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TMI Blog2020 (9) TMI 399X X X X Extracts X X X X X X X X Extracts X X X X ..... ot raised the dispute under Section 8(2) of the IBC within the time prescribed under law. Existence of dispute and default or not - HELD THAT:- The definition of debt as defined under the IBC does not mean the operational debt only rather it includes financial debt as well as liability or obligation in respect of a claim which is due from any person and default means non payment of debt, but in order to trigger Section 9 of IBC an Operational Creditor is required to establish a default for non payment of Operational debt as defined in Section 5(21) of IBC, which means a claim in respect of the provision of goods or services including employment or a debt in respect of the [payment] of dues arising under any law for the time being in force and if a person fails to establish that, then they can not initiate CIRP under Section 9 of the IBC - Now it is the settled principle of law that National Company Law Tribunal is not recovery court rather when a default of either financial debt or operational debt occurred in that case, financial creditor or operational creditor may file an application for initiating corporate insolvency resolution process u/s 7 or section 9 respectively. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to pay the remaining commission to be cleared amounting to the tune of ₹ 33,94,000/- vide Post Dated Cheques (hereinafter referred to as PDCs ). However, before presentation of the said cheques, the Corporate Debtor approached the Operational Creditor and requested the Operational Creditor to hold the presentation of the cheques before the banker of the Operational Creditor and further agreed to do RTGS instead of Post Dated Cheques. Acting on the representation made by the Corporate Debtor, the Operational Creditor held the cheques and did not present the same. It is pertinent to mention that the Corporate Debtor has neither taken steps to transfer the amount via RTGS nor replace the cheques till date. v. It was further agreed in Clause 3 of the Account Settlement Agreement dated 15.06.2018 that the Corporate Debtor will pay a fixed commission of ₹ 56,500/ -per month w.e.f. April 2018 for a period of 66 months and accordingly issued 66 Post Dated Cheques to the Operational Creditor. vi. It was assured by the Corporate Debtor that the PDCs will be honoured as and when the same shall be presented by the Operational Creditor, inter alia, the Corporate Debtor has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that he has not enclosed the required documents and in the absence of that he denied any liability. The facts of the reply are that the Corporate Debtor had never admitted any debt being due or payable to the Operational Creditor. Further, Mr. Kamal Manchanda was a director of the Respondent Company for a brief period of time and as such had access to signed cheques, crucial documents, etc. of the Corporate Debtor Company and the cheques (of HDFC Bank) placed on record as ANNEXURE - E (from page 73 to 94 of the above noted application) belong to the bank in which Mr. Manchanda was an authorised signatory at the relevant time and the said cheques were stolen by Mr. Manchanda in order to use them. Further, in support of the settlement agreement dated 15.06.2018, it is stated that during that period certain settlement talks were underway which could never be materialised and the settlement talks were not per se the Applicant Company but with respect to other companies. Further, it was informed by Mr. Abhishek Kumar that Mr. Manchanda was coercing him to sign one sided agreements. Accordingly, the settlement/exit talks ended inconclusive and Mr. Manchanda exited the Respondent Company. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter the date of the settlement agreement dated 15.06.2018 i.e., ₹ 1,00,000/- on 15.12.2018, ₹ 1,00,000/- on 29.12.2018 and ₹ 50,000/- on 02.01.2019 towards GST and ₹ 5,00,000/- towards GST on 30.03.2019. Further, due to inordinate delay and default in the payment of GST, the GST payment was made by the OC in the month of March, 2019. Further, the reply filed by the Corporate Debtor does not show any dispute in relation to any bills of Operational Creditor. 6. We have heard the Ld. Counsel for the Operational Creditor as well as Corporate Debtor. Ld. Counsel for the Operational Creditor in course of his arguments submitted that the Operational Creditor was a consultant investor with the Corporate Debtor and the agreement dated 28.11.2014 was entered into between the parties. Pursuant to the agreement, the Operational Creditor made investment of Rupees Twenty Five Lakhs with the Corporate Debtor in the forum of refundable security deposit. The Operational Creditor also provided consultancy and advisory services to the Corporate Debtor against which invoices were duly raised by the Operational Creditor from time to time. He further submitted that under clau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e reply. He further submitted that the Corporate Debtor is an insolvent company and its assets are more than its liabilities and has an adequate cash flow and insolvency can be initiated against Corporate Debtor to recover its dues. He also placed reliance on the decisions of Mobilox Innovations Pvt. Ltd Vs. Kirusa Software Pvt. Ltd. MANU/SC/1196/2017 : (2018) 1 SCC 353, Transmission Corporation of Andhra Pradesh Ltd Vs. Equipment Conductors and Cables Ltd. MANU/SC/1192/2018 : (2018) 14 SCALE 176, Innoventive Industries Ltd. Vs. ICICI Bank MANU/SC/1063/2017 : (2018) 1 SCC 407, Atul Roy Vs. M/s. Technofac Contracts Pvt. Ltd. and Anr. 2018 OnLine NCLAT 218 and Nisheet Ranjan Vs. Letstark Tech Pvt. Dated 31.05.2018 in CP(IB) No. 32/CHD/HRY/2018. 8. In the light of the aforesaid submissions, we have gone through the averments made in the application, reply, rejoinder as well as documents enclosed with the application and we find that it is admitted case of the applicant that the present application is filed for the breach of the terms and conditions of the settlement agreement entered in between the parties on 15.06.2018. We further find that this settlement agreement is to settle t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o there is default in the payment of amount and for that the applicant has filed the present application for initiation of CIRP for default in payment of OC, therefore, we would like to consider whether the terms and conditions of the settlement agreement comes under the definition of Operational Debt or not? Therefore, we would like to refer the definition of Operational Debt, Default and Debt and the same are quoted below: Section 5(21) operational debt means a claim in respect of the provision of goods or services including employment or a debt in respect of the [pagment] of dues arising under ang law for the time being in force and payable to the Central Government, any State Government or any local authority; Section 3(11) 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; 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 pagable and is not [Paid] by the debtor or the corporate debtor, as the case may be. 11. When we shall read all three definition together then it can be said that defini ..... X X X X Extracts X X X X X X X X Extracts X X X X
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