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Insolvency and Bankruptcy - Case Laws
Showing 21 to 40 of 188 Records
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2020 (9) TMI 1195 - NATIONAL COMPANY LAW TRIBUNAL, HYDERABAD
Seeking extension of time period of CIRP for a period of 90 days excluding lockdown period - Section 12 of the Insolvency & Bankruptcy Code, 2016 (Code) read with Regulation 12 (2) of IBBI(Insolvency Resolution Process for Corporate Persons) Regulations 2016 - HELD THAT:- As per the decision taken by COC it is prayed that this Adjudicating Authority may be pleased to issue order extending the CIRP process by a period of 90 days from 17.7.2020 excluding the lock down period of 72 days (till 15.10.2020).
The extension of CIRP by 90 days is granted and the period of 72 days from 27" August, 2020 to 15" October, 2020 is also considered for being excluded while calculating the number of available days for CIRP calculation.
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2020 (9) TMI 1193 - NATIONAL COMPANY LAW TRIBUNAL, KOCHI BENCH
Seeking extension of time period of Corporate Insolvency Resolution Process - Section 40(2) of CIRP Regulation and as per Section 12(2) of IBC 2016 - HELD THAT:- On going through the pleadings on record as also the minutes of the 6th COC meeting held on 15.9.2020 in which a resolution was passed to file application under Section 40(2) of CIRP Regulation and as per Section 12(2) of IBC 2016 for a time period extension of 30 days with effect from 13.9.2020 so as to consider and evaluate the revised Resolution plan.
The prayer for extension of Corporate Insolvency Resolution Process period for extension of 30 days with effect from 13.09.2020 is allowed - Application allowed.
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2020 (9) TMI 1188 - NATIONAL COMPANY LAW TRIBUNAL, CHENNAI
Seeking condonation of delay of 230 days in preferring Company Petition - availability of Section of the Limitation Act, 1963 to an Application filed under Section 7 or Section 9 by a Creditor - HELD THAT:- The Hon'ble Supreme Court of India in B.K. EDUCATIONAL SERVICES PRIVATE LIMITED VERSUS PARAG GUPTA AND ASSOCIATES [2018 (10) TMI 777 - SUPREME COURT] has stated that Limitation Act is applicable since the inception of the Code (IBC, 2016) while posing itself with a query as to whether the Limitation Act, 1963 will apply to Applications that are made under Section 7 and or Section 9 of the Code (IBC, 2016) on and from its commencement on 01.12.2016 to 06.06.2018 (date of amendment of insertion of Section 238-A coming into effect), Referring to the Report of the Insolvency Law Committee of March, 2018 in this regard and after extracting paragraph 28.1 to 28.3 of the said Report and highlighting that the Code (IBC, 2016) could not have been to give a new lease of life to debts which are time barred and has thereby gone to give a finding that the Limitation Act is applicable from the inception of the Code.
The reasons hence given in the Application that since the Limitation Act, 1963 came to be applied only from 06.06.2018 and in the circumstances in effect there has been a laxity on the part of the Applicant to approach this Tribunal also does not hold much water in view of the observations made by the Hon'ble Supreme Court of India that bringing into effect the amendment on and from 06.06.2018 by insertion of Section 238-A of IBC, 2016 is more by way of only a clarification about the applicability of the 'Limitation Act' and cannot be claimed to be made applicable only from the date when the 'Amendment Act' came into force on 06.06.2018.
The pleadings have failed to clearly bring out as to how the number of day's delay as stated in the Application of 230 days has been computed giving out clearly the start and end date. Even when the learned Counsel for the Respondent specifically raised the issue, Learned Counsel for the Applicant was not in a position to answer the issue - thus, no sufficient cause has been demonstrated to involve Section '5' of the Limitation Act, 1963, even assuming it can be applied at all.
The Application seeking for condonation of delay, in filing a Petition / Application under Section '9' of IBC, 2016 invoking Section '5' of the Limitation Act, 1963 stands dismissed.
