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Insolvency and Bankruptcy - Case Laws
Showing 41 to 60 of 177 Records
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2021 (5) TMI 712 - NATIONAL COMPANY LAW TRIBUNAL , BENGALURU BENCH
Withdrawal of Resolution Plan after approval of the plan by CoC and pending approval by this Tribunal - Whether the EMD and the Performance Bank Guarantee deposited by the Resolution Applicant to participate in the resolution process of the Corporate Debtor, be returned to the Resolution Applicant or forfeited due to loss caused for withdrawing from the process at this juncture? - HELD THAT:- It is seen in the case at hand that the Resolution Applicant proposed a resolution plan on an understanding that the land required for generating 20 million saleable units annually was as mentioned in the IM. However, he was informed by the erstwhile Promoters that there was an additional 4th parcel of land, covering 42 acres, in use for the project and which was essential for generating 20 million saleable units. He was informed that 100 acres of land was required for this level of production and 58 acres was not sufficient. The erstwhile CD demanded ₹ 7.50 crore to hand over the 4th parcel of land. This was not brought to his notice earlier in the IM or otherwise.
The Resolution plan being based on the details made available to the Applicant under the Information Memorandum, any new discovery that would affect the interests of the Applicant adversely, and entitles the Applicant to decide his participation afresh, bearing in mind the changed situation and the possibility of future losses. The Resolution Applicant cannot be compelled to participate in resolution plan jeopardising its own interest. Even if the information provided by the erstwhile Promoter is incorrect, as mentioned by the RP in his objections, if a doubt is created in the mind of the Applicant with regard to the possibility of losses from the project, backed by an independent consultant's report, we are of the view that he would justifiably not be inclined to carry on as a Resolution Applicant.
The Resolution Professional admits in his objections that the erstwhile Promoter had not provided accurate information, as mentioned in the IM and had refused to cooperate, and that he was interested in blocking his efforts to complete the CIRP. In fact it is seen from his objections that in all parcels of land, the information provided is at variance, though he contests the contentions of the erstwhile Promoter. Whatever may have been the reason, either lacuna in estimating the requirement as well as availability of land for generation of power in a manner that is beneficial to the Applicant, or the lack of full and correct information provided by the erstwhile Promoters to the RP, the fact remains that there was a considerable disparity in what was represented to the Applicant regarding the area of land required for generating 20 million saleable units of power, which is required to maintain the Corporate Debtor as a going concern and what is actually required/made available.
The Resolution Applicant cannot be compelled to perform and execute the Resolution Plan when he apprehends huge losses, and should be permitted to withdraw the Plan submitted by him for approval of this Adjudicating Authority - Application allowed.
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2021 (5) TMI 711 - NATIONAL COMPANY LAW TRIBUNAL , BENGALURU BENCH
Maintainability of petition - seeking to delete the name of the Respondent No. 2 from the array of parties - Section 60(5) (a) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The Respondent No. 2 is not a party to the Business Transfer Agreement which is carried on between the Petitioner and the Respondent No. 1. Respondent No. 2 is an affiliate company of the Respondent No. 1 since April, 2020. All the rights and the liabilities arising out of the BTA are only within the domain of the Respondent No. 1 and the same cast no shadow up on the functioning or liabilities of the Respondent No. 2. Hence, this Application was made for deletion of Respondent No. 2.
The instant Application is filed in accordance with extant provisions of Code, and the reasons for removal of Respondent No. 2 are convincing, and as agreed to by the Petitioner. Therefore, it would be just and proper to remove the Respondent No. 2 from the list of Respondents - petition disposed off.
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2021 (5) TMI 709 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- The Letter of the Appeal Paper Book sent by Respondent through Ld. Advocate (supra) clearly shows that the dispute prior to issuance of Demand Notice - The representatives, Mr. Micheal & Mr. Sunil K. Deepati had visited the Respondent office on 17.07.2018 and the Respondent was informed by them that the Appellant is ready to resumption of further supply on 90 days L.C. but this fact has been concealed in the notice issuance of under Section 8 of the IBC.
