TMI Blog2020 (9) TMI 1084X X X X Extracts X X X X X X X X Extracts X X X X ..... es 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. - C. P. (IB) No. 399/BB/2019 - - - Dated:- 6-7-2020 - Rajeswara Rao Vittanala , Member ( J ) and Ashutosh Chandra , Member ( T ) For the Appellant : Kanni Selvakarasan For the Respondent : Hari Babu Thota ORDER Rajeswara Rao Vit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .07.2019, a sum of ₹ 25,00,000/- was paid by the Respondent to the Applicant towards interest alone, further acknowledging its liability to the Applicant. Hence, the Respondent is liable to be the Applicant a sum of ₹ 1,01,10,374.49/- towards interest at 21.27% alone as of August 2019. (4) It is stated that the Respondent vide letter dated 11.01.2019 acknowledged the debt of ₹ 2,16,11,111/- due towards the Applicant and undertook to clear its liability by May 2020 and issued post-dated cheques, which became payable in the months of January 2019 to August 2019. However, cheque been dishonoured by the Respondent leading to initiate appropriate legal proceedings against the Respondents, before the Hon'ble Chief Metropolitan Magistrate at Bengaluru, which are pending adjudication. (5) It is stated that the Applicant then sent a Demand Notice (Form 3) dated 13.05.2019 to the Respondent calling upon the Respondent to repay the outstanding amount due within 10 days from the date of receipt of the said notice, but there has been no reply from the Respondent, despite receipt of the notice. The Respondent till date has not cleared the aforesaid amount due to the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5,00,000 dated 30.06.2019 Cheque bearing No. 689410 5,00,000 dated 31.05.2019 Cheque bearing No. 689409 5,00,000 dated 31.05.2019 Total Repayment Made 1,18,99,893 (including principal and interest) Balance Amount Payable 97,11,218 (including principal and interest) The Applicant has already initiated to recover such balance amount through the cases filed under Section 138 of the Negotiable Instruments Act, 1881 and the same is sub-judice. (3) It is stated that 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. ) Stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Withdrawn Copies of 707796 dated 29.06.2019 vide memo order and Axis Bank Cheque No. dated withdrawal 689345 dated 03.07.2019 Axis Bank Cheque No. 707786 dated 03.07.2019 Axis Bank Cheque No. 689337 dated 03.07.2019 29.01.2020 memos enclosed Axis Bank Cheque No. 15,00,000 Withdrawn Copies of 689406 dated 30.04.2019 vide memo order and Axis Bank Cheque No. dated withdrawal 689407 dated 30.04.2019 Axis Bank Cheque No. 689408 dated 30.04.2019 29.01.2020 memos enclosed (4) It is submitted that the Respondent made payments on behalf of two entities i.e. the Respondent Company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, in such a situation, such delay in payment would not constitute a ground empowering the court to initiate the insolvency proceedings. The Applicant cannot be oblivious of the fact that the Corporate Debtor is an ongoing concern having regular business and employment of employees, initiation of Insolvency Proceedings would adversely affect the functioning of the Corporate Debtor. Insolvency Proceedings under the Insolvency and Bankruptcy Code, 2016 and the rules there under cannot be adopted as recourse to recovery of debt. (6) Therefore, the Adjudicating Authority is urged to dismiss the Petition. 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 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 submitted that the Debt and Default in question are admittedly not in dispute, as part- payment of total invoice was also paid. The Res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 involved in the instant is the question of admission and not dealing with admitted case, we have to keep in mind the above situation an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 10. It is settled position of law that the 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 Vs. Kirusa Software Private Limited, (2018) 1 SCC 353 has inter alia, held that IBC, 2016 is not intended to be substitute to a recovery forum. In another latest judgment 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) Whethe ..... 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