TMI Blog2020 (9) TMI 1083X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority) Rules, 2016, by inter alia seeking to initiate Corporate Insolvency Resolution Process (CIRP) in respect of M/s. Body sculpt Health club Pvt. Ltd., on the ground, that it has committed default for total amount of ₹ 63,15,924.24/- (Rupees Sixty Three Lakhs Fifteen Thousand Nine Hundred and Twenty Four and Twenty Four Paisa Only) along with interest at 21% p.a. till August 2019. 2. Brief facts of the case, as mentioned in the Company Petition, which are relevant to the issue in question, are as follows: (1) M/s. Prime Assetsource Pvt. Ltd., (herein after referred to as Petitioner/Operational Creditor) bearing the CIN: U72200KA 2009PTC050135 and having its Registered Office situated at Level 1 to 4, 58/1, 13th Cross, Margosa Road, Malleshwaram, Bengaluru 560003. It is engaged in the business of renting out computer hardware, peripherals, furniture, Air Conditioners and other equipment's and products. (2) M/s. Bodysculpt Healthclub Pvt. Ltd., (herein after referred to as Respondent/Corporate Debtor) was incorporated on 9.11.2011 having CIN: U74999KA2011PTC061108 and having its registered Office situated at No. 40/1 Century Corbel Commercial 2nd Floor, Shaka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y inter alia contending as follows: (1) The Respondent had been put to multiple hardships by the claims made by the Applicant/Petitioner herein. The amount that was agreed to be paid was about ₹ 65 Lakhs (including Principal and interest) and part amount was already paid by the Respondent to the Applicant/Petitioner. And the aforesaid amount was agreed by both the Parties in January, 2019. The Application was filed in the month of May 2019 and during the said gestation period, multiple cheques were issued by the Respondent in favour of the Applicant to make the payment. Further the Respondent had already issued cheques for the remaining balance amount. The following is the table establishing the fact of repayment and the balance payment to be made: Particulars Amount Paid (In Rs. ) CC 21775/19 5,00,000 CC 22388/19 5,00,000 PCR 15573/19 20,70,845 CC 18199/2019 14,83,769 Total Repayment Made 45,54,614 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00,000 15th March, 2020 2 ₹ 5,00,000 30th March, 2020 3 ₹ 5,00,000 15th April, 2020 4 ₹ 5,00,000 30th April, 2020 (3) It is submitted that the Respondent made payments on behalf of two entities i.e. the Respondent Company and M/s. Aria Brew and Dine Private Limited(subject matter of another C.P. No. 399/BB/2019) owing to the fact the both the entities are controlled by same individual and have a common management. Upon observing the entity Digital waves International Private Limited, which had filed an Application against M/s. Aria Brew and Dine Private Limited is also in common management with the Applicant in the said case, the Applicant had issued cheques only in the favour of Digital waves International Private Limited corresponding to the outstanding amount in the present subject matter. (4) It is alleged that the Applicant is charging exorbitant interest of about 21% which is not all specified in any of the terms and conditions appended to the services pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd this Adjudicating Authority cannot be used as recovery forum. He has also filed Addl. submissions dated 26.06.2020, by inter alia saying that the Respondent made payments on behalf of two entities viz., M/s. Bodysculpt Healthclub Pvt Ltd( the respondent herein M/s. Aria Brew and Dine Private Limited (C.P.(IB) No. 399/BB/2019) owing to the fact that both the entitled are controlled by same individuals and have common management. And the Respondent also made payment to the associate Company of the Petitioner/Applicant owing to the fact that the management of Petitioners/Applicant Companies are also same. The present economic adverse situation prevailing in the Country due to outbreak of Novel Corona Virus may be also be taken into consideration as it has devastating financial effect on the Companies. Therefore, he has urged the Adjudicating Authority to dismiss the Petition in the interest of justice. 7. The Govt. of India by taking into consideration of present economic scenario due to epidemic has taken several mitigating steps to save the Companies from going into CIRP and then Liquidation. Accordingly, the Govt. of India, so far as provisions of Code is concerned, has inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im is for the rental dues. The Petitioner also claimed 21% of interest per annum, without having any referred to either in the Agreements and Invoices in question. Even though notice was issued on 03.06.2019 demanding for the outstanding amount, which is due from June 2015 and the instant Company Petition was filed only on 23.09.2019 despite granting ten (10) days' time either to respond or to raise dispute. Therefore, the Petitioner has not explained the reasons for not initiating the CIRP, after ten (10) days of issuing of the Demand Notice, apart from the delay and laches for the claim made by the Petitioner in the instant Company Petition. 9. The Master Equipment Rental Agreements in question contains several terms and conditions, which includes refundable security deposits, Arbitration Clause under Clause 17.13, wherein, it is mentioned that any dispute or difference arising out of or in connection with this Agreement between the Parties, including any question regarding its existence, validity or termination (Dispute), the parties can settle the dispute by referring the matter to Arbitration in Bangalore, in accordance with the Arbitration Rules as laid down in the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t rendered in Transmission Corporation of A.P. Ltd. Vs. Equipment Conductors and Cables Ltd., (CA No. 9597 of 2018) dated 23rd October, 2018, (2018) 147 CLA 112 (SC) Supreme Court of India, it is inter alia held that existence of undisputed debt is sine qua non of initiating CIRP. As per para 34 of judgment, it is stated that Adjudicating Authority, 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 ₹ 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? d) If any one of aforesaid conditions is lacking, the application would have to be rejected. 11. For the aforesaid reasons and circumstances of the case, we are of the considered opinion that the instant Company Petition is filed with an intention to recover the alleged outstanding amount ra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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