2022 (9) TMI 138 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT - On perusal of record, it can be seen that the date of default has not been mentioned in the petition. According to section 3(11) of the Code, a debt means a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operational debt. Further, according to section 3(12), default means non-payment of debt when whole or any part or instalment of the amount of debt has become due and payable and is not paid by the Corporate Debtor. Therefore, in order to determine the date on which the cause of action arose, and the date from which the limitation would ensue, it is crucial to determine the date of default. In the instant matter, no date of default has been mentioned in the Form 5 of the petition. Further, the brief synopsis provided in the petition mentions that the last payment was made on 04.11.2016. in the absence of the date of default, the date of cause of action cannot be determined. Since the MOU has been used to establish the basis of the financial relation with the Corporate Debtor, the same cannot be used to support the claims of the petitioners who are not parties to the MOU. The Financial Creditors contention that the other financial creditors gave the money to the Corporate Debtor on behest of the said MOU, and at the request of Shri Shyam Sundar Poddar and Shri Sital Kumar Poddar, is untenable in absence of any document supporting the same - As an evidence of the same, the Corporate Debtor has provided the payment details which show that amounts equal to the principal sums lent by the Financial Creditors being Impex India Inc., S.K. Engineering, SRMB Ionic International, Bimal Jajodia, Deepti Poddar, Nirmala Poddar, Manju Lohia and Shyam Sundar Poddar (HUF) have been transferred by the Corporate Debtor. The Financial Creditors, in order to establish default of re-payment on part of the Corporate Debtor, have mentioned about various dishonoured cheques. All the cheques have been dated 02.09.2019 and are signed by Rajib Guha and Aloke Kumar Banerjee i.e directors of the Corporate Debtor - The issue of the validity and genuineness of the cheques, which are pivotal to establish default of the Corporate Debtor, can only be done in appropriate proceedings by leading evidence and not in summary proceedings under the Code. This Adjudicating Authority, therefore, is not satisfied that default on part of the Corporate Debtor is established. Further, in absence of an explicit date of default in the petition, the same is incomplete. As such, the instant petition is liable to be rejected.

Summary

Issues Involved:
1. Whether the Corporate Debtor defaulted on the financial debt owed to the Financial Creditors.
2. Whether the application under Section 7 of the Insolvency and Bankruptcy Code (IBC) is barred by limitation.
3. Whether the claims of the Financial Creditors other than the original parties to the Memorandum of Understanding (MOU) are tenable.
4. Validity and genuineness of the dishonoured cheques provided as evidence of default.

Issue-Wise Detailed Analysis:

1. Default on Financial Debt:
The Financial Creditors argued that a loan was given to the Corporate Debtor under an MOU dated 09.11.2013, with terms including a loan amount not exceeding Rs. 69,00,000/- and an interest rate of 18% per annum. The Corporate Debtor partially repaid the loan, but a principal amount of Rs. 21,04,561/- and interest remained unpaid. The Corporate Debtor contended that it was not a party to the MOU and had repaid the entire loan amount. The Tribunal found that the MOU did not bind the Corporate Debtor and that the petitioners who were not parties to the MOU could not claim the debt based on it.

2. Limitation:
The Tribunal noted that the date of default was not mentioned in the petition, which is crucial for determining the cause of action and the limitation period. According to the Hon'ble National Company Law Appellate Tribunal (NCLAT) decision in Meena V. Kothari vs. Maberest Hotels Pvt. Ltd., the application under Section 7 of IBC must be filed within three years from the date of default. The last payment was made on 04.11.2016, and the petition was filed on 03.09.2019, making it barred by limitation.

3. Claims of Other Financial Creditors:
The Tribunal observed that only Shri Shyam Sundar Poddar and Shri Sital Kumar Poddar were parties to the MOU, and their cumulative transfer to the Corporate Debtor was Rs. 90,000/-. The other petitioners, who were not parties to the MOU, could not support their claims with any document. Therefore, their claims were not tenable, and the claims of Shri Shyam Sundar Poddar and Shri Sital Kumar Poddar did not meet the minimum financial threshold under the Code.

4. Validity of Dishonoured Cheques:
The Financial Creditors provided dishonoured cheques dated 02.09.2019 as evidence of default. However, the Corporate Debtor argued that the cheques were issued as security in 2015 and were now used with mala fide intentions. The Tribunal stated that the validity and genuineness of the cheques could only be determined in appropriate proceedings and not in summary proceedings under the Code. Therefore, the dishonoured cheques could not be taken into account.

Conclusion:
The Tribunal concluded that the default on the part of the Corporate Debtor was not established, and the petition was incomplete due to the absence of an explicit date of default. Consequently, the petition was dismissed, but the Financial Creditors were free to pursue other legal remedies. The order was signed on 31st August 2022, and the registry was directed to send e-mail copies of the order to all parties and their counsel.