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TMI Blog2019 (5) TMI 670X X X X Extracts X X X X X X X X Extracts X X X X ..... laches and limitation apart veracity of claim itself. Moreover, the MoU dated 14.01.2013 in question, itself contained several terms and conditions to claim any bills as detailed supra. Therefore, disputed issues cannot be gone into the proceedings in summary proceedings like instant proceedings initiated under the Code. The instant Company Petition is not only barred by laches and limitations and then there is a substantial dispute raised by the Respondent. It is a settled position of law that the provisions of Code cannot be invoked for recovery of outstanding amount but it can be invoked to initiate CIRP for justified reasons as per the Code - The Hon'ble Supreme Court in the case of Mobilox Innovations (P.) Ltd. [ 2017 (9) TMI 1270 - SUPREME COURT ] , has inter alia, held that IBC, 2016 is not intended to be substitute to a recovery forum. Thus the claim in question itself is disputed and the same is also barred by laches and limitations, and the Petition is filed with intention to recover the alleged outstanding amount and thus it is liable to be rejected - petition dismissed. - C.P.(IB) NO. 145/BB/2017 - - - Dated:- 21-3-2019 - SHRI RAJESWARA RAO VITT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icials of UBL and for the purpose of recording the understanding and intention of the parties, both SDBL an UBL entered into an agreement dated 14.01.2003 ( Agreement ) for the purpose of production and bottling of beer by SDBL under UBL's Trademark for the initial period of three years. (5) Further, in the year 2006, UBL approached SDBL and once again requested the officials of SDBL to renew the Agreement. Based on such representations and inducements of UBL officials, the Agreement got renewed till 31.03.2007 vide letter dated 13.01.2006 and thereupon was subsequently renewed in writing on various occasions for extending the term. The last renewal of Agreement in writing is dated 31.01.2013 effective from 01.04.2013. All the above mentioned letter agreements were entered into by Mr. Kalyan Ganguly, Managing Director of UBL being the authorized representative of UBL. (6) The said Agreement was executed between the parties on the basis of various representations given by the official of UBL regarding the high volume of work orders to be provided UBL to SDBL as agreed under the Agreement and the timely payments thereof. The officials of UBL provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shock and dismay of SDBL, instead of making payments towards their admitted liabilities, the officials of UBL provided oral undertakings to SDBL that the aforesaid payments towards the pending bills will be made in the due course of time. However, UBL failed to discharge its liability on one pretext or the other and remained evasive. (11) And thereafter, in April, 2014, Mr.Pankaj Malik, local representative of behalf of UBL, once gain approached SDBL and requested to continue with the production and bottling of beer as before and warranted the written renewal of the said Agreement in the due course of time. UBL further insisted SDBL to act in accordance with the Agreement upon the oral instructions of UBL in the meantime. Mr.Pankaj also intentionally induces SDBL to continue performance of the Agreement on the express undertaking that in the event SDBL, agrees to perform on the instructions of the UBL, UBL will also make payments of the previous outstanding amount of ₹ 5,33,44,500/- (Rupees Five Crore Thirty Three Lakh Forty Four Thousand Five Hundred Only) to SDBI. (12) It is a well known fact that during this period, UBL and its sister concerns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts directors/official named above to evade from making the payments to SDBL towards UBL's admitted liabilities by criminally intimidating SDBL and it officials. It also transpired to the officials of SDBL that the officials of UBL with motives obvious and with the purpose of cheating SDBL have also created some forged paper trail of documents in order to blackmail SDBL to succumb to their illegal demands and have used such documents in filing various baseless complaints and proceedings in order to harm the reputation of SDBL. However, the disputes raised by UBL were not in relation to amount claimed by UBL under the present application before the Hon'ble Bench but were in relation to certain other issues including trademark and bottling design. (17) Further, the officials went a step further and instead of making payment of short-lifting of beer for the years 2012-13 and 2013-14, blatantly refused that there existed any agreement between SDBL and UBL for the year 2013-14 and refused its liability to pay any penalties for short-lifting of beer in that particular year.The existence of the written agreement contrary to UBL's claims clearly indicates the mala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce and bottle Beer under the Corporate Debtor's Trademarks as per the specifications and