Home Case Index All Cases Insolvency and Bankruptcy Insolvency and Bankruptcy + AT Insolvency and Bankruptcy - 2023 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (8) TMI 617 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHIInitiation of CIRP / closure of CIRP - NCLT admitted the application - Corporate Debtor failed to make repayment of its dues - existence of legally enforceable debt or not - pre-existing disputes or not - Service of demand notice - Claim of huge fees/expenses claimed by the Resolution Professional - HELD THAT:- Section 8 of the IBC requires the Operational Creditor, on occurrence of a default by the Corporate Debtor, to deliver a Demand Notice in respect of the outstanding Operational Debt. Section 8(2) lays down that the Corporate Debtor within a period of 10 days of the receipt of the Demand Notice would have to bring to the notice of the Operational Creditor, the existence of dispute, if any. Post issue of demand notice by the Operational Creditor as contemplated in Section 9 of IBC - HELD THAT:- The existence of dispute and its communication to the Operational Creditor is statutorily provided for in Section 8. In the present case, it is an undisputed fact that demand notice was issued by the Operational Creditor on 01.10.2019 claiming an amount of Rs.9,26,970/- and interest amount of Rs.1,38,055/- from the Corporate Debtor. However, no notice of dispute was raised by the Corporate Debtor. It is also an undisputed fact in the present matter that the Operational Creditor did not receive any payment from the Corporate Debtor and therefore proceeded to file an application under Section 9 of IBC. The Appellant has however explained that the cheques issued by the Corporate Debtor were not for payment towards services rendered but for security towards commission received in advance from the Operational Creditor and hence cannot be treated as legally enforceable debt. Further these cheques were dishonoured as the Operational Creditor had presented them to the bank without knowledge of the Corporate Debtor. In the absence of any contractual agreement, no comments provided on the nature of business relationship between the two parties except for stating that it is a well settled legal proposition that the operative requirement of operational debt is that the claim must bear some nexus with a provision of goods or services, without specifying who is to be supplier or receiver. Whether there was any admitted debt on the part of the Appellant? - HELD THAT:- The emails are a clear admission of operational debt being due and payable. These emails have to be seen in the backdrop that no material has been placed on record by the Appellant controverting the content of these emails - the contention of the Corporate Debtor that there is no admitted debt is specious and lacks substance. Pre-existing disputes - HELD THAT:- The findings of the Adjudicating Authority that there is nothing on record to suggest that the Appellant raised any such dispute before receipt of invoices or at any period prior to the issue of demand notice. There is no exchange of correspondence raising any dispute prior to issue of demand notice. Even the complaint of delay purportedly received by the Appellant from its customers does not seem to have been shared with the Operational Creditor prior to Section 9 application. Thus, there is nothing credible to substantiate the pre-existence of dispute. This puts a serious question mark on the bona-fide of pre-existing disputes raised by the Corporate Debtor therefore, deserves to be disregarded being in the nature of a moonshine defence and an after-thought. Fees/expenses claimed by the Resolution Professional - HELD THAT:- During the active CIRP period, we may quickly glance through the major tasks undertaken by the Resolution Professional - there are not much substantial progress to have been accomplished in insolvency resolution by the Resolution Professional despite lapse of sufficient time. It has also been admitted by the Resolution Professional that since no resolution plan was forthcoming, the sole CoC member had decided not to proceed with CIRP. Thus, integrity and fairness demanded that the Resolution Professional ought to have facilitated the withdrawal of the CIRP application as was desired by the sole CoC member/Respondent No.1 without unduly prolonging the proceedings. It is commonsensical that for recovery of a claim of about Rs.10 lakhs, incurring an expenditure of Rs.19 lakhs by way of fees/expenses of the Resolution Professional would be outlandish and that too when there seems to be no possibility of revival of the Corporate Debtor - Keeping in mind the yardstick of reasonability, the fees of the Resolution Professional should be determined on the basis of work required to be performed or actually performed. Given the peculiar circumstances surrounding the present case, this is a fit case to invoke Rule 11 of NCLAT Rules, 2016 which provides that the inherent power of the Appellate Tribunal can be exercised to make such orders or give such directions as may be necessary for meeting the ends of justice or to prevent abuse of the process of the Appellate Tribunal. With the closure of CIRP, the appeal has become infructuous and stands disposed of.
|