The Adjudicating Authority has also taken note of the fact that the claim of an independent entity “M/s Connel Bros. Company (India) Pvt. Ltd. (“Connel”) was also included by the Appellant in their claim. So taking note of all these facts, we are of the considered view that there is pre-existing dispute between the parties much prior to issuance of Demand Notice under Section 8 of the IBC and there is no illegality in the order passed by the Ld. Adjudicating Authority.
The Appellant has failed to demonstrate that the impugned order suffers from any legal infirmity - Appeal dismissed.
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2021 (5) TMI 679 - NATIONAL COMPANY LAW TRIBUNAL , BENGALURU BENCH
Corporate Debtor under liquidation - Liquidator seeking to direct the Respondent No. 1 to deposit the GST along with applicable penalty/late fee and interest from the date of taking over of custody until date of payment to the account of the Corporate Debtor - HELD THAT:- Mr. Shivarama Krishnan, Ld. Counsel for the Respondent 1, State Bank of India informed that the GST collected on account of the sale of various assets, as mentioned in the Application and whose transfer to the account of Corporate Debtor has been sought by the Applicant Liquidator, has already been transferred to the account of the Corporate Debtor which is being managed by the Liquidator. It has been stated that the SBI had made a payment of ₹ 32,54,53,666 on 20.04.2019 which included the amount of ₹ 4,60,24,276 which was attributable to the assets of the Applicant Company and the same was intimated by way of letter dated 02.01.2021. A copy of the letter has been attached. Hence, the grievance of the Applicant Liquidator as mentioned in the Petition has been redressed, and hence this Application becomes infructuous.
Petition is dismissed as infructuous.
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2021 (5) TMI 678 - NATIONAL COMPANY LAW TRIBUNAL , BENGALURU BENCH
Seeking direction to Respondent to provide the Applicant with Accounting data from financial years 2013-14, 2014-15 - seeking to provide free and complete access to all the financial records of the Corporate Debtor, equipments and other assets without any hindrances from any one to protect the assets of the Corporate Debtor etc. - HELD THAT:- It is settled position of law that once CIRP is initiated, all the personnel including Directors/MD of Corporate Debtor, have to extend necessary co-operation to IRP/RP in carrying out their duties. Since the Adjudicating Authority has already directed all the personnel of CD to extend full co-operation to the Applicant and the law is also clear on the issue, it is for the Applicant to discharge his duties effectively at the ground level, instead of rushing to the Tribunal raising all those issues which ought to be settled by himself, being experience Resolution professional. Therefore, the instant Application can be disposed of by directing the Respondent to extend necessary cooperation to the Applicant.
Application is disposed of by the directing the Respondent to extend necessary co-operation to the Applicant in respect of CIRP of Corporate Debtor.
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2021 (5) TMI 666 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , CHENNAI
Liquidation of Corporate Debtor - real grievance of the ‘Appellant’ is that the ‘Adjudicating Authority’ had failed to consider the efforts at resolving the debt of the ‘Corporate Debtor’ in the teeth of the Insolvency and Bankruptcy Code, which provides for ‘Liquidation’ in the event of failure of ‘CIRP’ or non-receipt of any ‘Resolution Plan’ within the specified period - HELD THAT:- The claim of the ‘Resolution Applicant’ was rejected by 76.02% of voting share by the ‘Financial Creditors’, in the 23rd ‘Committee of Creditors’ meeting that took place on 30.11.2020, of course, after taking into account of the feasibility and viability, etc., as mentioned in CIRP Regulations. Moreover, e-voting was held from 05.12.2020 to 07.12.2020.
