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TMI Blog2020 (4) TMI 509X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Mobilox Innovations (P.) Ltd. v. Kirusa Software (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. The Petitioner failed to point out the claim in question is un-disputed and it filed with an intention to recover the alleged dues rather to justify to initiate CIRP in respect of Corporate Debtor - Petition dismissed. - Rajeswara Rao Vittanala, Judicial Member And Ashutosh Chandra, Technical Member Guru Prasanna for the Petitioner. Ms. Shivani Singh for the Respondent. ORDER Rajeswara Rao Vittanala, 1. C.P.(IB)No.236/BB/2019 is filed by M/s. JCDecaux Advertising India Private Limited (Petitioner/Operational Creditor) u/s. 9 of IBC, 2016, r/w rule 6 of Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, by inter alia seeking to initiate Corporate Insolvency Resolution Process (CIRP) in respect of M/s. Ithaca Estates Private Limited (Respondent/Corporate Debtor) on the ground that it has committed default for an amount of ₹ 24,56,796/- (Rupees Twenty Four Lakhs Fifty Six Thousand Seven Hundred and Ninety Six only) which includes principal amount and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Notice dated 24-4-2019, under the provisions of the Code. However, the Corporate Debtor has replied to the Demand Notice dated 14-5-2019, by raising a frivolous ground for denying the claim in question, for the first time. The Corporate Debtor has till date not denied the amounts outstanding and payable from the Corporate Debtor to the Operational Creditor but has made part payment. 3. The Respondent/Corporate Debtor has filed Statement of Objections dated 19-12-2019, by inter alia contending as follows: (1) The Petition is false, baseless, frivolous, vexatious, bereft of merits and the Petitioner is put to strict proof of the same. The Operational Creditor has suppressed the material facts and has not approached the Adjudicating Authority with clean hands. (2) It is stated that the Petitioner being an outdoor advertising specialist informed and assured the Respondent during negotiations that the project of the Respondent would be marketed and advertised near/around the Kempegowda International Airport, so that the same would attract potential customers, who would enter the city. Based on the assurances and promise of the Petitioner, the Respondent entered into a Contract dated 7-5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of present proceedings and in the reply dated 14-5-2019 to the Legal Notice issued on 24-4-2019. (6) The Petitioner has enclosed similar copies of Term and Conditions to each Contract Form in question. As per clause 20 of the Contract in question, entered between the parties, any dispute arising out of the performance of or relating to the Contract should be first resolved through friendly negotiation. Thereafter, if the dispute could not be settled, both the parties have agreed to submit this dispute to the jurisdiction of the New Delhi. In the instant case, there have been no friendly negotiations, as per clause 20.1 of the Contract. Further, in view of the dispute raised as regards the amount due as early as 30-4-2018 and 18-5-2018, the Petitioner ought to have initiated appropriate proceedings before the jurisdictional forum i.e. New Delhi. It is beyond dispute that the machinery under the Code should not be allowed to be utilized merely as a means for realizing its alleged debts due from a Company. It becomes apparent that the intent of the Petition is to arm twist the Respondent to pay the amount that are allegedly due. (7) They have relied upon the judgment of the Hon'bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts, Interiors, Civil and Structural Engineers to Landscape artistes, CRM, Sales Marketing. The Company has delivered 1,622,405 square feet of saleable area under nineteen completed projects. It caters to a wide range of homebuyers from low to mid-range homebuyers. There are currently seven ongoing projects of the Skylark Group of Companies, namely, Skylark Arcadia, Skylark Ithaca, Skylark Royaume, Skylark Dasos, Skylark Richmond, Skylark Residency and Skylark Aavli. As on December, 2019, there are 430 contractors working on seven ongoing projects and the Skylark Group employees about 150 people. The Skylark Group has 2,973 units of inventory and the numbers of unsold units are 1,541. The current numbers of customers are 1,432. There is pre-existing dispute with respect to the Claim in question. And the Respondent is not insolvent Company to initiate CIRP at the instance of Petitioner, on untenable grounds. Therefore, she urged the Adjudicating Authority to dismiss the Petition. 7. The case is listed for hearing on various dates viz., 16-7-2019, 30-7-2019, 9-8-2019, 16-8-2019, 29-8-2019, 20-9-2019, 11-10-2019, 28-10-2019, 19-11-2019, 29-11-2019, 27-11-2019, 03-12-2019, 06-12-2019, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etween the Petitioner and Ryoauine Estates Pvt. Ltd. Similarly, several Tax Invoices were also filed twice. All these documents are not supporting the claim of Petitioner. Therefore, Invoices were raised against Ithaca Estates Pvt. Ltd (Respondent herein) contrary to Contract Forms executed in question. The Demand Notice dated 24-4-2019 in question, was also issued to the Respondent by contending that out of total invoices amount of ₹ 62,52,848/-, the Respondent made advance or part payment of ₹ 42,09,774 (including TDS), and thus total balance amount is ₹ 20,43,074/. The Respondent has already disputed the amount, as per the reply dated 14-5-2019, by denying that they are liable to pay the outstanding amount. The Claim in question relates to period from 30th April, 2015 to 28th February, 2018, and the Petitioner failed to explain the reasons for delay in approaching the Adjudicating Authority in the year 2019, and not approaching Civil Court as per terms and conditions of Contract in question, since the Respondent is alleged to have failed to pay the invoice amount, within stipulated period of 30 (thirty) days, in terms of Contract Form in question. 10. The Petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. The Adjudicating Authority, even cannot go simply go by debt and default, it should also see the object of Code, before initiating CIRP against the Corporate Debtor, which would have serious civil consequences, and would result in devastating effect on various stakeholders of Corporate Debtor. 13. It is settled position of law that the provisions of Code cannot be invoked for recovery of outstanding alleged amount(s). The Hon'ble Supreme Court in the case of Mobilox Innovations (P.) Ltd. v. Kirusa Software (P.) Ltd. [2017] 85 taxmann.com 292/144 SCL 37 has inter alia, held that IBC, 2016 is not intended to be substitute to a recovery forum. In another latest judgment rendered in Transmission Corpn. of A.P. Ltd. v. Equipment Conductors and Cables Ltd. [2018] 98 taxmann.com 375/150 SCL 447 (SC), Supreme Court of India, it is inter alia held that existence of undisputed debt is sine qua non of initiating CIRP. As per para 34 of judgment, it is stated that Adjudicating Authority, while examining an application filed under section 9 of the Code, will have to determine: (a) Whether there is an 'operational debt' as defined exceeding ₹ 1 Lakh? (b) Whether documentary ..... X X X X Extracts X X X X X X X X Extracts X X X X
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