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2020 (9) TMI 1181 - NATIONAL COMPANY LAW TRIBUNAL, DIVISION BENCH - 1, CHENNAI
Restraint on Respondent Liquidator to create any third party interest by way of auction, sell or proceed to deal with the property otherwise or deal with the EMD remitted by Applicant - liability to pay the sum of ₹ 6 Lakhs to the Liquidator over and above the successful bid amount of ₹ 130 Lakhs - HELD THAT:- It is seen that the Applicant has paid a sum of ₹ 10 Lakhs as EMD and the remaining sum of ₹ 120 Lakhs is yet to be paid and the Counsel for the Applicant has submitted that they are ready with the amount to be paid to the Liquidator. Taking into consideration, the said representation, we direct the Applicant to pay the remaining amount of ₹ 120 Lakhs to the Liquidator within seven days from the date of receipt of the Order. Further, the Applicant is also directed to pay a um of ₹ 6 Lakhs to the Liquidator towards Maintenance Security Deposit within the said period of 7 days from the date of receipt of this order and the same to be remitted to DLF. Upon receiving the total bid amount and the Maintenance Security Deposit, the Liquidator is directed to execute the sale deed and hand over the possession of the property along with title documents within a period of 7 days thereafter and further it is clarified that the Liquidator will pay the pending tax arrears to MCD as undertaken.
Application disposed off.
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2020 (9) TMI 1177 - CALCUTTA HIGH COURT
Wilful Defaulter - Reserve Bank's Master Circular on wilful default published on July 1, 2015 - funds diverted by its promoters for purposes other than for which the credit facilities had been accorded - HELD THAT:- On a meaningful reading of the relevant Master Circular, it is evident that any juristic entity can be labelled as a wilful defaulter though the mens rea element of the wilfulness of the default has, per force, to fasten onto some human agency. In other words, the human agencies in control of an inanimate juristic entity have to be found guilty of wilful default within the meaning of such expression as used in the Master Circular for the penal measures to attach to the juristic entity in default and also to the human agencies found responsible for the wilful default - There could be myriad situations covered by the Master Circular and the finding of wilful default. There could be a case where credit facilities were granted without any securities being obtained or personal guarantees being sought. In such a case, even though the human agencies responsible for the actions of the inanimate juristic entity may be found to be in wilful default along with the juristic entity, that is, the borrower, no independent financial obligation would fasten to the human agencies since they may not have extended any guarantee or created any mortgage of their personal properties.
In the present case, since no personal guarantee was furnished by any of the writ petitioners, the moment the money due to Axis Bank was paid in full or was agreed to be received by way of a compromise, the writ petitioners stood rid of their burden as wilful defaulters and their names were liable to be removed from the relevant list. If, however, the writ petitioners continued in their capacity as guarantors in respect of the relevant transactions, the writ petitioners would have continued to be liable till the entire debt was discharged. But as the writ petitioners did not have any personal liability, the moment the resolution was approved and Axis Bank received the payment or is deemed to have received the payment, the names of the petitioners ought to have been taken off the list of wilful defaulters. As a consequence, the moment the writ petitioners were entitled to have their names removed from the list, the first sentence in the relevant sub- clause would not apply.
Though the Reserve Bank has appeared at a belated stage, it has appropriately indicated the position in terms of its Master Circular of July 1, 2015. Accordingly, the Reserve Bank should take immediate steps to ensure that the names of the writ petitioners are removed from the list of wilful defaulters and the deletion will take effect from February 28, 2019.
Appeal disposed off.
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2020 (9) TMI 1173 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - application rejected on the ground that the application is barred by limitation and was filled before it more than 3 years after the default - time limitation - HELD THAT:- The Financial Creditors issued a notice of recall dated 7th December, 2017 demanding the payment of the total overdues as on that date within a period of 15 days from the date of notice of recall. Thus the payment for Quarter ending December 2017 to September 2025 will become due and payable and come under default on 22nd December, 2017 i.e. on the expiry of 15 days from the date of default notice which was served upon the Corporate Debtor for recalling the loans. Thus the default cannot occur before the amount becomes due and payable as per the Second Amendment Agreement. Also, on entering into the Second Amendment Agreement on 31st march, 2015 the earlier Agreement shall be subsumed with the Amended Agreement and all the prior Company Appeal (AT) (Insolvency) No.1448 of 2019 defaults shall become irrelevant and the date of default shall be decided as per the Second Amendment Agreement dated 31st March, 2015. Therefore, the Adjudication Authority have wrongly considered the date of default to be 16th March, 2015 for computation of limitation period to file an application before it.
In case there is any discrepancy found in the application relating to the date of default being wrongly pleaded by the financial creditors as contended by the Corporate Debtor. The Adjudicating Authority may ask the financial Creditors to rectify the same. The limitation is a mixed question of law and facts therefore, unless it becomes apparent from the reading of the company petition that the same is barred by limitation the petition should not be rejected by selectively considering the documents on record. The application filed by the Corporate Debtor under Section 7 was required to be admitted by the Adjudicating Authority, but the Adjudicating Authority failed to consider the matter in proper perspective.
Appeal allowed.
