Home Case Index All Cases Insolvency and Bankruptcy Insolvency and Bankruptcy + Tri Insolvency and Bankruptcy - 2020 (12) TMI Tri This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (12) TMI 642 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of its debt and dispute or not - Petitioner is a responsible Bank and the custodian of public money - HELD THAT:- It is clear from the submissions and the long history of efforts of the Petitioner to repay it's the debt, the matters being taken to Court, several attempts at OTS which the Petitioner has repeatedly gone back upon, and the present position wherein an offer of settlement made by the Respondent is pending before the Petitioner Bank, that the Respondent is keen to settle the debt but is constrained because of the temporary lull in business due to Covid pandemic and the lockdown and is therefore only seeking deferment in loan repayment instalments, that the as on date the Petition is not ripe for consideration and is premature. The provisions of Code cannot be invoked for recovery of outstanding amount but it can be invoked to initiate CIRP for justified reasons as per the Code. The Hon'ble Supreme Court in the case of MOBILOX INNOVATIONS PRIVATE LIMITED VERSUS KIRUSA SOFTWARE PRIVATE LIMITED [2017 (9) TMI 1270 - SUPREME COURT], has inter alia, held that I&B Code, 2016 is not intended to be substitute to a recovery forum. The Code cannot be used prematurely or for extraneous considerations or reasons as a substitute for debt enforcement procedures - this Petition is only filed to use this Tribunal as a recovery forum in its continuing recovery actions against the Respondent Corporate Debtor, and in any case is premature as an accepted OTS proposal is pending final approval of the Petitioner Bank. The fact is also taken into account that due to the Covid-19 pandemic, the Central and State governments have ordered lockdowns for different periods which led to large scale hindrance to movement of men and material. This has impacted businesses all over India, and has necessitated several pronouncements for facilitating business. Statutory changes such as increase of thresh hold limit for filing a petition under the IBC for initiating CIRP, suspension of CIRP, deferment of loan repayments and restructuring of debt etc. have been made to prevent businesses from going into liquidation. Under the circumstances narrated in the objections filed by the Respondent, it is clear that its business has been hampered in the current economic scenario, as all the Educational Institutions and Universities have postponed examinations and no tentative dates are fixed for any examination. Since the Respondent has offered new terms of payment, the matter is pending before the Petitioner, and since the proposal for deferment is for genuine reasons namely effect of Covid-19 pandemic on its business, as on all businesses, this Petition is premature in the present circumstances. Though the Petition is not found fit for admission, the fact is also considered that the Petitioner is a responsible Bank and the custodian of public money and has to effectively discharge its onerous banking functions. Hence, in the facts and circumstances of the case, at this point in time it would be premature to either dismiss or admit the Petition. It is considered just to dispose of the Petition granting liberty to the Petitioner to file a fresh Petition if the debt owed is not repaid by the Respondent, as per the settlement talks that are admittedly in progress and pending before the Petitioner Bank, within a reasonable time, provided a case is otherwise made out as per the provisions and objectives of the Code - petition disposed off.
|