know how provided by the Corporate Debtor. The parties hereto entered into an agreement on 14.01.2003 whereby the Corporate Debtor permitted the Operational Creditor to manufacture and bottle beer in the name of Corporate Debtor's Trademark for a period of Three years. The said agreement was extended from time to time and the last extension was made till 31.03.2013. Thereafter, the agreement was not extended any further. As such, the arrangement between the parties cameo an annexed by efflux of time on 31.03.2013 itself. Above facts are undisputed and they are admitted to, by the Operational Creditor in its written statement filed in O.S NO. 25327/2015 before the Hon'ble Court of the City Civil Judge, at Bangalore. (5) It is stated that the letters dated 08.10.2012, 30.03.2013 and 12.03.2014 are fabricated for the purpose of this Petition and hence, the Operational Creditor may be put to strict proof of the same. In any event, for the sake of argument, the said letter are to be relied upon, they related to alleged short-lifting of beer during the financial years 2012- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... njunction against the operational creditor and the case is pending before the Court. (8) It is further contended that the Operational Creditor has issued demand notice dated 13.06.2017 demanding payment of unpaid amount of ₹ 5,33,44,500/- based on the self-serving letters dated 08.10.2012, 30.03.2013, 30.09.2013 and 31.03.2014. The Corporate Debtor replied to the said demand notice vide its reply dated 22.06.2017 disputing the amount claimed by the Operational Creditor. The Corporate Debtor has clarified in its reply that the invoices attached to the demand notice are fabricated and have been prepared for the purpose of initiating frivolous proceedings and further stated that the arrangement between them came to an end by 31.03.2013, that the demand made is stale and barred by limitation. Therefore, there is an existence of a dispute between the parties and thus instant petition is not maintainable, and the same is liable to be rejected as provided under Section 9(5)(ii)(d) of the Insolvency and Bankruptcy Code, 2016. (9) The suit (O.S. No.25327/15), filed before City Civil Judge, Mayo Hall Unit,Bangalore relates to cause of action arise out of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is an 'operational debt' as defined exceeding ₹ 1 Lakh? ii. Whether documentary evidence furnished with the application shows that the aforesaid debt is due and payable and has not yet been paid? iii. Whether there is existence of dispute between the parties or the record of the pendency of a suit or arbitration proceeding filed before receipt of demand notice of the unpaid operational debt in relation to such dispute? (12) It is stated that the aforesaid demand letters squarely fall within the three sub-clauses of section 5(6) of the I B Code and hence a 'dispute' was in existence much before issuance of the demand notice by the Operational Creditor. Moreover, as stated, proceedings are going on before the Civil Court well before the receipt of the demand notice. The correspondence between the parties would show that the Corporate Debtor went on to state that the claim of the Operational Creditor is unfounded and untenable. The Respondent in its reply dated 22.06.2017 disputed the existence of debt in question. Hence, the Petition is liable to be rejected. (13) It is contended that there is no direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oducts. A mere look at these returns and/or the records maintained by the officers under Excise Act would clearly establish that the Operational Creditor has officially stopped manufacture of products bearing Corporate Debtor's trademark. Hence, the claim of the Operational Creditor that it allegedly continued to manufacture products of Corporate Debtor even after 31.03.2013 i.e, in the years 2013 to 2014 is wholly false and it is denied. (16) It is alleged that the Operational Creditor has violated several clauses of User Agreement dated 14.01.2003 and had failed to discharge its obligations under the said agreement. The claim amount is totally unsubstantiated and therefore, the claim is disputed and in view of arbitration clause i.e, clause 17, contained in the User Agreement and there is a bona fide dispute of the accounts between the Operational Creditor and the Corporate Debtor, the remedy has to be sought elsewhere. The impugned claim relates to and arises out of the User Agreement dated 14.01.2003, and performance or non-performance of mutual obligations as contracted between the parties, cannot be gone into by this Hon'ble Tribunal in view of the summ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from October, 2011 to March, 2012. Accordingly, the Corporate Debtor had made a payment of short-lifting charges vide Cheque bearing Nos. 105522 of an amount of ₹ 62,16,720. Therefore, it is contended that the Petitioner has made a claim with regard to the lifting charges. They have denied the termination of relationship between them on 31.03.2013 