This ‘Tribunal’ keeping in mind of a primordial fact that the decision of the ‘Committee of Creditors’ takes a pivotal seat based on ‘Commercial Wisdom’, taking note of the fact that the ‘Committee of Creditors Members’ with 76.02% voting share had voted against the ‘Resolution Plan’ and in the teeth of ingredients of 33(2) of the Insolvency and Bankruptcy Code, 2016, comes to a irresistible conclusion that the ‘impugned order of Liquidation’ in respect of the ‘Corporate Debtor’ passed by the ‘Adjudicating Authority’ is free from legal infirmities - Appeal dismissed.
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2021 (5) TMI 649 - NATIONAL COMPANY LAW TRIBUNAL , BENGALURU BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- The present proceedings relate to a petition filed under the IBC 2016 and, therefore, the findings shall be within and for the purpose of the Code only. All issues and disputes that can be agitated in other forums can be dealt with separately, for which there are sufficient clauses in the various agreements entered into between the parties.
The debt claimed by the Petitioner, as arising from the refundable security deposit does not constitute an operational debt u/s. 5(21) of the Code. If the debt is arising from the nonpayment of installments or parting of assets as per the terms of a settlement, as incorporated in various agreements, the same will also not constitute operational debt as the same is not resulting from any operational activity. Also, a petition which is filed for breach of any settlement agreement treats this Tribunal as a recovery forum, which is not permissible.
The Petitioner Aayas cannot be termed as the Operational Creditor, when the main creditor is Elbit India, later joined by Koyenco, in view of the peculiar circumstances narrated above, nor can Respondent MDPL be termed as the Operational debtor by itself, leaving out Minerva which acquires a significant role in development and after 22.07.2010 and for investment in the second stage. Lastly, without taking recourse to the detailed inbuilt dispute resolution mechanism and agitating the above complex matters straightaway before this Tribunal and under the Code, makes the Petition clearly premature.
Petition dismissed as being premature and not maintainable.
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2021 (5) TMI 647 - NATIONAL COMPANY LAW TRIBUNAL , BENGALURU BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - Lease agreement - Arbitration Clause in the agreement - ex-parte award - whether the Petition is maintainable for execution of Award in question? - HELD THAT:- The basic facts with reference to leasing of premises, default arise out of Lease Agreement, not paying awarded amount, etc. are prima facie are not in dispute. The Award was passed out of rental dispute, and in the normal circumstances, such disputes have to be settled by approaching Rent controller Courts/Authorities constituted for said purpose. However, they have invoked Arbitration Clause available in their Agreement and got ex parte Award in question. Aggrieved by the said Award, the Respondent is stated to have filed an Appeal, which is stated to be pending before the Hon'ble Delhi High Court.
Both the Learned Counsels relying on the same judgement in support of their case, viz., K. KISHAN VERSUS M/S VIJAY NIRMAN COMPANY PVT. LTD. [2018 (9) TMI 1533 - SUPREME COURT]. By reading of this judgement, what we understand is that operational dispute in question cannot be called un-disputed as long as Arbitration Award is under challenged U/s 34 of Arbitration and Conciliation Act, 1996. Wherein it is inter alia held that the object of Code, in so far as Operational Creditors are concerned, to put the insolvency process against Corporate Debtor only in clear cases where a real dispute between the parties to debt owed does not exist.. Further filing of S. 34 of Act against an arbitral award shows that a pre-existing dispute which culminates at the first stage of proceedings in an award, continues even after the award at least till the final adjudicatory process U/s 34 & 37 of Act has taken place. Therefore, the operational debt in question deemed to be a dispute, as the Respondent stated to have filed Appeal against the Award in question.
Filing of the instant Petition is filed on misconception of fact and law, and it is solely filed for recovery of amount awarded in Arbitration - Petition dismissed.
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2021 (5) TMI 646 - NATIONAL COMPANY LAW TRIBUNAL , BENGALURU BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- Though the dispute may not be pre-existing, in this case the liability is denied as no services are established to have been provided by the Petitioner for the period September 2018 to February 2019 for which the payments are demanded.
