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TMI Blog2018 (7) TMI 1633X X X X Extracts X X X X X X X X Extracts X X X X ..... willingness to pay stand established which was followed by issuance of a demand notice. Therefore, acknowledgement of debt is established by executing the tripartite agreement. The default has also been established on account of issuance of cheques and its non-payment has also been established. Therefore, it cannot be argued that default has not occurred. The expression default within the meaning of Section 3(12) of the Code has been defined to mean non-payment of debt when whole or any part of the amount of debt has become due and payable and is not paid by the Corporate Debtor. If this cannot be regarded as default what else could be so regarded. Argument that the notice of demand has been served only on the Director would also lack substance as Rule 5(2)(b) of the Rules clearly postulates that demand notice or the copy of the invoice demanding payment may be delivered to the Corporate Debtor by electronic mail service to a whole time Director or designated partner etc. Once the demand notice was served on the Director then the requirement of the Rules stands satisfied. Under Section 20 of the Companies Act, 2013 read with Section 27 of the General Clauses Act such a servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... illary equipments. In other words, the agreement between the Operational Creditor and Monnet Ispat was for supply of goods and services. Accordingly, the Operational Creditor had made huge advances to Monnet Ispat for the construction of power plant and supply of ancillary equipments. When the needful was not done by Monnet Ispat the Operational Creditor vide its letter dated 06.04.2014 sent a request to Monnet Ispat to refund the advance amount of ₹ 30/- crores. In reply Monnet Ispat on 20.05.2014 had stated that the refund of ₹ 30/- crores could be made after the payments are received from the Corporate Debtor. It is pertinent to mention that Corporate Debtor owed ₹ 80/- crores to Monnet Ispat as per the assertion of the Operational Creditor. Accordingly, Monnet Ispat agreed to discharge its debt of ₹ 30/- crores towards Operational Creditor. It was thus agreed and confirmed that out of ₹ 80/- crores owed by Corporate Debtor to Monnet Ispat the debt of ₹ 30/- crores stood assign in favour of the Operational Creditor reducing the debt of the Corporate Debtor to Monnet Ispat to that extent. In other words, it was agreed that the Corporate Debtor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f debt inter se between the Second and Third Party and all the parties to this Agreement shall adhere to the terms of this Tripartite Agreement. IN WITNESS WHEREOF the parties herein have signed the agreement in acceptance of all terms stated above on the date and place mentioned hereinabove. FIRST PARTY SECOND PARTY THIRD PARTY For THE INDURE PRIVATE LIMITED For Monnet Ispat Energy Ltd. For B.K. Coal Fields Pvt. Ltd. Authorised Signatory Authorised Signatory Authorised Signatory 6. It is pertinent to notice that the parties have been described as confirming party denoting the applicant herein, second party denoting Monnet Ispat and third party denoting the B.K. Coal Fields Private Limited-Corporate Debtor. Accordingly, the Corporate Debtor has conceded, being second party that the debt of ₹ 30/- crores which it owed to Monnet Ispat (second party) shall be assigned to the Operational Creditor. 7. In pursuance of tripartite agreement, the Corporate Debtor vide its let ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le/due as required by Section 8 read with Section 3(12) of the Code. According to Section 3(12) of the Code the expression default means non-payment of debt when whole or any part of the amount of debt has become due and payable and is not repaid by the debtor or the Corporate Debtor. Likewise, Section 8 of the Code has given a right to an Operational Creditor to initiate action by issuing demand notice on the occurrence of a default. Therefore, it has been maintained that no default has been established by giving the date when the debt has become due and payable. The last objection raised by the Corporate Debtor is that service of notice of demand on the Director is no service and the application being defective must be dismissed as incomplete. 10. The applicant has filed rejoinder reiterating the averments made in the application and denying the objection raised by the Corporate Debtor. 11. Having heard the learned counsel for the parties we are of the considered view that the instant application is meritorious and warrants admission. The relationship between the Operational Creditor and Corporate Debtor has been established with the correspondence initiated by Monnet Is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed by issuance of a demand notice. Therefore, acknowledgement of debt is established by executing the tripartite agreement. The default has also been established on account of issuance of cheques and its non-payment has also been established. Therefore, it cannot be argued that default has not occurred. The expression default within the meaning of Section 3(12) of the Code has been defined to mean non-payment of debt when whole or any part of the amount of debt has become due and payable and is not paid by the Corporate Debtor. If this cannot be regarded as default what else could be so regarded. 13. Mr. Sibal has resisted the admission of the application on the ground that the tripartite agreement has not been sufficiently stamped as per the requirement of Schedule IA, Article 11 of the Indian Stamp Act and that it was required to be registered under Section 17 of the Registration Act. The aforesaid argument would not be acceptable in view of the submission made by learned counsel for the applicant that Article 11 of Schedule IA and the notification dated 26.02.2009 would not be applicable to the tripartite agreement dated 27.05.2015 as the tripartite agreement does not pertai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. 17. We also declare moratorium in terms of Section 14 of the Code. A necessary consequence of the moratorium flows from the provisions of Section 14(1)(a), (b), (c) (d) and thus the following prohibitions are imposed which must be followed by all and sundry: (a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; (b) transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein; (c) any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; (d) the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor. 18. It is made clear that the provisions of moratorium shall ..... X X X X Extracts X X X X X X X X Extracts X X X X
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