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2020 (9) TMI 1172 - NATIONAL COMPANY LAW TRIBUNAL, BENGALURU BENCH
Seeking substantive consolidation of the Corporate Debtors into a single proceedings - acceptance, confirmation and all other actions with respect to the resolution plan for the Corporate Debtors - whether the Applicant, being the Operational Creditor, initiating CIRP respect of Respondent No. 1, has any locus standi to maintain the instant Application? - HELD THAT:- Since COC of R1 Company has unanimously decided to liquidate it by appointing Ms. R. Bhuvaneswari as Liquidator in the place of Mr. Srivastava, we hereby permit and direct an appropriate Application can be filed by RP of 1st Respondent by seeking to liquidate the Corporate Debtor and for appointment of Liquidator.
The instant Application is filed on misconception of facts and law, and the Applicant too has no locus to interfere in the CIRP of Respondent No.1 by filing the instant Application and it also lacks merits - Application rejected.
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2020 (9) TMI 1167 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Maintainability of application - application filed by Respondent No. 3 in collusion with Respondent No. 1 and 2 to frustrate the awards including the latest award dated 12th July, 2020 passed in favour of the Appellant - HELD THAT:- Issue notice upon Respondents. Mr. Rishav Banerjee, Advocate waived and accepted notice on behalf of Respondent No. 1. Mr. Aishwarya Kr. Awasthi, Advocate waived and accepted notice on behalf of Respondent No. 3. No further notice needs to be issued on these Respondents. Respondents may file their reply affidavit within two weeks. Rejoinder, if any, may be filed within two weeks thereof.
Notice be served upon Respondent No. 2 only. Appellant to provide mobile Nos./e-mail address of the Respondent No. 2. Notice be issued through e-mail or any other available mode. Requisites along with process fee be filed within three days - List the appeal ‘for admission (after notice)’ on 4th November, 2020.
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2020 (9) TMI 1161 - SC ORDER
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - Operational Debt - it was held by NCLAT that there is no illegality or infirmity in the Order passed by the Adjudicating Authority - HELD THAT:- There are no reason to interfere with the impugned order dated 10.08.2020 passed by the National Company Law Appellate Tribunal, New Delhi.
Appeal dismissed.
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2020 (9) TMI 1154 - NATIONAL COMPANY LAW TRIBUNAL, BENGALURU
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- The Respondent has addressed a letter dated 13.03.2018 to the Petitioner by inter-alia stating that due to some un-avoidable circumstances, payments are delayed from their clients and funds flow was also not good since financial year ending, promised to clear the dues within 30 days period. When the Respondent failed to honour their promise, the Petitioner has issued demand Notice dated 04.10.2019 under the provisions of Code, and thereafter the Respondent raised dispute vide their Reply dated 13.12.2019. The contentions raised in the Reply is totally contrary to their earlier letter dated 13.03.18, and these contentions/ allegations are not all tenable and they cannot constitute valid and legal dispute. Since the Respondent did not appear before the Adjudicating Authority, the amount involved in the case is mere ₹ 4.35 lakhs, and initiation of CIRP is not a solution for the Petitioner, which is small entrepreneur and operational Creditor. Operational. And chances of getting dues of Operational Creditors are very less in comparisons to secured Creditors.
Instead of keep the case pending for service of notice on the Respondent and getting their reply, interest of both the parties would be met, if the Petition is disposed of by directing the Respondent to settle the issue in question within a stipulated period - Petition disposed off.
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2020 (9) TMI 1146 - NATIONAL COMPANY LAW TRIBUNAL, ALLAHABAD
Implementation of approved ResoIution Plan on or before the extended date - HELD THAT:- The prayer for reversal of the money to the Successful Resolution Applicant in the event of the dismissal order from the Hon'ble Apex Court cannot be granted at this stage only on speculations, Accordingly, the said prayer is rejected at this stage.
It is expected that the Successful Resolution Applicant will implement the approved resolution plan on or before the extended date i.e. 30.09.2020.
Application disposed off.
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2020 (9) TMI 1117 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , NEW DELHI
Direction to Appellant Bank to release of the margin money amount - Respondent submits that Performance Bank Guarantee is not included in the definition of ‘security interest’ for the benefit of the beneficiary of such Performance Bank Guarantee - HELD THAT:- Admittedly, ₹ 51,27,591/- was the margin money, while was deposited by the Corporate Debtor to secure Bank Guarantee in favour of M/s Tata Steel Processing & Distribution Limited for an amount of ₹ 4,01,94,954/-. The said Bank Guarantee was invoked during the moratorium period, i.e. on 27th December 2018. Given Section 14(3) of the I&B Code, 2016 invocation of the said guarantee could not be stopped by the Bank.
