Home Case Index All Cases Insolvency and Bankruptcy Insolvency and Bankruptcy + AT Insolvency and Bankruptcy - 2020 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (10) TMI 495 - AT - 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:- It is observed that there is business relationship between the two parties and has gone into rough weather from March, 2018. It is not in dispute that both the operational creditor and the corporate debtor were maintaining Running Account - It is also observed that the operational creditor is making all attempts to realize the payment and conveniently used I & B Code, 2016 for faster realization. The Operational Creditor is claiming that the Debt due is more than ₹ 1 lac. If, it may also be due for payment as it will be becoming the job of IRP to reconcile and get the disputed amount segregated and the claim can be counted provided the application meets the criteria of Section 8 & 9 of the Code. The Object of the Code is not recovery of money but to bring out of insolvency and maximization of value of assets of the Corporate Debtor. It is also very much clear that if there is a dispute as per relevant provisions of the Code, it is incumbent on the Adjudicating Authority to reject the petition/application as per the provisions of the Section 9 of the Code. It is also very much clear in this case that there is a dispute of the Debt and dispute resolution mechanism is also provided in the purchase order. Since the I&B Code, 2016 debars the application of the Code for recovery of money as well as if there is a dispute then also petition/application requires to be rejected. The Hon’ble Supreme Court has already held in Mobilox Innovations Pvt. Ltd., Vs. Kirusa Software pvt. Ltd. [2017 (9) TMI 1270 - SUPREME COURT ], that IBC is not intended to be a substitute for recovery forum. It is also laid down that wherever there is existence of real dispute, the IBC provisions cannot be invoked - Since Hon’ble Apex Court has clearly laid down the mechanism to be operated by Operational Creditor in terms of Section 8 & 9 of the Code, it is very clear that the undisputed debt is sine qua non of initiating CIRP as also the debt should be due and payable. Since, the order of Adjudicating Authority in the present case, does not meet the above criteria and hence the appeal needs to be allowed - We are not passing any comment on the merit of the dispute between the parties and the parties are free to approach appropriate forum for recovery or dispute resolution. Appeal allowed.
|