive Industries Ltd. vs ICICI Bank, the Authority highlighted its limited power to resolve disputed factual questions in debt matters.

Conclusion:
Considering the lack of evidence to prove the existence of debt and the disputed facts regarding possession dates, the Petition under Section 7 of the I&B Code was rejected. The Petitioner was granted liberty to file the claim before the appropriate authority separately. The Adjudicating Authority emphasized adherence to procedural rules and timelines, directing immediate communication of the order to both parties for compliance.