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TMI Blog2020 (10) TMI 551X X X X Extracts X X X X X X X X Extracts X X X X ..... ars of date of disbursement of loan or issuance of cheque. Hence, their such claim/debt is barred by the Limitation. It is now the well settled legal position by the Hon'ble Supreme Court in respect of the I.B. proceedings that the limitation prescribed for filing an I.B. Petition is three (03) years from the date when default has occurred. The present petitioners have filed these petition with some mala fide intention only to create pressure on the Corporate Debtor for recovery of its amount invested or unsecure loan given to the Corporate Debtor without having a formal and written contract and that is too with an exorbitant rate of interest of 24% per annum, which cannot be treated as fair and legally sustainable. Moreover, it appears that the present petition is result of some family dispute arose among them and merely to harass the Respondent/Corporate Debtor - The Corporate Debtor is showing a positive net-worth as per its last balance sheet, hence, it cannot be termed that the company is unable to pay its debts but there may be some dispute with regard to oppression and mismanagement in the company, which is not the subject matter of the present I.B. Petition. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor is having its registered address at: Kaustubh , Plot No. 66/2, Patel Colony -2, Gundala Road, Gondal - 360 311, India. (ii) It is stated that the Respondent/Corporate-Debtor Company, namely M/s. Cosmos Technocast Pvt. Ltd. is a company incorporated under the Companies Act, 1956 on 08.12.2006 with the CIN: U27105GJ2006PTC049545 and it seems that the company is engaged in the business of manufacturing of machinery parts. (iii) The authorised share capital of the Respondent/Corporate-Debtor-Company is ₹ 1,00,00,000/- (Rupees One Crore only) and the paid-up share capital of the company is ₹ 1,00,00,000/- (Rupees One Crore only). The registered office of the Corporate Debtor Company is situated at: Plot No. 25 to 28, Survey No. 47, Hadmatala Industrial Estate, Ta. KotdaSangani, District Rajkot, Hadmatala, Gujarat -360011, India. (iv) It is submitted that in the year 2006-07, Mr. Purushottam M. Thummar and Mr. Chaturbhai P. Thummar being Directors of the Corporate-Debtor-Company had requested the Financial Creditor, Mr. Krashin V. Thummar to invest in their company. Following this, the Petitioner/Financial-Creditor had paid total amount of ₹ 3,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2018 (i) The present I.B. Petition is preferred by the Financial-Creditor Mr. Popatbhai P. Thummar under Section 7 of the Insolvency and Bankruptcy Code, 2016 (herein after referred to as a Code ), seeking initiation of Corporate-Insolvency-Resolution-Process ( CIRP in Short) in respect of the Corporate-Debtor-Company namely, M/s. Cosmos Technocast Pvt. Ltd. The Petitioner/Financial-Creditor, Mr. Popatbhai P. Thummar is an individual Financial Creditor. The Petitioner/Financial-Creditor is having its registered address at: Kaustubh , Plot No. 66/2, Patel Colony -2, Gundala Road, Gondal - 360311, India. (ii) It is stated that the Respondent/Corporate-Debtor Company, namely M/s. Cosmos Technocast Pvt. Ltd. is a company incorporated under the Companies Act, 1956 on 08.12.2006 with the CIN: U27105GJ2006PTC049545 and it seems that the company is engaged in the business of manufacturing of machinery parts. (iii) The authorised share capital of the Respondent/Corporate-Debtor-Company is ₹ 1,00,00,000/- (Rupees One Crore only) and the paid-up share capital of the company is ₹ 1,00,00,000/- (Rupees One Crore only). The registered office of the Corporate Debtor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the repayment of the aforesaid amount held as deposit to the Petitioner. It is stated that the financial creditor did not encash the cheque as the amount in the cheque was unacceptable to the Petitioner/Financial Creditor, as it was not as per the terms they entered into. (ix) Thus, it reflects that there was some pre-existing dispute regarding rate at which the repayment was calculated. The petitioner has also enclosed a copy of the said cheque with the present petition. (x) It is averred by the Petitioner that the Corporate Debtor issued a legal notice dated 12.08.2017, through its advocate in reply to the legal notice served by the Petitioner dated 20.07.2017 by denying inter-alia that the deposit amounts held with the Respondent Company are long term borrowings from the promoters. It is stated that the Petitioner was neither a promoter nor a director of the corporate debtor company. However, the amount of ₹ 50,000=00 clearly reflect in the accounts maintained by the corporate debtor company. (xi) It is stated that the corporate debtor sent an e-mail on 28.10.2016 and had provided the details of deposit account of the financial creditor, which reflect that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rupees Four Lakh Eighty-One Thousand Two Hundred Eighty-Eight only), which was admittedly awarded to the another deposit holder as per the e-mail of the Corporate Debtor dated 16.10.2011. A copy of such email is enclosed as Annexure - J to the present petition. (C) C.P.