From the submissions made by the Corporate Debtor, it is seen that it is a critical supplier to the Defence sector and Indian Space Programme, and is involved with several projects of strategic importance, and is the only private company in India having a licence from the Government of India for undertaking Missile Refurbishment and upgradation. It also exports sophisticated micro-electronic products to various countries. It has a Paid up Capital of ₹ 49.99 crores and revenues of ₹ 11.48 crores for the FY ending 31.03.2020 and has about 65 employees in the Company - it is not the intent behind the IBC to destabilise and subject to the rigours of CIRP, profit making viable going concerns engaged in tasks of national importance and push them into liquidation. It is therefore clear that the Petitioner seeks to use this Tribunal as a mere recovery forum, which is not acceptable, being against the spirit of the Code. It is a settled position of law that the provisions of Code cannot be invoked for recovery of outstanding amount but they can be invoked to initiate CIRP for justified reasons as per the Code.
It is clear that a debt which has been denied, is not backed by any evidence, and the Petition is filed for the purpose of recovery against a solvent going concern contributing immensely to the country's economy the Petition deserves to be dismissed. It is certainly not a case where the Corporate Debtor is unable to repay its debts on account of its inability to pay that requires a resolution - Petition dismissed.
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2021 (5) TMI 644 - NATIONAL COMPANY LAW TRIBUNAL , CHENNAI BENCH
Application for withdrawal of CIRP initiated against Corporate Debtor - HELD THAT:- The Application as filed by the Applicant/IRP as well as the sole Operational Creditor who had constituted the CoC had given its approval seeking withdrawal of the CIRP initiated by this Tribunal, based on the Application filed by the Operational Creditor/1st Respondent in Form 'FA' and also considering the Provisions of Section 12(A) and Regulations 30(A) of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 as well this Application in relation to seeking for withdrawal of the CIRP is allowed.
Let the reins of the Corporate Debtor with the IRP be handed over to the Board of Directors, whose powers stood suspended by virtue of initiation of the CIRP as against the Corporate Debtor.
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2021 (5) TMI 643 - NATIONAL COMPANY LAW TRIBUNAL, BENGALURU BENCH
Maintainability of application - initiation of CIRP - Corporate debtor failed to make repayment of its dues - Operational creditors - existence of debt and dispute or not - HELD THAT:- When the Respondent failed to clear outstanding dues for the service rendered by the Petitioner, it has terminated the Service Agreement in question, vide Notices dated 20.11.2019 and 20.12.2019 by demanding to pay outstanding amounts. When efforts made by the Petitioner could not succeed, the Petitioner got issued a Demand Notice dated 27.01.2020 to the Corporate Debtor in Form 3, through their Counsel, which was duly served on the Corporate Debtor on 30.01.2020. Despite receiving the Demand Notice, the Corporate Debtor has neither intimated the existence of any dispute within a period of ten (10) days from the date of receipt of notice (30.01.2020), nor made any payment to the Operational Creditor towards the same. Therefore, the debt and default in question are deemed to be admitted, and thus the Respondent committed default of debt. The Petitioner has substantiated the debt and debt in question by enclosing all relevant documents.
Since the learned counsel for the Respondent conveyed the willingness of Respondent to settle the claim in question, we are inclined to give one more chance to settle the claim before initiating CIRP as prayed for. Therefore, it would be just and proper to grant time to the Respondent to settle the claim by disposing of the Petition, instead of keeping the case pending for settlement, which is not contemplated under the provisions of Code.
Petition disposed off.
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2021 (5) TMI 641 - NATIONAL COMPANY LAW TRIBUNAL , KOLKATA BENCH
Liquidation of the Corporate Debtor - resolution plan submitted by the sole resolution applicant Select Products Private Limited was not approved through a vote exceeding 66% - Section 33 of the Insolvency & Bankruptcy Code, 2016 - HELD THAT:- Section 33(2) of the Code enjoins the Adjudicating Authority to pass an order for liquidation of the Corporate Debtor where the resolution professional, at any time during the CIRP but before confirmation of the resolution plan, intimates the Adjudicating authority of the decision of the CoC approved by not less than sixty-six percent of the voting share, to liquidate the Corporate Debtor. In the present case, the CoC has resolved by 99.99% voting share to liquidate the Corporate Debtor.
