2020 (10) TMI 485 - Tri - Insolvency and Bankruptcy

Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT - The case of Petitioner in the Affidavit is that as per MoU entered with Corporate Debtor, the flats sold to the Operational Creditor should be completed and to be delivered to the Operational creditor within 6 months. However, the Corporate Debtor failed to complete the construction of the four flats and failed to deliver the same to the Operational Creditor. So, the contention of the Operational Creditor is that it is ready to give up the flats and also for cancellation of sale deeds and wanted the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. Already Civil Suit was filed for specific performance to complete the construction of the flats and delivery of the same and the said civil suit is pending. It is undisputed fact that the amount due by the Corporate Debtor to the Operational Creditor was settled by entering into MoU and by executing four registered sale deeds in respect of four flats. Thus, parties entered into settlement with regard to the amount payable in respect of supply of TMT bars covered by the invoices. Even otherwise, the stand taken by the Corporate Debtor that in respect of the first six invoices shown in the table supra the amount was paid and remaining four invoices was subject matter of MoU. Thus, the contention of the Corporate Debtor that there is no operational debt due to the Petitioner by the Corporate Debtor. Some settlement took place between parties and disputes arose over settlement and civil suit was also filed against the Corporate Debtor and it is pending. Prior to filing of the present petition already Operational Creditor approached civil court. Secondly, Operational creditor earlier filed CP (IB) No. 124/9/HDB/2017 under Section 9 of IBC against Corporate Debtor and the same was withdrawn. Thirdly, the invoices referred are of the year 2013 whereas the present petition is filed in the year 2019. The limitation to proceed against invoices is three years from the date of raising of invoices. The invoices are barred by limitation by the date when the present petition is filed under Section 9. Article 137 of the Limitation Act is applicable to the present facts of the case - the petition filed under Section 9 of IBC is liable to be rejected on the ground that there was prior dispute and further the invoices are barred by limitation. Petition dismissed.

Summary

Issues Involved:
1. Non-payment of outstanding dues by the Corporate Debtor.
2. Existence of a pre-existing dispute.
3. Settlement of dues through transfer of property.
4. Limitation period for filing the petition.

Detailed Analysis:

Non-payment of Outstanding Dues by the Corporate Debtor:
The Petitioner, M/s. Binjusaria Ispat Private Limited, supplied Grip TMT bars to the Respondent, M/s. Janapriya Engineers Syndicate Private Limited, and raised invoices totaling ?1,46,78,361, which includes a principal amount of ?1,00,73,925 and interest of ?46,04,436 at 24% per annum. Despite reminders, the Respondent failed to make the payment. The Petitioner sought the initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016.

Existence of a Pre-existing Dispute:
The Respondent contested the petition, arguing that the claim was settled through an agreement and transfer of four flats. The Respondent highlighted that a similar petition (CP (IB) No. 124/2017) was previously withdrawn by the Petitioner, acknowledging the settlement. Additionally, a civil suit (OS No. 111/2017) for specific performance of the contract concerning the flats is pending, indicating a pre-existing dispute.

Settlement of Dues through Transfer of Property:
The Respondent argued that the dues were settled through the transfer of four flats valued at ?1,29,46,000, as per a Memorandum of Understanding (MoU) executed in January 2015. The MoU and sale deeds indicated a full and final settlement of the dues. The Respondent also claimed to have paid the difference amount of ?2,54,000 through a cheque, which was reflected in their bank statement.

Limitation Period for Filing the Petition:
The invoices in question were raised in 2013, and the petition was filed in 2019. The tribunal noted that the limitation period for enforcing such claims is three years from the date of the invoices, making the petition time-barred under Article 137 of the Limitation Act.

Conclusion:
The tribunal dismissed the petition on the grounds of a pre-existing dispute, settlement through property transfer, and the claim being time-barred. The tribunal emphasized that the operational debt was settled through the MoU and the transfer of flats, and the pending civil suit further indicated a pre-existing dispute. Additionally, the petition was filed beyond the three-year limitation period, rendering it inadmissible.