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TMI Blog2020 (9) TMI 842X X X X Extracts X X X X X X X X Extracts X X X X ..... irm, having its Registered Office situated at No. 83/2, Sri Durga Aura, 1st Floor, 33rd 'A' Cross Road, 9th Main Road, 4th Block, Jayanagar, Bangalore -560 011. (2) M/s. GRC Infra Private Limited (Respondent/Corporate Debtor) was incorporated under the Companies Act, 1956 on 09.12.2009, bearing CIN No. U45201KA2009PTC051798 and having its Registered Office situated at No. 161/A, 7th Cross, Teachers Colony, K.S. Layout, Bangalore - 560078. The Nominal Share Capital of the Company is Rs. 3,00,00,000/- and its paid up Share Capital is Rs. 3,00,00,000/-. (3) It is stated that Mr. R.M. Eshwar Naidu and Mr. G. Ramana Babu were the Directors and shareholder of the Corporate Debtor and the same Directors had also incorporated a registered partnership firm under the name and style of M/s. G.R. Constructions. The business of both the entities was conducted and looked after by the family members of G. Ramana Babu and R.M. Eshwar Naidu being related to each other. (4) It is stated that the R.M. Eshwar Naidu and G. Ramana Babu entered into a Settlement Deed Dated 05.04.2018. It was agreed that R.M. Eshwar Naidu would resign as a Director of M/s. GRC Infra Pvt. Ltd. and Mr. G. Rama ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on respective dates were returned with shara "payment stopped by drawer". Even on representation on instruction, some of the said cheques were returned for the same reason of "stop payment" even though the said cheque were specifically issued for discharge of liability as per the MOU, Settlement Deed and subsequent resolution of the Corporate Debtor. 3. Heard Ms. Ramya Bai, learned Counsel for the Petitioner, through Video Conference. We have carefully perused the pleadings of both Party, and the extant provisions of the Code, the Rules made thereunder, and the law on the issue. 4. Ms. Ramya Bai, learned Counsel for the Petitioner, while reiterating the averments made in the Company Petition, as briefly stated supra, has further submitted that the Petitioner has issued Statutory Demand Notice dated 16.10.2019 under the provisions of the Code by inter-alia demanding to pay the outstanding amount of Rs. 8 Crores in terms of the Agreement made between the Parties. However, the Respondent failed to pay the outstanding amount. The MOU dated 31.03.2018 and the Settlement Deed dated 05.04.2018 are not in dispute, and those were duly endorsed by the Board of Directors of Corporate Debt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re relevant to refer here, which are extracted below: Clause 19: "As per the cumulative effect of clause 4 to clause -18, the final amount payable by First party to the Second Party comes to Rs. 13,70,96,351/-. In view of take-over of Jaguar car by G. Ramana Babu and retention of Benz car by R. M. Eshwar Naidu, the difference in the written down value of the said two cars, coming to Rs. 17,75,000/- is further added, resulting into an total amount payable by G. Ramana Babu to R.M. Eshwar Naidu of Rs. 13,88,71,351/-. Details of the calculations are as per Annexure - 3C appended hereto." Clause 20: "The above said sum of Rs. 13,88,71,351/- (Rupees Thirteen Crore Eighty Eight Lakhs Seventy One Thousand three Hundred and Fifty One only) shall be settled by the First Party by executing Agreement to Sell and a GPA in respect of completed flats held in GRC Infra Private Limited which should enable the Second Party to sell and realise the sum of Rs. 13,88,71,351/-." Clause 21 "In the event of any party defaulting in executing any documents essential to give effect to the transfer of any of the properties enabling the settlement as enumerated herein above, the party so defaulting sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lting party is liable to pay compensation apart from the agreed amount are issues fall under the affairs of Corporate Debtor, which are normally to be dealt under extant Articles of Association and Memo of the Company, however, subject relevant provisions of Companies Act, 2013. And these issues, in any case, would not fall under the Provisions of Code to adjudicate the rights and liabilities of the Parties. As stated supra, there were several legal notices exchanged between the Parties with reference to the issues in question and also threatened to initiate proceedings under Section 138 of the Negotiable Instrument Act. Therefore, issues raised in the instant case do not fall under definitions of debt and default under the provisions of the Code and these issues are purely civil in nature. 9. In pursuant to the Statutory Demand Notice dated 16.10.2019 issued by the Petitioner to the Respondent, M/s. GRC Infra Private Limited (Respondent) has issued a comprehensive Reply dated 31.10.2019 by inter-alia contending that the Company is not a party to the Agreement in question; that the Company has not received any goods or services to invoke the provisions of the Code, etc. Another Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while examining an application filed under Section 9 of the Code, will have to determine: a) Whether there is an 'operational debt as defined exceeding Rs. 1 Lakh? b) Whether documentary evidence furnished with the application shows that the aforesaid debt is due and payable and has not yet been paid? c) Whether there is existence of dispute between the parties or the record of the pendency of a suit or arbitration proceeding filed before receipt of demand notice of the unpaid operational debt in relation to such dispute? If any one of aforesaid conditions is lacking, the application would have to be rejected. 12. In the light of above facts and circumstances of the case and the Law on the issue, it is to be held that the issue do not fall under the provisions of Code. Moreover, there is substantial dispute raised by the Respondent by various legal notices and correspondence exchanged between the Parties as enclosed to the Company Petition. It is also relevant to point out here, as stated supra, there is an arbitration clause available both in MOU and Settlement Deed, to invoke arbitration clause, in case, any dispute arise between the Parties out of implementation of ter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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