The ‘Security Interest’ does not include the ‘Performance Bank Guarantee’. The Performance Bank Guarantee is not covered by Section 14 of the Code - It is pertinent to mention that the ‘margin money’ is not a security as has been argued by the Respondent and does not require any registration of charge. Only the assets gave by the Company as securities are required to be registered under Section 77 of the Companies Act, 2013.
In this case, Bank Guarantee was invoked on 27th December 2018 by the beneficiary M/s Tata Steel Processing & Distribution Limited, and the margin money amount was used towards the payment of the Bank Guarantee. Once this margin money was used to honour the bank guarantee, nothing remained with the Bank, and as such, the Respondent Resolution Professional cannot demand that amount - The Resolution Professional/IRP is only entitled to those payments to which the Corporate Debtor is entitled if no orders of Moratorium would have been passed under Section 14 of the Code. The Corporate Debtor had no right to claim the margin money after the invocation of Bank Guarantee.
Appeal allowed in part.
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2020 (9) TMI 1116 - NATIONAL COMPANY LAW APPELLAT TRIBUNAL, NEW DELHI
Maintainability of application - initiation of CIRP - Corporate Debtor did not clear the dues - existence of dispute or dues - HELD THAT:- The Operational Creditor could not invoke confidence of the Adjudicating Authority for initiating such stringent action as one under Section 9 of Insolvency and Bankruptcy Code, 2016. The Learned Counsel for the Appellant states that the Adjudicating Authority wrongly referred the notice under Section 8 of I & B Code (copy of which is at Page 43 Annexure A/13) to be not in Format.
Clearly, the Addresses do not match and service of Notice under Section 8 on Corporate Debtor cannot be accepted. The Learned Counsel is relying only on the Postal Cash Receipts which are at Page 44 which relate to booking of the document with the Postal Authorities. The Respondent did not appear or did not contest. That would not be material looking to the fact that it is burden on the Operational Creditor to make out a case for admitting an Application under Section 9 when the address of the Section 8 notice does not match with the registered address mentioned in Application under Section 9, it cannot be said that the burden on the Operational Creditor has been discharged - Even if such stand was not taken, we cannot close our eyes to what is obvious from the record. Insolvency and Bankruptcy Code, 2016 Proceedings are serious mattes and we cannot simply admit Application under Section 9 if we are not satisfied with compliance of requirements of law.
We are also not convinced that the Application under Section 9 is required to be admitted - Appeal dismissed.
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2020 (9) TMI 1115 - NATIONAL COMPANY LAW TRIBUNAL KOLKATA BENCH
Early hearing of application - Auction - section 60(5) of Insolvency and Bankruptcy Code, 2016 read with Rule 11 of National Company Law Tribunal Rules, 2016 - HELD THAT:- The applicant has paid the entire sale consideration in respect of both the properties in the account of certificate holder banks on 17th September, 2019. The DRT proceedings against CD were initiated by a consortium of Banks who are the members of the CoC in the case in hand. So no doubt keeping the money in their hand after setting aside the sale is not proper and just.
An application of this nature wherein a claim is raised not against the CD or against the properties now held by the CD but is against certificate holder banks who are the members of CoC is not maintainable. It is an inter-se claim in between certificate holder banks who received the consideration and the auction purchaser - there are force in the said submission on the side of the applicant/auction purchaser, especially wherein the lead bank representing the CoC showed its readiness to refund the amount.
The certificate holder of the bank who are members of CoC are directed to keep the money paid by the applicant with accrued interest @ applicable to the Banks, till the date of refund to the applicant preferably with in two weeks from the date of receipt of this order by the bank. If such an order is not issued it would work much hardship, economical loss and injustice to the applicant who had purchased the property higher than the upset price notified by the Banks - application disposed off.
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2020 (9) TMI 1114 - NATIONAL COMPANY LAW TRIBUNAL , BENGALURU BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt ad dispute or not - HELD THAT:- The Corporate Debtor, has admitted its liability to repay the debt amount and is willing to pay the same. However, it sought for additional time for clearing the financial dues of the Petitioner - On perusal of the records, there is no doubt that there is an admitted debt and a default as per the agreed terms between the two parties. The Petitioner admits that the present loan was renewed as the Corporate Debtor had been repaying the earlier debts. Thus there is a running account between the two and the Corporate Debtor has given an undertaking that it has made arrangements for paying the debt and only requires some more time to settle the debt.
