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TMI Blog2021 (6) TMI 493X X X X Extracts X X X X X X X X Extracts X X X X ..... on 10.09.2008 as a Private Company Limited by shares under the Companies Act, 1956. Its Authorised Capital is Rs. 1,00,00,000/- and Paid up Capital is Rs. 41,00,000/-.The Company is engaged in the business of plumbing, firefighting, and insulation services. (2) M/s. AIGL Properties Limited (hereinafter referred to as 'Respondent/Corporate Debtor') was incorporated on 05.05.1982 as a Public Company Limited by shares under the Companies Act, 1956 Its Authorised Capital is Rs. 1,00,00,000/- and Paid up Capital is Rs. 56,59,200/-. The Company is engaged in the business of building of complete constructions etc. (3) The Operational Creditor and Corporate Debtor entered into an Agreement dated 03.06.2013 at Hyderabad for Internal and External Plumbing Work of Ridge Towers, Phase 1 at #48-261, Suryanagar, Balanagar Township, Narsapur Road, Hyderabad-500037. The Operational Creditor executed the work as per the Agreement and to the satisfaction of the Corporate Debtors. The Operational Creditor raised various invoices and out of which 5 invoices were raised from 27.01.2015 to 10.07.2015 for total amount of Rs. 1,16,87,225/-. The Corporate Debtor had made the last payment on 25 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be completed by the Operational Creditor within eight months from the date of execution of the Agreement i.e. 02nd February 2014. However, the invoices under which the claim arises is admittedly raised in the period from 27.01.2015 to 10.07.2015. This shows that the Operational Creditor was in clear breach of his obligations and, per se, is not entitled to claim the monies, as a matter of course. Even long after the timeframe the completion of works expired, the Parties met on 02.02.2015, when the Operational Creditor agreed to remedy its breaches and complete the pending works at the earliest. However, the Operational Creditor failed to do so. The works executed by the Operational Creditor were of poor quality and defective. The Operational Creditor during that period, admitted on various occasions that it was not able to complete the work as per the contract since it was not getting supplies from its head office and financial crunch. (3) It is also contended that the Corporate Debtor wrote an email dated 13.03.2015 to the Operational Creditor stating that the Operational Creditor was, yet again, in breach of its obligations under the Agreement and, therefore, the Corporate Deb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecified for any suit or application by or against a corporate debtor for which an order or moratorium has been made under this Part, the period during which such moratorium is in place shall be excluded. Thus, it emphatic that the period of Moratorium U/s. 14 of the Code for the Operational Creditor which was declared vide order dated 16.08.2017 and thereafter lifted on 19.09.2019 by the NCLT, Mumbai pursuant to the withdrawal of CIRP U/s. 12A of the Code should be excluded for computing the period of limitation as per Section 60(6) of the Code thereby rendering this Petition filed u/s. 9 on 16.03.2020 by the Operational Creditor against the Corporate Debtor within the period of the Limitation. (2) As regards terms of payment of Clause 6(c) of the Agreement provided that "Certification shall be done within 7 days from submission of bill and payment shall be done within 7 days from the date of the certification of the bill by the Corporate Debtor to the Operational Creditor." It is very pertinent from the bills that the certification and payments were never made by the Corporate Debtor to the Operational Creditor within the said timelines as enshrined in Clause 6(c) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Rs. 2 Crore in completion of the work engaging 3rd party contractors and suppliers and rectification of seepages. That Clause 30 of the Agreement contains arbitration clause. 2. The Respondent has placed reliance on the decision of Hon'ble NCLAT in Umesh Saraf v. Tech India Engineers Pvt. Ltd. (Company Appeal) (AT) (Insolvency) No. 548 of 2020), the pre-existence of a dispute will attract rejection of application under section 9 of the IBC, in terms of Section 9(5)(2)d of the IBC. This petition deserves to be dismissed on this ground alone. 3. It is stated that the Agreement dated 03.06.2013 required work to be completed by the Petitioner within 8 months from the date of execution of the Agreement. However, the invoices under which the claim arises is admittedly raised in the period from 27.01.2015 to 10.07.2015. This, in itself, shows that the Operational Creditor was in clear breach of his obligations and, per se, is not entitled to claim the monies, as a matter of course. The Respondent expressly disputes the Petitioner's claim. Further, the works executed by the Petitioner were of poor quality and defective. The Petitioner itself on many occasions admitted that it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stified reasons as per the Code. The Hon'ble Supreme Court in the case of Mobilox Innovations Private Limited v. Kirusa Software Private Limited 2018 (1) SCC 353 has inter alia held that I & B Code, 2016 is not intended to be a substitute to a recovery forum and cannot be used to jeopardise the financial health of an otherwise solvent company by pushing it into insolvency. It is also pertinent to mention here that the Hon'ble Supreme Court in the case of K. Kishan v. Vijay Nirman Company Private Limited (C A) No. 9597 of 2018 dated 23rd October, 2018, ( 147 CLA 112 (SC) clarified that the Petitioners cannot use IBC either prematurely or for extraneous considerations or as substitute for debt enforcement procedures. Also an undisputed debt is a sine qua non for a petition filed u/s. 9 of the code. 8. In the light of above discussion, the Petitioner has to make a case that there is a clear and undisputed debt, a default and also that the Respondent is insolvent and has lost its ability to pay its debts. Without this, the proceedings become mere recovery proceedings which is not intended by the legislature in introducing the I & B Code, 2016. 9. From the details filed it is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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