(IB) No. 37 of 2018 (i) The present I.B. Petition is preferred by the Financial-Creditor Mr. J. M. Kathrotiya, under Section 7 of the Insolvency and Bankruptcy Code, 2016 (herein after referred to as a Code ), seeking initiation of Corporate-Insolvency-Resolution-Process ( CIRP in Short) in respect of the Corporate-Debtor-Company namely, M/s. Cosmos Technocast Pvt. Ltd. The Petitioner/Financial-Creditor, Mr. J. M. Kathrotiya is an individual Financial Creditor. The Petitioner/Financial-Creditor is having its registered address at: Kaustubh , Plot No. 66/2, Patel Colony -2, Gundala Road, Gondal - 360311, India. (ii) It is stated that the Respondent/Corporate-Debtor Company, namely M/s. Cosmos Technocast Pvt. Ltd. is a company incorporated under the Companies Act, 1956 on 08.12.2006 with the CIN: U27105GJ2006PTC049545 and it seems that the company is engaged in the business of manufacturing of machine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rve legal notice(s) to the Corporate Debtor. Thus, the notices were served on 20.07.2017 and 11.10.2017 by the Petitioner/Financial Creditor. The same are annexed as Annexures E F to the present petition. (viii) It is stated that the Corporate Debtor, pursuant to the notices issued, the Petitioner had issued a cheque of Bank of Baroda having No. 008786 dated 17.12.2017 for an amount of ₹ 4,32,000=00 (Rupees Four Lakh Thirty-Two Thousand only) to the Petitioner against the repayment of the aforesaid amount held as deposit to the Petitioner. It is stated that the financial creditor did not encash the cheque as the amount in the cheque was unacceptable to the Petitioner/Financial Creditor, as it was not as per the terms they entered into. (ix) Thus, it reflects that there was some pre-existing dispute regarding rate at which the repayment was calculated. The petitioner has also enclosed a copy of the said cheque with the present petition. (x) It is averred by the Petitioner that the Corporate Debtor issued a legal notice dated 12.08.2017, through its Advocate/Counsel, in reply to the legal notice served by the Petitioner dated 20.07.2017 by denying inter-alia th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 181761 2.00% 3635 43623 24.01.14 to 24.01.15 225383 2.00% 4508 54092 24.01.15 to 24.01.16 279475 2.00% 5590 67074 24.01.16 to 24.01.17 346549 2.00% 6931 83172 24.01.17 to 24.07.17 429721 2.00% 8594 25783 A 455505 2,00,000=00 J.M. Kathrotiya 14.05.10 to 14.05.11 200000 2.00% 4000 48000 14.05.11 to 14.05.12 248000 2.00% 4960 59520 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of Petitioner but again the same was not deposited. 6. It is contended from the affidavit in reply that the Respondent/Corporate-Debtor-Company is a healthy and profit making company and there is no loan default by the Respondent Company. It is further contended that as per profit and loss account of the last audited statement for the year ended on 31.03.2017, the total revenue of Respondent company was ₹ 9,18,87,438/- (Rupees Nine Crores Eighteen Lakhs Eighty-Seven Thousand Four Hundred Thirty-Seven Only) and total profit was ₹ 36,93,751/- (Rupees Thirty-Six Lakhs Ninety-Three Thousand Seven Hundred Fifty-One Only). In support of its contention, the Corporate Debtor has annexed copies of audited financial for the f.y. ended on 31.03.2017 to the present reply/objection. 7. The Corporate-Debtor, further, in its reply has submitted that the object of the code is the revival of a debt ridden company and not the recovery of dues. 8. In support of this, the Corporate-Debtor has also relied on a decision of Hon. NCLAT in the matter of Prowess International Pvt. Ltd. Vs. Parker Hannifin India Pvt. Ltd. in company appeal (AT) (Insol.) No. 89 of 2017, and held that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsecured loan lender when they request to repay the loan and the rate of interest is same for all the unsecured loan holder (including the petitioner) which is 12% p.a. Therefore, the petitioner's claim of interest @24% is not legible. 15. It is pertinent to mention that the Petitioner/Financial-Creditor did not encash the cheques and there is no proof of dishonour of cheques as issued by the Corporate-Debtor. Thus, the Petitioner/Financial-Creditor has tried to dispute the payment without any proof of default. The Respondent has produced its financial statements like profit and loss account which could be considered as a legal document to prove the healthy financial status/profit making of the company. In such case, we are of the view that the C.I.R.P. could not be triggered. 