The Corporate Debtor's plea that it be given some more time to repay the debt needs to be accepted, and the Respondent/Corporate Debtor be directed to settle the debt at the earliest in consultation with the Petitioner/Financial Creditor - Petition disposed off.
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2020 (9) TMI 1113 - NATIONAL COMPANY LAW TRIBUNAL , BENGALURU BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- It is settled position of law that provisions of Code cannot be invoked for recovery of outstanding alleged amount(s) - 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 IBC, 2016 is not intended to be substitute to a recovery forum.
Since the Respondent has already drawn six cheques for total amount of ₹ 6,69,362/-(which is total principal amount claimed in the Petition), and undertakes to honor those cheques whenever presented for realization, we are inclined to dispose of the instant Company Petition with directions. The Petitioner cannot claim interest due to circumstances.
Application disposed off.
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2020 (9) TMI 1112 - NATIONAL COMPANY LAW TRIBUNAL , BENGALURU BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- The debt and default in question are not in dispute and on the other hand, the Corporate Debtor has also accepted the debt, and the Respondent is prima facie found to be insolvent. The instant application is filed strictly in accordance with the extant provisions of the Code, and debt and default established and also suggested a qualified Resolution Professional namely Shri Surender Devasani, with Registration No. IBBI/IPA-001/IP-P00775/2017-2018/11348, who also filed written Consent in Form-2 on 26.08.2019, by inter alia declaring that no disciplinary proceedings pending against him with the Board or the Indian Institute of Insolvency. Therefore, he is provisionally eligible to be appointed as IRP.
Application admitted - moratorium declared.
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2020 (9) TMI 1111 - NATIONAL COMPANY LAW TRIBUNAL , PRINCIPAL BENCH, NEW DELHI
Maintainability of Objections - applicant is representing 1500 home buyers of real estate projects, but whereas RP has categorically mentioned that only 448 home buyers voted against the plan - HELD THAT:- This objector has no locus to raise such objections without following the procedure, hence these objections have been rejected without going into the merits of the objections.
As to the request made by the Counsel, we express our helplessness to consider the plea of the counsel because whenever any proceedings is initiated or any reply is filed, it shall be filed in accordance with the Law. Moreover, Hon'ble Supreme Court of India has also categorically mentioned giving liberty to Wishtown Home Buyers Welfare Society that the said entity is at liberty to pursue the remedy in accordance with the law - The Counsel Mr. Lahot has stated that he would supply the list of the home buyers. However, list has not even been mentioned in these objections, the question of granting any permission to provide list after passing this order will not arise.
Objections rejected.
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2020 (9) TMI 1084 - NATIONAL COMPANY LAW TRIBUNAL, BENGALURU BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- The facts and circumstances of the case as detailed, has clearly established that the Petitioner is using the provisions of Code with main object to recover the alleged due rather than to seek to initiate CIRP on justified grounds. It is also relevant to point out here that role of Operational Creditor, who filed case U/s. 9 of the Code, will be nominal during the process of CIRP, and it is dominated by Financial Creditors. Therefore, the settled principle of law that provisions of Code cannot be invoked to recover alleged/disputed due, would be more applicable to the Operational Creditors rather than Financial Creditors, who filed cases U/s. 7 of Code. Therefore, it is to be held that the Petitioner has invoked the provisions of Code with an intention to recover alleged due rather than to justify its case to initiate CIRP in terms of object of the Code.
Principles of Double Jeopardy - HELD THAT:- It is also relevant to point out here that legal principle of double jeopardy would also applicant to the instant case, as the Petitioner has admittedly invoked provisions of N.I Act for dishonour of cheques issued by the Respondent, which is sub-judice. The Adjudicating Authority cannot enter into above disputed issues, in summary proceedings as contemplated under provisions of Code.
The instant Company Petition is filed with an intention to recover the alleged outstanding amount rather than to seek initiation of CIRP in respect of the Corporate Debtor, which is against the object of the Code. The Petitioner cannot be permitted to bargain for settlement of alleged dues, in a case filed under Section 9 of Code and it is for the Parties to settle those issues between them. Therefore, the instant Petition is not maintainable under the provisions of Code.
Petition dismissed as not maintainable.
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2020 (9) TMI 1083 - NATIONAL COMPANY LAW TRIBUNAL, BENGALURU BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Settlement of alleged dues - existence of debt and dispute or not - HELD THAT:- The instant Company Petition is filed with an intention to recover the alleged outstanding amount rather than to seek initiation of CIRP in respect of the Corporate Debtor, which is against the object of the Code. The Petitioner cannot be permitted to bargain for settlement of alleged dues, in a case filed under Section 9 of Code.
Petition not maintainable and is dismissed.
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