The Corporate Debtor is ordered to be liquidated in terms of section 33(2) of the Code read with Sub-section (1) thereof - Application allowed.
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2021 (5) TMI 616 - NATIONAL COMPANY LAW TRIBUNAL , BENGALURU BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- It is not in dispute that the Respondent paid principal amount and only payment of interest is stated to be delayed in accordance with the Terms and Conditions of Sale. It is not known whether any prior purchase agreement was executed between the parties, prior to supply of goods in question. The Respondent has also denied receipt of any statutory demand notice as required under the provisions of Code. Moreover, the instant Petition is alleged to have filed to recover interest part, that too against solvent Company. And mere agreeing to pay outstanding cannot automatically entitled a party to invoke provisions of Code. It is also to be noted that provisions of Code are being suspended periodically by the Govt. of India to give relief to affected industry. Therefore, invocation of provisions code in the present circumstances is too premature and not justified basing on facts and circumstances.
Petition is hereby disposed of by directing the Parties to explore the possibility of settling the issue in question as expeditious as possible, failing which, the Petitioner is entitled to approach this Adjudicating Authority by filing appropriate Petition in accordance with law.
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2021 (5) TMI 613 - NATIONAL COMPANY LAW TRIBUNAL , KOLKATA BENCH
Revaluation of Corporate Debtor - Revaluation sought so that resolution plan can be revised - HELD THAT:- It appears from the record that the resolution of the present Corporate Debtor has been in lurch since the beginning. It appears from the record that the 180 days' CIRP period had expired on 02.09.2019, upon application, this Adjudicating Authority vide its order dated 30.08.2019 approved the extension of the CIRP period for further ninety days which expired on 01.12.2019. This Adjudicating Authority extended the said period further by forty five days upon submission on behalf of the RA that they were desirous of substantially increasing their financial offer.
It is seen that the CoC had been repeatedly requesting the RA to increase the amount proposed and the RA had increased the said amount by a sum that was not acceptable to the CoC. The CoC had therefore decided to send the CoC in liquidation and an application was filed before this Adjudicating Authority.
Section 33(2) of the Code enjoins the Adjudicating Authority to pass an order for liquidation of the Corporate Debtor where the resolution professional, at any time during the CIRP but before confirmation of the resolution plan, intimates the Adjudicating authority of the decision of the CoC approved by not less than sixty-six percent of the voting share, to liquidate the Corporate Debtor. In the present case, the CoC has, by 97.21% votes, resolved to liquidate the Corporate Debtor - we are not inclined towards granting the prayer for revaluation of the Corporate Debtor.
Application dismissed.
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2021 (5) TMI 612 - NATIONAL COMPANY LAW TRIBUNAL , MUMBAI BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT:- From the Application it is noted that the outstanding debt amount is approximately ₹ 84.87 Crores and the account was classified as NPA/default on 10.04.2019. The Application was filed in the month of January 2019 and in spite of lapse of more than one and half years the Respondent did not pay even a single rupee to the Petitioner despite various assurances/submissions made during the course of the submissions - the debt and default under Section 7 of the IBC, 2016 is established. The Petition is complete in all respect and there is no reason to deny admission of this Petition held under Section 7 of IBC and to initiate CIRP proceedings against the Respondent.
The outstanding debt amount is approximately ₹ 84.87 Crores and the account was classified as NPA/default on 10.04.2019. The Application was filed in the month of January 2019 and in spite of lapse of more than one and half years the Respondent did not pay even a single rupee to the Petitioner despite various assurances/submissions made during the course of the submissions. Finally, during the hearing held on 14.12.2020, Ld. Counsel for the Respondent submitted that settlement had failed. In view of the same, the debt and default under Section 7 of the IBC, 2016 is established. The Petition is complete in all respect and there is no reason to deny admission of this Petition held under Section 7 of IBC and to initiate CIRP proceedings against the Respondent.
