2020 (3) TMI 25 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - recovery of the unpaid Operational Debt du - HELD THAT - There seems to be pre-existing disputes among the parties for recovery of amount. As it is alleged that the Ex-Director of the Corporate Debtor Company, Mr.Babulal Mehta has colluded with the Petitioner and thus misused the Company's cheque in favour of the present Petitioner, which is a disputed question of facts and a debatable issue, which can be adjudicated before a Competent Civil Court - Hence, the present IB Petition is not maintainable.

Summary

Issues Involved:
1. Time-barred Debt
2. Legitimacy of the Debt
3. Pre-existing Dispute
4. Intention Behind Filing the Petition

Issue-wise Detailed Analysis:

1. Time-barred Debt:
The Petition was filed on 28.03.2018 under Section 9 of the Insolvency and Bankruptcy Code, 2016, for a claim of ?45,09,810.60, which includes ?21,52,864.60 towards the principal and ?23,56,946.00 towards interest. The Operational Creditor declared the date of default as 02.11.2011 and 10.11.2011 for different invoices. The Respondent contended that the debt is time-barred as the demand notice was sent on 08.12.2017, more than six years after the due date, exceeding the three-year limitation period stipulated by law. The Tribunal observed that the limitation period expired on 31.03.2016, making the petition time-barred.

2. Legitimacy of the Debt:
The Respondent argued that the debt claimed by the Applicant is not legally enforceable and alleged that the invoices were already paid in 2015 via set-off from Munis Forge Limited and Swastik Lloyds Engineering Pvt. Ltd. The Respondent also claimed that the cheque and acknowledgment of debt letter were fabricated documents, and the ex-director of the Respondent company had colluded with the Applicant. The Tribunal noted that the cheque purportedly issued on 15.09.2015 belonged to a cheque book series issued in 2016, supporting the Respondent's claim of fabrication. Additionally, the balance sheet for the year ending 31.03.2015 did not show any outstanding payable to the Operational Creditor, further questioning the legitimacy of the debt.

3. Pre-existing Dispute:
The Respondent highlighted a pre-existing dispute, noting that the Operational Creditor had lodged a criminal complaint against the management of the Corporate Debtor for the same transactions. The Tribunal observed that there were pre-existing disputes among the parties, including allegations of collusion and misuse of the company’s cheque by the ex-director. The Tribunal referred to the Hon'ble Supreme Court's decision in Mobilox Innovations (P.) Ltd. v. Kirusa Software (P.) Ltd., which states that the existence of a pre-existing dispute makes the IB Petition not maintainable.

4. Intention Behind Filing the Petition:
The Tribunal noted that the Operational Creditor's intention was not for the resolution of the Corporate Debtor but for recovery, which is not the objective of filing an application under Section 9 of the Insolvency and Bankruptcy Code, 2016. The Tribunal concluded that the petition was filed with a mala fide intention to recover the debt rather than to resolve the insolvency of the Corporate Debtor.

Conclusion:
The Tribunal dismissed the application on the grounds that the petition is time-barred and the intention of the Operational Creditor is not for resolution but for recovery. The case CP(IB) No. 171/9/NCLT/AHM/2018 was disposed of with no costs.