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TMI Blog2020 (12) TMI 420X X X X Extracts X X X X X X X X Extracts X X X X ..... ther paid or adjusted long back by the Respondent against payments due from the Petitioner, as also borne out from the various emails exchanged between the two sides. In its mail of 10.04.2010 the Petitioner had accepted that all the demands had been paid. Subsequent dues were also cleared. No case has also been made out that the Respondent is an insolvent entity that has lost its ability to run its business, generate revenue or repay its debts. This is not a case where the insolvency of the Corporate Debtor needs to be resolved by initiating CIRP, which is the objective of the Code in inserting the provisions contained in sections 7 and 9. Recourse to the Code does not entail or intend pushing viable units into insolvency. There is no clear and undisputed debt, there is a pre-existing dispute, that this Tribunal cannot be used as a recovery forum, and that no case has been made out to our satisfaction that the Respondent is insolvent and is unable to pay its debts, the petition is liable to be dismissed - Petition dismissed. - CP (IB) No. 146/BB/2020 - - - Dated:- 1-12-2020 - Shri Rajeswara Rao Vittanala, Member (Judicial) and Shri Ashutosh Chandra, Member (Technical) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate Debtor. However, as on the date of filing application the Corporate Debtor failed to the make the payment. The total principal outstanding from the Corporate Debtor is ₹ 41,52,470/- (Rupees Forty One Lakh Fifty Two Thousand Four Hundred and Seventy Only). The Corporate Debtor made a default in payment of due amount. The Statutory Demand Notice pursuant to the Code demanding total outstanding payment along with applicable interest rate of 24% p.a. for ₹ 41,52,470/- was sent through post. The Corporate Debtor replied to the same on 10.01.2020. (4) It is stated that the Operational Creditor complied with the provisions of Section 9 (3) (a), (b) and (c) of the Code. Further, the Corporate Debtor had not raised any dispute in the past with respect to the un-paid operational debt and an affidavit has been filed as required u/s 9(3)(b) of the Code. Hence, the petition. 3. The Respondent has filed Statement of Objections dated 31.08.2020 by inter alia contending as follows: (1) The claim of the Petitioner in the instant petition is emphatically denied as false in as much as the Petitioner is seeking to recover sums allegedly due to the Petitioner during the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2011 admitting having received the balance amount and deduction of ₹ 14,73,569/- and as such all dues as on 28.02.2011 was paid by the Respondent to the Petitioner. Despite admitting that the Respondent has cleared all amounts outstanding to the Petitioner as on 28.02.2011, the Petitioner has preferred the instant petition claiming amount allegedly due since 2009 by suppressing the above facts. (4) Further, there is no occurrence of default as required U/s 8(1) of the Code to trigger the CIRP. There is no debt due to the Petitioner and as such there is no occurrence of default for the reason that all amounts due to the Petitioner have already been cleared and paid by the Respondent. The email dated 29.03.2014 and 13.04.2018 issued by the Respondent clearly show that upon due verification, the Respondent found that all payments due and payable to the Petitioner have already been paid and as such no amounts are due to the Petitioner. Hence, the claim of the Petitioner was denied by the Respondent way back in the year 2014. And that a perusal of Respondent Account Statement shows that the Petitioner has filed the instant Petition claiming amount to be due from the Responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed as a mode for recovery of money as in Transmission Corporation of A.P Limited v. Equipment Conductors Cables Limited (2019) 12 SCC 697. Despite the claim of the Petitioner being time barred, the Respondent acting in good faith released a sum of ₹ 15,37,914,26/- to the Petitioner in January and February 2017 upon being provided with requisite documents in a reconciliation with the Petitioner and further called upon the Petitioner to furnish documents to substantiate its claim in as much as the records of the Respondent do not disclose any amount to be due to the Petitioner. The amounts claimed by the Petitioner have been changing time and again. (10) In support of its contentions, the Respondent has also relied upon the following judgements: (2018) 1 SCC 353 - Mobilox Innovations Private Limited v. Kirusa Software Private Limited; (2019) 12 SCC 697 -Transmission Corporation of Andhra Pradesh Limited v. Equipment Conductors and Cables Limited; (2018) 17 SCC 662 - K. Kishan v. M/s. Vijay Nirman Company Pvt Ltd., (2019) 11 SCC 633 - B.K Educational Services Private Limited v. Parag Gupta and Associates; (2018) SCC Online NCLT 32102 - Next Education India Private Limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble. (5) Further, email was also received from the Respondent that they want to settle by paying ₹ 18,00,000/- which is very less comparing due amount ₹ 41,52,470/- (Additionally 24% interest on due payable as mentioned in Invoice/PO). The Petitioner replied that, settlement can be accepted amicably, if better amount is offered. (6) It is stated that out of the outstanding amount which is payable by the Respondent some part amount was adjusted towards purchase of Desktop amounting to ₹ 20,21,752/-. After adjusting the said payable amount by the Respondent, Net liability post Desktop purchase transaction is ₹ 41,52,470/- The Petitioner dues are related to the period of 01.04.2009 to 31.03.2015. The Custom House Agent Agreement was entered into on a later date i.e. 01.01.2013 referring to arbitration forum. Using arbitration proceedings may not be mandatory, as transactions are started much before the said Agreement. (7) It is stated that in Part IV (1) of Form 5 that an amount of ₹ 41,52,470/- is due against the Debtor arising out of transaction entered into between the parties against the running business is true and bonafide one. In Pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... more than 5 years after the date of default. That the Petitioner chose to engage the Respondent into correspondence for recovery in the intervening period or the last date of alleged part payment have no consequence as far as the date of default is concerned. Most of the default and cause of action arose more than 3 years prior to the enactment of the Code, and much before the Notice of demand and filing of the Petition under section 9 of the Code. (2) We further find that the demand notice dated 02.01.2020 itself is defective. From the list of alleged unpaid bills, and copies of the bills filed with the notice, as also filed along with the petition, at Annexure 3, it is seen that many of them have different numbers and amounts, and some pertain to different stations such as those at sl. Nos. 1, 14, 15, 20, 21, 38, 44, 77 etc. The petition deserves to be dismissed on this ground itself that the demand notice issued by the Petitioner claiming a debt and default is in itself defective, and hence cannot give rise to any cause of action so as to file a petition under the Code. 7. Before examining the facts of the case, we make it clear that the provisions of Code cannot be in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uted the claims of the Petitioner, much before the demand notice sent on 02.01.2020. The Respondent contends that whatever demands were raised by the Petitioner for the services rendered by it, were either paid or adjusted long back by the Respondent against payments due from the Petitioner, as also borne out from the various emails exchanged between the two sides. In its mail of 10.04.2010 the Petitioner had accepted that all the demands had been paid. Subsequent dues were also cleared. The Respondent has disputed the demands by stating that the mails of 18.03.2011 and 10.04.201 1 reveal that the due amount of ₹ 14, 73,569 for purchase of desktops from the Respondent would be adjusted against the existing demand, and after having received the balance amount and deduction of ₹ 14,73,569/- all dues as on 28.02.201 1 were paid by the Respondent to the Petitioner. As indicated in the e mails of 29.03.2014 and 13.04.2018 from the Respondent to the Petitioner, it appears that all payments due and payable to the Petitioner had already been paid. The Respondent has placed at Ann. R3 the payment vouchers where electronic transfers have been made to the account of the Petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X
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