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2023 (7) TMI 312 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - service of demand notice - privity of contract - HELD THAT:- In Form 3, Demand Notice / Invoice, demanding payment, under I & B Code, 2016, as per Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, dated 30.07.2021, addressed to the Vantage Machine Tools Private Limited, represented by Mr. Pothluru Mohana Murali Krishna, Krishna District, under Particulars of Operational Debt, the Total Debt, as on 22.07.2021, was mentioned as Rs.3,04,76,004/-, and the Principal Outstanding, was mentioned as Rs.1,53,16,611/-. The interest outstanding, as on 22.07.2021, was Rs.1,51,59,393/-, and that the total Outstanding as on 22.07.2021, was Rs.3,04,76,004/-. The Corporate Debtor, in its Counter, before the Adjudicating Authority, had averred that the alleged Principal Amount, claimed by the 1st Respondent / Operational Creditor / Petitioner, and Interest, claimed thereon, as consequential damages, is completely arbitrary and baseless, which cannot be relied upon in the absence of adjudication, and further that the alleged Claim, was not adjudicated, by any Competent Authority, in Law, and therefore, such a Claim, cannot be described as Operational Debt. The Corporate Debtor, before the Adjudicating Authority / Tribunal, took a stand that the alleged Claim, of the 1st Respondent / Operational Creditor / Petitioner, was based on misconstruction of facts, devoid of merits, and as such, the Company Petition, was not maintainable in Law, and the same was liable to be dismissed. It is to be remembered that the Proceedings, under the I & B Code, 2016, are Summary in Character, and that an Adjudicating Authority, not being a Recovery Fora or Court, (no elaborate enquiry is conducted like that of a Regular Trial of a Civil case, and also, it does not determine, a Money Claim or Civil Suit, this Tribunal, is of the earnest opinion, that the Controversy / Dispute / Claim, in respect of Interest, based on Privity of Contract or otherwise, has no relevance / significance, if the Debt, payable is more than the threshold limit of Section 4 of the I & B Code, 2016, considering the fact that the Principal Outstanding, as mentioned in Form 3 of the Demand Notice dated 30.07.2021, was Rs.1,53,16,611/- (which is more than Rs.1 Crore), to be paid by the Corporate Debtor / M/s. Vantage Machine Tools Private Limited. In Law, once the Debt, shown as Due, it is for the Corporate Debtor, to establish that, there are no Outstanding Dues, to be paid to an Operational Creditor. This Tribunal, points out that the aspect of determining a Claim, which may include the interest by an Adjudicating Authority / Tribunal, does not arise for the purpose of triggering the Corporate Insolvency Resolution Process, because of the fact that an initiation of Corporate Insolvency Resolution Process, under Section 7 or 9 of the I & B Code, 2016, will not amount to a Recovery Proceeding - It cannot be lost sight off that it is incumbent upon the Corporate Debtor, to show that its Liability, is in Dispute, as to the Debt, and not a just demand, made by it, to satisfy certain obligations, on the part of the 1st Respondent / Operational Creditor / Petitioner. In the instant case on hand, this Tribunal, considering the contentions advanced on the respective sides, taking into account of the Part Payments, made by the Corporate Debtor, under Invoices, and keeping in mind of the Email dated 02.11.2017, whereby the Debt confirmation, was made by the Corporate Debtor, and the same being received by the 1st Respondent / Operational Creditor / Petitioner, on 03.11.2017, considering the fact that the Part Payment of Rs.10,00,000/- and another payment for Rs.20,00,000/-, by the Corporate Debtor, was made, one day earlier, on to the mail dated 03.10.2017, and keeping in mind of the facts and circumstances of the instant case, in an encircling manner, comes to a consequent conclusion that the Debt and Default, committed by the Corporate Debtor, were established, by the 1st Respondent / Operational Creditor / Petitioner, and hence, the Outstanding Debt, is due and payable in Law, by the Corporate Debtor, to the 1st Respondent / Operational Creditor / Petitioner, and that the Admission of the CP(IB) No.51 / 9 / AMR / 2021, by the Adjudicating Authority (National Company Law Tribunal, Amaravati Bench), is a just, Valid and Proper one, in the eye of Law. Appeal dismissed.
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