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2020 (12) TMI 244 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- Instant Company Petition is filed to recover the outstanding amount in question. As per the Purchase Orders, the terms of payment is 60 days credit from Date of receipt of material and cause of action started to arise from the year 2016. The provisions of the Code cannot give any cause of action and cause of action rise with reference to facts of given case. Therefore, demand notice issued under the provisions of Code would not give cause of action to file the instant Petition. The Respondent has addressed a letter dated 14th December, 2017 to the Petitioner by inter alia confirming that they would clear the dues before 5th of January, 2018 with 24% interest Per annum. It is to be stated that the provisions of Code can be invoked to initiate CIRP on justified reasons, and it cannot be invoked with an attempt to recover outstanding amount. The Petitioner has not averred and substantiated that the Corporate Debtor has become insolvent. It is a settled position of law that the provisions of Code cannot be invoked for recovery of outstanding amount. The instant Company Petition is filed with an intention to recover the outstanding amount rather than to initiate CIRP in respect of the Corporate Debtor, which is against the object of the Code and the Petitioner also failed to substantiate the insolvency of the Corporate Debtor. Though the instant Petition is not a fit case to initiate CIRP for the aforesaid reasons, the Respondent is prima facie liable to be pay the admitted outstanding amount, and thus it would be just and proper for the Corporate Debtor to settle the admitted debt, instead of forcing the Petitioner again to approach judicial forum. Application dismissed.
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