Under section 7(5) of IBC "where the Adjudicating Authority is satisfied that a default has occurred and the application under sub-section (2) is complete, and there is no disciplinary proceedings pending against the proposed RP, it may, by order, admit such application;" It clearly shows that the Respondent is in default of a debt due and payable, and the default is in excess of minimum amount of one lakh rupees stipulated under section 4(1) of the IBC. In the facts and material made available on record, it is satisfying that debt and the default stands established and no disciplinary proceedings pending against the proposed IRP therefore the petition deserves to be admitted and there is no reason to deny the admission of the Petition.
Petition admitted - moratorium declared.
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2021 (5) TMI 611 - NATIONAL COMPANY LAW TRIBUNAL , GUWAHATI BENCH
Seeking extension of time allowed to him to liquidate the Corporate Debtor due to time lost on account of Covid pandemic - section 60(5)(c) read with Regulation 47A of the Insolvency and Bankruptcy Board of India (Liquidation Process) regulations, 2016 - HELD THAT:- The relevant provisions of Section 60(5)(c) of the I.B. Code, 2016 read with Regulation 47A of the of Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 are examined and exclusion of time for the period 25.03.2020 to 31.13.2020 from the time allowed to complete the liquidation process is allowed as prayed for.
Application disposed off.
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2021 (5) TMI 610 - NATIONAL COMPANY LAW TRIBUNAL , CHENNAI BENCH
Dissolution of the Corporate Debtor - Section 54(1) of the Insolvency & Bankruptcy Code, 2016 read with Regulation 45(3) of the Insolvency and Bankruptcy Board of India (Liquidation Process Regulations), 2016 - HELD THAT:- From perusal of the final report and the Compliance Certificate filed in Form-H by the Applicant, it is seen that the Corporate Debtor has been completely liquidated and in the circumstances as averred and as prayed for by the Applicant that an order for dissolution is required to be passed by this Tribunal under Section 54 of the IBC, 2016.
The dissolution of the Corporate Debtor viz., M/s. Business Jets (India) Private Limited is ordered - application allowed.
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2021 (5) TMI 609 - NATIONAL COMPANY LAW TRIBUNAL , NEW DELHI BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - Operational Creditors or not - existence of debt and dispute or not - contention of the Petitioner's counsel is that since no dispute has been raised within 10 days from the receipt of the demand notice, therefore, it is no dispute - HELD THAT:- Earlier when the first demand notice was served upon the Corporate Debtor, he sent the reply within the prescribed period and raised the dispute. However, that company petition was dismissed as withdrawn at the request of the petitioner on technical ground - The contention of petitioner's counsel is that since in that matter, the demand notice was delivered through the counsel, the petitioner during the course of hearing had made a prayer to withdraw the petitioner with a liberty to file a fresh application and accordingly, that Application was dismissed as withdrawn. Again, the second demand notice was served upon the Corporate Debtor. Of course, the Corporate Debtor had not given reply to that demand notice but after appearance, the Corporate Debtor has filed the reply and annexed the emails exchanged between the parties.
There are several emails exchanged between the parties regarding the termination of contract letter dated 20.11.2014 and dispute being raised regarding the quality of the work and the violation of the terms and conditions of the contract by the Corporate Debtor, which compelled the Corporate Debtor to cancel the contract - petitioner has failed to produce any document to show that in the light of the email exchanged between the parties, the termination of contract was recalled.