and stopped manufacture of beer. The Petitioner did not manufacture the Corporate Debtor's beer for the period during April, 2013 to March, 2014 as there was no order placed by the Corporate Debtor in accordance with terms of the Agreement. Therefore, he urged the Tribunal to dismiss the case. 8. Shri Venkanna Ekambe, learned Counsel for Respondent, while reiterating various averments made in the Company Petition, has further submitted that in pursuant to the order dated 04.03.2016 passed by City Civil Court in O.S. No.25372 of 2015 returning the plaint, they have filed M.F.A No. 1941 of 2016 before the Hon'ble High court of Karnataka by questioning the order dated 04.03.2016. However, the same was dismissed confirming the order of the Trial Court. Aggrieved by the order dated 20.04.2018 passed in M.F.A No. 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by inter alia seeking to initiate CIRP in respect of United Breweries Limited (Respondent). As per section 2 of the Code, the provisions of this Code shall apply to any Company incorporate under provisions of the Companies Act, 2013 (18 of 2013) or under any previous Company law; any Limited Liability Partnership incorporated under the Limited Liability Partnership Act, 2008 etc. in relation to their, liquidation, voluntary Liquidation or bankruptcy as the case maybe. As stated supra, the Petitioner has not pleaded that the financial status of the Corporate Debtor is financially precarious except stating that there have suffered some business disturbance, while carrying on the business for sometime. On the other than, as stated supra, sufficient material is placed on record to show that the Respondent is financially sound and number of employees are depending on the Company for their livelihood. Therefore, the Respondent cannot be put on CIRP as contended by the Petitioner. 10. The instant Company Petition, is in fact, filed seeking recovery of the alleged outstanding amount basing on the Memorandum of Understanding in question and time barred debt, r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r manufacture and sale of UBL beer, UBL shall pay SDBL as follows: (a) Brand Fee: SDBL agrees that in consideration of manufacture and supply of beer under Labels mentioned in Annexure-1 of the said Agreement having been granted by UBL, SDBL, shall pay a Brand Fee of ₹ 5 per case to UBL. Such payment shall be made on a monthly basis and not later than 10th day of the following month. (b) Reimbursement Balance due towards reimbursement of expenses incurred by the brand owner shall be arrived at as under: Amount (Rs/case) Turnover of SDBL (X) Less: Variable cost incurred by SDBL (Y) Less: Retention for fixed cost by SDBL (Z) Less: Brand Fee (payable to UBL) (₹ 5) Balance: Reimbursement of UBL (V) Variable cost which shall include the cost of raw materials, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the details of short-lifting of beer in the 1st half of the financial year. Beer to be lifted as per contract (from April to September, 12) : 5,00,000 cases Actual Lifting (Production) : 2,21,850 Cases Short-lifted quantity : 2,78,150 cases Short lifting charges to be paid by UB as per contract for the 1st half (April to September, 12 @ of ₹ 30/- per case = 83,44,500/-You are requested to release ₹ 83,44,500/- towards short-lifting at the earliest. 12. Subsequently, another letter dated 30th March, 2013 has addressed to the Respondent by inter alia claiming the amount of ₹ 1,50,00,000/- for the period from October, 2012 to March, 2013 for short-lifting charges (October, 2012 to March, 2013) 500000 c/s/@ ₹ 30/- per case. Similarly another letter dated 30.09.2013 has addressed to the Respondent by inter alia claiming the amount of ₹ 15,00,00,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alia denying the dues as claimed and states that the invoices attached to the Letter dated, the legal notice was fabricated and the agreement itself was expired in 31.03.2013 by efflux of time; they have not extended the term any further and they themselves have committed various breaches causing huge losses to them. Therefore, it shows that the instant claim relates to the year 2012 and the Petitioner itself admits that last transaction with the Respondent was on 01.01.2013. Moreover, the Respondent has promptly denied the claim of the petitioner vide their reply dated 22.06.2017 by denying the liability. And the claim itself is basing on the purported letters issued on 08.10.2012, 30.03.2013, 30.09.2013 and 31.03.2014 which are denied by the Respondent. Therefore, the claim itself is barred by laches and limitation apart veracity of claim itself. Moreover, the MoU dated 14.01.2013 in question, itself contained several terms and conditions to claim any bills as detailed supra. Therefore, disputed issues cannot be gone into the proceedings in summary proceedings like instant proceedings initiated under the Code. As stated supra, the suit filed by the Respondent is s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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