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TMI Blog2021 (8) TMI 719X X X X Extracts X X X X X X X X Extracts X X X X ..... Kanthi Narahari] Member (Technical) For the Appellant : Mr. Vikas Mahendra, Advocate For the Respondent : Mr. M. S. Shyamsundar, Advocate JUDGMENT ( VIRTUAL MODE ) Kanthi Narahari Member (T) 1. The present Appeal is filed against the Order of the Hon ble Adjudicating Authority dated 18th December 2020 whereby the application of the Appellant filed under Section 9 of IBC 2006 was disposed of with an observation that it is not a fit case for admission. Brief Facts :- Appellant s Submissions: 2. The Learned Counsel for the Appellant submitted that the Appellant has filed an application under Section 9 in the capacity as Operational Creditor before the Hon ble Adjudicating Authority, Bengaluru Bench, Bengaluru seeking initiation of Corporate Insolvency Resolution Process ( CIRP ) against the Respondent herein i.e., M/S. Shore Dwellings Pvt. Ltd for non-payment of Operational debt. It is submitted that the acknowledged debt has fallen due to the Appellant under a contract with the Respondent dated 14th January 2011 ( Construction Contract ) under which the Appellant was to carry out the construction works in the Mantri Pinnacle High Rise Res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,00,00,000 by 30th April 2020 iii ) ₹ 2,98,47,408 by 30th June 2020. 5. The Learned Counsel submitted that having not received any payments towards the Acknowledged Debt from the Respondent, the Appellant issued a Statutory Demand Notice dated 5th August 2020 under Section 8 of the IBC 2016 seeking payment of the Acknowledged Debt. In response thereto, the Respondent issued a Letter dated 14th August 2020 seeking 15 days time to respond to the Demand Notice issued to the Appellant. Thereafter, no further communication or payments were made by the Respondent. In view of the aforesaid reason, the Appellant filed the Application before the Hon ble Adjudicating Authority Under Section 9 of the IBC seeking initiation of CIRP against the Respondent. 6. The Learned Counsel further submitted that the Respondent vide Letter dated 3rd January 2020 confirmed the liability of the debt to the extent of ₹ 6,98,47,408 with a request for revision of payment schedule. In view of the request, the Appellant revised the payment schedule as stated supra and it is clear admission of the Respondent recording the debt due and payable. The Hon ble Adjudicating Authority after Hear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Adjudicating Authority felt that substantial contractual compensation was already paid by the Respondent and only a small part was left over and non-payments in terms of the agreed settlement were caused due to Covid 19 slowdown. The Learned Counsel submitted that it is a settled Law that under the provisions of the IBC 2016 a Corporate Entity can be either Insolvent or Liquidated only on the account of failure caused due to a total incapacity of a Corporate Entity to pay the debts and not for a mere non-payment owing to circumstances. In response to the Judgment of the Hon ble Supreme Court in Mobilox, the Learned Counsel submitted that the Hon ble Adjudicating Authority felt that the Judicial Mechanism provided under the Code cannot be substituted for recovery as the mechanism recovery of dues against a solvent company is otherwise possible through a different process of Law. Therefore, there is no illegality in the Order of the Hon ble Adjudicating Authority. 11. The Learned Counsel further submitted that the Hon ble Adjudicating Authority was of the view that IBC was wrongly invoked, instead of simply rejecting the Application and leaving open the choices of recovery to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... io. Hence, the Petition appears to be not only for recovery of debt but is premature. It would be in the interest of justice to allow the Corporate Debtor a few more months to clear the debt or settle the matter with the Petitioner. We are therefore of the considered view that at present this is not a fit case for admission. 15. The Learned Adjudicating Authority at Para 9 of the Judgment was of the view that the Appellant and the Respondent have been negotiating the terms of payment till very recently and the same are still on. The Corporate Debtor is willing to pay only the terms are to be settled keeping in mind the present economic scenario. Further the Learned Adjudicating Authority was of the view that the petition appears to be not only for recovery of debt but is premature. Prima facie we are of the view that the stand taken by the Learned Adjudicating Authority is illegal Per-se for the reason that the main objects of the IBC is for Resolution of the Corporate Debtor in a time bound manner. The Adjudicating Authority ought to have taken into consideration whether the Appellant/Applicant fulfil the criteria as contemplated under Section 9 of the IBC and if so the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2019 for a net amount of ₹ 12,45,89,866 against the final bill amount and the Respondent certified a net amount of ₹ 6,98,47,408 to be paid as per the agreed payment schedule (minutes of meeting) issued by Respondent. The document is enclosed at Page 157 of Volume II of Appeal Paper Book(s). We have perused the said document and at Page 159 of the said document in a hand written it is recorded that Final amount of ₹ 6,98,47,408 agreed as per above settlement . The representatives of the Appellant and the Respondent have signed the said minutes of meeting. Thus, it is an admitted fact that the Respondent had agreed to pay the said amount vide minutes of meeting dated 01.10.2019. Further, the contention of the Appellant that the Appellant had sent Settlement Agreement to the Respondent as per the minutes of meeting dated 01.10.2019. However, the Respondent has not returned the Settlement Agreement duly signed. The Respondent addressed a Letter to the Appellant that there is correspondence between the Appellant and the Respondent with regard to the payments to be made in 3 instalments i.e., ₹ 2,00,00,000 by end of December 2019, ₹ 2,00,00,000 by end of M ..... X X X X Extracts X X X X X X X X Extracts X X X X
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