The documents placed by the Corporate Debtor on record have established that there was a pre-existing dispute between the parties regarding the quality of the goods as well as the amount of debt and the matter had already been referred as per Clause 39.00 of the agreement for Arbitration - even no reply to the demand notice was sent in terms of Section 8(2) of the IBC, 2016, the Corporate Debtor can raise a dispute by filing the reply and that has been done by the Corporate Debtor - Also, the deduction of TDS amounts to acknowledgement of debt.
Time Limitation - HELD THAT:- In Part-IV column-II, the applicant has mentioned several dates of default and according to that, the first date of default is 30.01.2010 and the last date of default is 27.04.2017, whereas the contention of the respondent is that the contract was terminated on 20.11.2014 and therefore, the cause of action arose on that day - Mere plain reading of the provision shows that the application must be filed within three years from the date when the right to apply accrues - The petition is also barred by limitation.
Petition dismissed.
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2021 (5) TMI 582 - NATIONAL COMPANY LAW TRIBUNAL , BENGALURU BENCH
Initiation of CIRP - Petitioner are Homebuyers - Petitioner does not meet the minimum threshold of 10% of Financial Creditors of the same class - existence of debt and dispute or not - Respondent charged higher price of the changed apartment than the earlier one, which was not accepted by the Applicants and hence no agreement was signed for the same. - RERA directed the Corporate Debtor to refund the amount of ₹ 21,94,222/- with interest @ 9% per annum - The Corporate Debtor failed to comply with the order passed by the K-RERA
HELD THAT:- As per the insolvency and Bankruptcy Code, (Amendment) Ordinance, 2019 dated 28.12.2019 the financial creditors who are homebuyers of Real Estate Project can file a petition under section 7 of the Code, 2016, jointly only if there are 100 of such homebuyers or if they are 10% of total homebuyers whichever is less. However, in the instant petition, only 2 Homebuyers have filed the case which neither amounts to 10% of the total class of financial creditors or 100 Financial Creditors and therefore this petition cannot be entertained.
In the instant case, the Petitioners have already obtained order from the relevant forum under the RERA Act and the same can be executed before relevant forum. A case under the Code, 2016 is not made out as the petition is clearly an attempt to substitute the recovery mechanism and amounts to forum shopping. Further, since the Petitioner does not meet the minimum threshold of 10% of Financial Creditors of the same class, the petition fails and deserves to be dismissed.
Petition dismissed.
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2021 (5) TMI 581 - NATIONAL COMPANY LAW TRIBUNAL , BENGALURU BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- Petitioner has not provided any material to establish insolvency of the Respondent company. The master data details of the Respondent company available on the MCA website show that the company is active and compliant and has no pending charges on assets showing a good working condition of the company. In the absence of specific data regarding insolvency of Respondent, we are unable to determine that the company is insolvent, which is the main reason to push a company into the rigours of the CIRP. If the non-repayment of debt is not because of insolvency, but rather due non fulfilment of business commitment by the other side, then the Petition remains one only seeking recovery, treating this AA as a debt recovery forum, which is not permissible. Also, an undisputed debt is a sine qua non for initiating any process u/s. 9 of the Code.
The impact of the present financial distress caused by the global novel corona virus pandemic necessitating a nationwide lockdown, cannot be ignored. Major decisions have been taken to protect Industry from its effects, to inject economic stimulus and to revive the economy. More specifically, on 24.03.2020 the Legislature increased the minimum threshold of default from ₹ 1 Lakh to ₹ 1 Crore so that the Code is not used merely for recovery of debt.
Respondent has raised various reasons why the debt is not paid and at the same time admits liability and seeks more time to pay the same, and also that the Respondent is a going concern, thus in the totality of facts and circumstances including the bad economic scenario prevailing in the country, this is not a case fit for initiating CIRP and that it would be in the interest of justice to allow the Respondent some more time to negotiate with the Petitioner and settle the debt at the earliest.
Application disposed of by directing the Respondent/Corporate Debtor to repay the debt or the amount as mutually settled with the Petitioner within a period of six months, failing which, the Petitioner would be at liberty to file a fresh petition for admission.
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