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TMI Blog2019 (5) TMI 1841X X X X Extracts X X X X X X X X Extracts X X X X ..... as per the Code. There are several questions of facts and law are involved in the instant case as detailed supra. Even the amount claimed itself is not terms of Settlement Agreement in question, in which interest issue did not mention and part payment of ₹ 5 Lakhs was received, after issue of demand notice. Therefore, there is a serious disputes exists with reference to the claim made by the Petitioner - the application is not only defective as rightly claimed by the Respondent, but it is instituted with an intention to recover the alleged outstanding amount by initiating CIRP proceedings, and it is not a fit case for admission and the same is liable to be rejected. Petition dismissed. - C.P. (IB) No.109/BB/2017 - - - Dated:- 10-5-2019 - Rajeswara Rao Vittanala, Member (J) For the Petitioner : Sahana Devanathan For the Respondents : Uday Shankar ORDER RAJESWARA RAO VITTANALA, MEMBER (J) 1. C.P.(IB) No.109/BB/2017 is filed by M/s.Posterscope Outdoor Advertising Private Limited ('Applicant/Operational Creditor') under Section 9 of the IBC, 2016, read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts Sister Concerns failed to remit the dues owed by them. Rather, the Corporate Debtor and its Sister Concerns arbitrarily and unilaterally terminated the agreements and sought to create an illusory dispute with Applicant to avoid payment of the dues owed by them to Applicant. In this manner, the Corporate Debtor's sister concern, M/s. Nitesh Estates Private Limited, instituted CP No.266/16 against the Applicant under Section 433 and 434 of the Companies Act, 1956 demanding repayment of monies allegedly over-paid by the Corporate Debtor and its Sister Concerns to Applicant. Applicant contested the Corporate Debtor's and its Sister Concern's claim and demanded the payment of the dues owed by them. Applicant made representations to the Advertising Agencies Association of India, Indian Outdoor Advertising Association and the Internet and Mobile Association of India (collectively referred to as the Associations') reporting to them the Corporate Debtor and its Sister Concerns attempts to renege on their dues owed to Applicant and seeking their intervention in this regard. (5) Considering the above, the Corporate Debtor and its Sister Concerns sought to settle the matt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the debt. Rather, the Corporate Debtor repeatedly made false and illusion promises that the payments would be made shortly. The debt and the obligation towards repayment of the debt has been categorically and unequivocally admitted by the Corporate Debtor in various communications. At no point of time, has the Corporate Debtor disputed the existence of the debt and the obligation to make payment therein, and has absolutely no defence or justification for not making payments towards the debt. It is evident that the Corporate Debtor is facing several financial strains on account of which, it is merely attempting to renege on its obligation to repay the debt. (9) Thereafter, Applicant issued a statutory notice dated 17.07.2017 to the Corporate Debtor bringing to the above to the Corporate Debtor's notice and calling upon them to pay the debt due to Applicant, failing which, the Applicant would institute insolvency proceedings. The Corporate Debtor issued an untenable reply dated 31.07.2017 wherein, the Corporate Debtor vaguely and fallaciously asserting the following: a. That it does not constitute an operational debtor; b. That Applicant had provided sub-standard servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner is not maintainable under the IBC, 2016 since the claim does not fall within ambit of the definition of 'Operational Debt' vis-a-vis the Respondent cannot be termed as Corporate Debtor. (2) Section 2 of the IBC, 2016, applies to Limited Companies, Companies governed by special Act, LLP's, body corporates and partnership firms relating to their insolvency, liquidation, voluntary liquidation or bankruptcy as the case may be. This means the Code applies to Complies which are insolvent or going in for liquidation or bankruptcy. In this case the Respondent is not insolvent or in liquidation or bankrupt for the Petitioner to move the NCLT for admission of their Petition. (3) Section 4 of the IBC, 2016, applies to matters relating to the insolvency and liquidation of Corporate Debtors where the minimum amount of default is ₹ 1,00,000/-. This means that the Code applies to Companies which are insolvent and which are not capable of paying ₹ 1,00,000/-. In this case the Respondent is not insolvent for the Petitioner to move the NCLT for admission of their Petition. (4) The Respondent Company is running since 04.12.2007 and till date. There are more t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is without authority from the Respondent Company. (8) It is further stated that the Agreement on which the Petitioner has come before this Court has not been duly stamped as per requisite provisions under the Stamp Act. Therefore, this Court cannot rely on this document to pass orders on such a serious issue under the IBC. (9) It is stated that the copy of the Petition served upon the Petitioner does not have complete set of documents and in fact one of the pages of the reply notice dated 31.07.2017 given by the Respondent is missing, which is very relevant to the present case making it fit for dismissal and the same has been on purpose not enclosed