16. Furthermore, it is contended by the Respondent that as per the Petitioner, the default was occurred on 24.01.2008 and it sent legal notices to the Respondent on 01.06.2017. It is evident that almost nine years of time had been lapsed. Therefore, the present Petition is barred by Section 3 of the Limitation Act, 1963, which states that: 3. Bar of limitation:- (1) Subject to the provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did not encash the cheque of ₹ 86,473=00 dated 17.02.2017 and also another cheque issued for ₹ 95,826=00 dated 15.01.2018 with a mala fide intention to harass the petitioner and to initiate frivolous proceedings under the I.B. Code. It is stated that the present corporate debtor company is a healthy and profit making company and there is no loan default by the Respondent. It is also stated that the respondent company has submitted and annexed copies of net profit-loss account for the last audited statement for the year ended on 31.03.2017, showing total revenue of ₹ 9,18,87,437=00 and total net profit of ₹ 36,93,751=00. 20. It is further stated by the Respondent that it has publically placed its financial statements before Annual General Meeting every year, claiming to be a public document which cannot be disputed. It is vehemently opposed by the Respondent that this Petition is a result of family dispute arose among the brothers and therefore, filing present petition under Section 7 is merely to harass the Respondent. It is averred that the present matter is in-fact of an oppression and mismanagement, then it is to be filed under proper Section, i.e. und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Respondent in its reply/objection that, if the claimed default has been occurred on 24.01.2008 and the legal proceedings were initiated by the Petitioner on 01.06.2017, by sending a notice. However, the present petition is filed in this bench on 09.01.2018 and on this ground also, the Limitation Act, 1963, does not permit the petition to be admitted. 26. In view of the decision of Hon'ble Supreme Court in the matter of Mobilox Innovations Pvt. Ltd. vs. Kirusha Software wherein it is categorically held that this Code cannot be used as debts recovery mechanism. 27. We duly considered the above stated averments made by the Petitioner in the present I.B. Petition as well as in the reply/objection filed by the Respondent/Corporate Debtor. 28. By perusal of the materials available on record, it is evident that the Petitioners in these three I.B. Petitions have issued some cheques towards unsecured loan to the Corporate Debtor Company between the period of 13.12.2006 to 24.01.2007 (in respect of CP(IB) No. 36 of 2018) and further, between 29.01.2007 to 18.05.2010 (in respect of CP(IB) No. 37 of 2018) while the Petitioner in CP(IB) No. 35 of 2018 has contended that he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re all otherwise futile for all purpose. 29. In addition to the above, the Hon'ble Supreme Court in its judgment in the matter of K. Kishan vs. M/s. Vijay Nirman Company Pvt. Ltd. Civil Appeal No. 21824 of 2017 has also held that the theme and object of the code is not meant for the recovery of debt but to bring the resolution/revival of the company by a resolution plan. The relevant portion of the decision of Hon'ble Supreme Court is reproduced herein below: 13) Following this judgment, it becomes clear that operational creditors cannot use the Insolvency Code either prematurely or for extraneous considerations or as a substitute for debt enforcement procedures. The alarming result of an operational debt contained in an arbitral award for a small amount of say, two lakhs of rupees, cannot possibly jeopardize an otherwise solvent company worth several crores of rupees. Such a company would be well within its rights to state that it is challenging the Arbitral Award passed against it, and the mere factum of challenge would be sufficient to state that it disputes the Award. Such a case would clearly come within para 38 of Mobilox Innovations (supra), being a case of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated facts and circumstances of the present case, we find that there seems bonifiedy on the part of the Corporate Debtor for making payment of debts and by offering the demand draft in the open court, which was refused to be received by the Petitioner for the reason best known to them. It gives such impression that the petitioner is not having any bona fide intention to seek revival or resolution of the debt stressed company and want to use this forum as a court of recovery of its disputed debts. 33. This Court under the discipline of the I.B. Code is not expected to adjudicate the Civil Disputes including the issue of contractual rate of interest because there is no such written agreement made available to this Bench from either side. So, as to prove that the Corporate Debtor Company has agreed for making payment of interest as claimed by the Petitioner while accepting such unsecured loan. Such dispute can be decided only by a competent court of law or by the Civil Court. 34. Notwithstanding the above, this Court cannot lose sight from the fact of the case that the Petitioner are shareholders of the Corporate Debtor Company and they paid the money as an investment in the com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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