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2020 (8) TMI 382 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - pre-existing dispute or not - Dishonor of cheque - grievance of the Appellant is that the said application was filed before the Adjudicating Authority despite the fact that Section 8(1) Demand Notice was not delivered to it and there was a pre-existing dispute in the matter - HELD THAT - In the present case, the 1st Respondent / Operational Creditor has come out with the plea that the letters dated 2.7.2016, 27.7.2016,25.08.2016 and 27.01.2016 are believed to be false and they are concocted, fabricated and manufactured for the purpose of this case to take an illegal defense. Further, the 1st Respondent / Operational Creditor has taken a stand that the signatures and the Company s seal on the letter / reply dated 27.7.2016 was fabricated by the Corporate Debtor . Therefore, this Tribunal is of the considered view that the plea of the 1st Respondent / Operational Creditor that the alleged forged letters were created in a single night for taking an illegal defense of dispute and the Corporate Debtor is liable to be tried for perjury can be pleaded / agitated before the Competent Forum. The 1st Respondent / Operational Creditor had accepted the payments of ₹ 4,51,84,594/- in respect of supplies and full and final payment of ₹ 12/- lakhs on 17.5.2017. No tangible / substantial material / evidence is produced on the side of the Appellant to show that it was a final payment in full quit and nothing remains to be paid by the 2nd Respondent/ Corporate Debtor. Therefore, this Tribunal negatives the plea of the matter had been settled and no sum remains to be paid by the 2nd Respondent / Corporate Debtor to the 1st Respondent/Operational Creditor other than the purported full and final payment of ₹ 12 lakhs made on 17.5.2017. Dishonor of Cheques - HELD THAT - The 1st Respondent / Operational Creditor had initiated Proceedings under Section 138 of the N I Act, 1881 against the Corporate Debtor . Although, the Appellant has taken a plea that these cheques were issued by the Corporate Debtor for some other project and not for the project concerning the subject matter in issue, the same is not established by the Appellant to the subjective satisfaction of this Tribunal. If a Debt is due and payable one to the Operational Creditor by the Operational Debtor then the said Debtor will squarely come within the purview of the ingredients of the definition of Section 5(21) of the Code. In a given case, if it is exhibited that there is a clear default of minimum of ₹ 1/- Lakh, then the dispute in regard to quantum of the amount claimed can not be an hindrance in admitting an Application/ Petition filed either under Section 7 or 9 of the I B Code - The aspect of Addition of Parties in a given proceeding is within the exclusive domain of a concerned Court/ Tribunal. A party/ parties are not to be added /arrayed as parties in a given application to introduce a fresh/new cause of action. In as much as the 2nd Respondent / Corporate Debtor had committed default as per definition Section 3(12) of the Code which defines default and in spite of notice the 2nd Respondent had failed to effect the payments due to 1st Respondent / Operational Creditor and an amount of ₹ 61,24,637/- was due as on date of filing of the application before the Adjudicating Authority coupled with interest @ 24% p.a., this Tribunal without any haziness comes to a consequent conclusion that the view arrived at by the Learned Adjudicating Authority that the 2nd Respondent/Corporate Debtor had committed default and ultimately admitting the application filed by the 1ST Respondent/ Operational Creditor is free from any legal infirmities - Resultantly, the present Appeal fails and the same is accordingly dismissed but without costs. Appeal dismissed.
Issues Involved:
1. Admission of Section 9 application. 2. Existence of pre-existing dispute. 3. Service of Demand Notice. 4. Validity of payments and alleged full and final settlement. 5. Dishonour of cheques and related proceedings. 6. Claims and expenses in Corporate Insolvency Resolution Process (CIRP). 7. Rights and grievances of Home Buyers and Financial Creditors. Detailed Analysis: 1. Admission of Section 9 Application: The National Company Law Tribunal (NCLT) admitted the Section 9 application filed by the Operational Creditor against the Corporate Debtor. The Tribunal observed that the Corporate Debtor had procured goods from the Operational Creditor, acknowledged receipt, and defaulted on payment of ?61,24,637/-. This constituted an operational debt under Section 5(21) of the Insolvency and Bankruptcy Code (IBC). 2. Existence of Pre-existing Dispute: The Appellant argued that there was a pre-existing dispute regarding the quality of goods supplied, evidenced by letters dated 2.7.2016, 27.7.2016, 25.08.2016, and 27.01.2017. However, the Tribunal found these letters to be fabricated and created solely for the purpose of the case. The Operational Creditor had not raised any dispute regarding the materials for over nine months, indicating that the dispute was concocted. 3. Service of Demand Notice: The Appellant contended that the Demand Notice under Section 8 was not properly served. The Tribunal, however, held that the notice was deemed to be properly served as it was tendered by the postman but refused by the Corporate Debtor. The Tribunal referred to the Supreme Court's decision in Gujarat Electricity Board vs. Atmaram Sungomal Poshani, which establishes that refusal to accept notice constitutes proper service. 4. Validity of Payments and Alleged Full and Final Settlement: The Appellant claimed that payments amounting to ?4,51,84,594/- had been made, and a full and final settlement of ?12 lakhs was completed on 17.5.2017. The Tribunal found no substantial evidence to support this claim and noted that the issuance of cheques amounting to ?6 lakhs on 22.11.2018 contradicted the claim of full and final settlement. 5. Dishonour of Cheques and Related Proceedings: The Operational Creditor initiated proceedings under Section 138 of the Negotiable Instruments Act, 1881, due to the dishonour of three cheques amounting to ?6 lakhs. The Appellant's claim that these cheques were for another project was not substantiated. 6. Claims and Expenses in CIRP: The Interim Resolution Professional (IRP) verified claims amounting to ?24,37,11,263/- from Financial Creditors and Operational Creditors. The IRP incurred expenses of ?6,98,007/- for conducting the CIRP. The suspended Board of Directors failed to provide requisite information, hindering the resolution process. 7. Rights and Grievances of Home Buyers and Financial Creditors: Intervenors, who were Home Buyers and Financial Creditors, sought to implead themselves, arguing that their interests would be impaired. The Tribunal referred to its earlier decision in Flat Buyers Association Winter Hills – 77, Gurgaon vs. Umang Realtech Pvt. Ltd., emphasizing that CIRP should be project-specific. The intervenors were advised to seek relief from the Resolution Professional or Competent Forum. Conclusion: The Tribunal dismissed the appeal, upholding the NCLT's decision to admit the Section 9 application. The Tribunal found no legal infirmities in the NCLT's order, confirming that the Corporate Debtor had committed a default. The intervenors' application was not entertained, and they were directed to seek recourse before the Resolution Professional or Competent Forum. The Resolution Professional was permitted to claim fees and expenses incurred during the CIRP.
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