with the Petition since it would weaken the case of the Petitioner. The reply notice very clearly has raised that the Petitioner cannot be termed as Operational Creditor within the meaning of Section 9 read with Section 5(20) of the Code. This fact has been conveniently left out by the Petitioner in the Petition and also an attempt has been made to mislead the Court by omitting to place page 2 of the said reply notice with the Petition, since the same goes against the case of the Petitioner. (10) It is also stated that the Res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the dispute has been given by the Respondent which is a mandatory requirement under Section 9(3)(b). Since a vital requirement of the precondition of admission of Petition nor the IBC has not been followed and on this ground the Petition is liable to be dismissed. (15) It is stated that the claim is made on the basis of settlement entered into by the Petitioner and the Respondent in the winding up Petition filed by the Respondent in CP No.95 of 2016 before the Bombay High Court by the Respondent against the Petitioner. That the claim arising out of Settlement Agreement cannot be considered as an Operational Debt. The Petitioner does not fall within the definition of an Operational Creditor and neither does the claim amount being claimed by the Petitioner fall within the definition of Operational Debt. The letter dated 31.07.2017 by the Petitioner clearly states that there is no operational debt due and payable to the Petitioner and the claim under settlement cannot be considered as Operational Debt. Only on these grounds the Petition is liable to be rejected and dismissed on the threshold. (16) Since the Settlement Agreement was signed and filed with the Bombay High Court CP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upees Eight Lakhs Only) whereas a different sum is being shown by the Petitioner. (22) It is clear that the Applicant has placed false Affidavit before this Court and have come with unclean hands when they knew that the payments being demanded and payments already made are not matching as per their own Affidavit. It is clear that the Petitioner has a malicious intention to harass the Respondent and has filed the present Petition with a malafide motive and keeping in view the false Affidavit this Hon'ble Court may be directed to initiate proceedings against the Petitioner for Fraudulent or malicious initiation of proceedings u/s 65 of the Code and impose a penalty against the Applicant. (23) It is stated that the dispute has arisen on non-payment of amounts due under a Settlement Agreement needs to be agitated before the Civil Courts by the Petitioner for the recovery of their money from the Respondent under the threat of liquidation as provided under the IBC, 2016. Despite the dispute, the Respondent has made payments to the Petitioner in terms of the settlement. Even though payments have been made and even if any balance is outstanding as alleged, the same cannot be agit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gregating to ₹ 1,87,32,390/- payable to Posterscope by Nitesh Estates for the services rendered, which was disputed by Nitesh Estates. Due to defective services rendered by the Petitioner, the contracts were terminated and the Nitesh Estates Limited has filed winding up Petition against the Petitioner bearing CP(L) No.95/2016 (C.P.No. 266 of 2016) on 05.02.2016, before the High Court of Judicature at Bombay. However, the same was settled by way of settlement agreement and Mutual release ( Agreement ) dated 05.12.2016 subject several terms and conditions as mentioned therein. Clause 6 which is relevant here to refer:- Clause 6. The parties further agree and accept that all Agreements for advertising services stood terminated have no further, legal force or effect, and the parties do herby agree declare that neither of them shall have any claim on the other and all rights and obligations stand fully extinguished, discharged/settled and neither party shall raise any issue and/or claim of whatsoever nature against the other party before any Court, Forum and/or any Tribunal. 7. Accordingly, basing on the above settlement, C.P No.266 of 2016 is dismissed as withdrawn by an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tration proceeding filed before receipt of demand notice of the unpaid operational debt in relation to such dispute? If any one of aforesaid conditions is lacking, the application would have to be rejected. 9. There are several questions of facts and law are involved in the instant case as detailed supra. Even the amount claimed itself is not terms of Settlement Agreement in question, in which interest issue did not mention and part payment of ₹ 5 Lakhs was received, after issue of demand notice. Therefore, there is a serious disputes exists with reference to the claim made by the Petitioner. 10. Therefore, I have of the considered opinion that application is not only defective as rightly claimed by the Respondent, but it is instituted with an intention to recover the alleged outstanding amount by initiating CIRP proceedings, and it is not a fit case for admission and the same is liable to be rejected. 11. In view of above facts and circumstances of the case, C.P (IB) No. 109/BB/2017 is hereby rejected. However, this order will not come in the way of Petitioner to invoke any other remedy available under any other law so as to get its grievances redressed. No order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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