9911796707
TMI Blog2020 (9) TMI 1083X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, Shakaranagar Main Road, Sahakaranagar Bengaluru 560092. Its Nominal Share Capital is Rs. 1,00,00,000/- and that of Paid-up Share Capital is Rs. 1,00,00,000/-. It is engaged in the business of health club and fitness industry. (3) Both the Parties have entered into three Master Equipment Rental Agreements from the year 2015 to 2016 for renting out various equipment to the Respondent Company based on the requirements of the Respondent. The Equipment's were duly rented out by the Appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 (including principal and interest Balance Amount Payable 20,00,000 (including principal and interest) The Petitioner has already initiated to recover such balance amount through the cases filed under Section 138 of the Negotiable Instruments Act, 1881 and the issue is sub- judice. The aforesaid payments are done with respect to the claim of the Applicant, which is the subject matter of the Application. The following are the details of the cheques by virtue of which the Applicant is making the recovery from the Corporate Debtor through the aforesaid legal forum: Particulars Amount paid (In Rs. ) Status of the Case Ann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icant to the Respondent. The Applicant is only trying to make an unjust enrichment by claiming more amount and there is no proper rationale behind imposing such interest rate. The Corporate Debtor is adversely affected by the inflated interest rate charged by the Operational Creditor. It is alleged that the Applicant is trying to put up pressure on the Corporate Debtor by invoking the provisions of Code. The Corporate Debtor is a going concern and not an Insolvent Company. The provisions of the Code cannot be invoked as a recovery forum. The Respondent is a Solvent Company with about 50 employees and is continuously carrying out its business activities. (5) Therefore, the instant Petition is not maintainable and liable to be dismissed. 4. Heard Shri Kanni Selvakarsan, learned Counsel for the Petitioner, and Shri Hari Babu Thota, learned PCS for the Respondent, through Video Conference. We have carefully perused the pleadings of both the Parties, and the extant provisions of the Code, the Rules made there under, and the law on the issue. 5. Shri Kanni Selvakarsan, learned Counsel for the Petitioner, while reiterating various contentions, as briefly stated supra, has further subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te CIRP proceedings from the existing Rs. One lakhs to Rs. one Crores. Similarly, provisions of Sections 7, 9 and 10 of Code, are suspended temporarily. The Central Government has vide Notification No. S.O. 1205(E) [F.N0.30/9/2020-INSOLVENCY], dated 24.3.2020, specified one crore rupees as the minimum amount of default. It is relevant to note that Section 4 refers to Part II of the the Insolvency and Bankruptcy Code, 2016which covers from Section 4 to Section 77. Therefore, Part II is not applicable in the instant case as the amount of default is less than one crore rupees. Moreover, Section 9(5) is under Part II which is not applicable as on this date, implying that the provision on admitting the application does not apply today. Further, Section 9(6) of the Code specifically provides that corporate insolvency resolution process shall commence from the date of admission of the application under sub-section (5) of Section 9. Though every amendment of Rule/Act, would normally will have prospective effect, nevertheless, the Adjudicating Authority is under legal responsibility to keep the above developments in mind, while deciding question of admission of a case. Since the issue invol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation Act, 1996, for the time being in force. Since cause of action and the dispute arise out of said Agreements, the Petitioner has not even made attempt to resolve their dispute either through mediation or Arbitration. Instead, it has resorted to initiating Criminal case for dishonouring the post-dated Cheques. By pursuing the criminal case for recovery of alleged due and receiving part payment, the Petitioner has, yet again resorted to invoking the provisions of Code in order to settle and recover the alleged dues. The facts and circumstances of the case 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 tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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