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2020 (9) TMI 894 - Tri - IBCMaintainability of application - initiation of CIRP- Corporate Debtor failed to make repayment of dues - recovery of alleged outstanding dues - appropriate forum or not - time limitation - HELD THAT - It is settled position of law, that the provisions of the Code cannot be invoked for recovery of alleged outstanding amount, that too, after long lapse of time, without explaining the delay caused. The Hon'ble Supreme Court in the case of Mobilox Innovations Private Limited vs. Kirusa Software Private limited 2017 (9) TMI 1270 - SUPREME COURT , has inter-alia, held that IBC, 2016 is not intended to be substitute to a recovery forum - It is not in dispute that the Petitioner has received part payment and the instant Petition is filed to recover the balance amount which is against the object of the Code and the Law. The instant Company Petition is filed with an intention to recover the alleged outstanding due, which is not permissible under law - Moreover, the Petitioner has not explained the reasons for delay for issuing the Demand Notice belatedly i.e. 24.10.2019, and filing this instant Application only on 10th February 2020, even though the Demand Notice specifically mentioned that the Respondent has to pay the outstanding due or to raise the dispute, within a period of 10 days from the date of receipt copy of Demand Notice. It is not in dispute that law of limitations is applicable to the provisions of the Code - Therefore the instant Petition is not maintainable either on facts and or law and thus it is liable to be dismissed. Petition dismissed.
Issues Involved:
Initiation of Corporate Insolvency Resolution Process under Section 9 of the IBC based on default in payment. Detailed Analysis: Issue 1: Default in Payment and Initiation of CIRP The case involved a petition filed by an Operational Creditor seeking to initiate Corporate Insolvency Resolution Process (CIRP) against a Corporate Debtor for defaulting on a total amount of ?2,29,944 along with interest. The Operational Creditor provided logistic services to the Corporate Debtor, and despite issuing a demand notice, the outstanding amount remained unpaid. The Operational Creditor filed the petition under Section 9 of the IBC, 2016, seeking recovery of the due amount. Issue 2: Legal Interpretation of Delay and Recovery The Tribunal analyzed the facts presented, including the part payments made by the Corporate Debtor and the delay in issuing the demand notice. The Tribunal referred to the Supreme Court's ruling in Mobilox Innovations Private Limited vs. Kirusa Software Private limited, emphasizing that the IBC is not intended as a substitute for a recovery forum. The Tribunal highlighted that invoking the provisions of the Code for recovery, especially after a significant delay without proper explanation, goes against the purpose of the law. Issue 3: Maintainability of the Petition After careful consideration, the Tribunal concluded that the petition was primarily aimed at recovering the alleged outstanding amount, which was not permissible under the law. The Tribunal noted that the Operational Creditor failed to provide a valid explanation for the delay in issuing the demand notice and filing the application. Additionally, the Tribunal pointed out that the law of limitations applies to the provisions of the Code. As a result, the Tribunal held that the petition was not maintainable either on factual or legal grounds and dismissed it. However, the Tribunal clarified that the dismissal of the petition did not prevent the Petitioner from seeking other legal remedies available under different laws to recover the outstanding amount due from the Respondent. In conclusion, the Tribunal dismissed the petition as not maintainable, highlighting the importance of timely action and adherence to legal principles in invoking the provisions of the Insolvency and Bankruptcy Code for recovery purposes.
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