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TMI Blog2020 (12) TMI 244X X X X Extracts X X X X X X X X Extracts X X X X ..... orate Debtor) on the ground that it has committed default for total amount of Rs. 17,91,483/- (Rupees Seventeen Lakhs Ninety One Thousand Four Hundred and Eighty Three only) which includes Principal amount of Rs. 10,30,104/- and interest @ 24% p.a. of Rs. 7,61,379/-. 2. Brief facts of the case, which are relevant to the issue in question, are as follows: (1) N. Jayaraj, Power of Attorney holder of S. Nagarajan, Sole Proprietor of M/s. Vijaya Paper Mart. ("Petitioner/Operational Creditor"). (2) M/s. Riteway Packaging Private Limited ("Respondent/ Corporate Debtor"), is a Private Limited Company, was incorporated on 17.04.2012, under the provisions of the Companies Act, 1956, bearing CIN: U21000KA2012PTC063 590. Its Authorized Share Capi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yments to the Operational Creditor, thus within meaning of Section 2(12) of the IBC, 2016. (5) Hence, the instant Petition is to initiate CIRP against the Corporate Debtor. 3. Heard Shri PS Suman, learned Counsel for the Petitioner, through Video Conference and none appeared for the Respondent. We have carefully perused the pleadings of the Party and extant provisions of the Code, the Rules made thereunder and the law on the issue. 4. Shri PS Suman, learned Counsel for the Petitioner, while pointing out various averments made in the instant Petition, has further urged the Adjudicating Authority that since debt and default in question are not in dispute, the case may be admitted by initiating CIRP as prayed for. He has relied also upon t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner, by stating that they would clear the dues before 5th January, 2018. They have also issued post-dated Cheque No.891574 dated 21.09.2018 for payment of Rs. 10,23,604/-. The Petitioner has filed Affidavit dated 17.02.2020, U/s. 9 of the IBC, 2016, by inter alia stating that the Operational Creditor is entitled to recover a sum of Rs. 17,91,483/-together with interest @ 24% p.a. from the due date of respective invoices. The Cheque issued was returned by the Bank due to insufficient funds, vide Memo dated 11.12.2018. However, the Petitioner has not initiated any action for the dishonour of Cheque under provisions of Negotiable Instrument Act till date except the instant Proceedings under the provisions of Code by issuing Statutory Dem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed outstanding amount. 9. It is to be stated that the provisions of Code can be invoked to initiate CIRP on justified reasons, and it cannot be invoked with an attempt to recover outstanding amount. The Petitioner has not averred and substantiated that the Corporate Debtor has become insolvent. It is a settled position of law that the provisions of Code cannot be invoked for recovery of outstanding amount. The Hon'ble Supreme Court in the case of Mobilox Innovations Private Limited Vs. Kirusa Software Private Limited, (2018) 1SCC 353 has inter alia, held that IBC, 2016, is not intended to be substitute to a recovery forum. Therefore, mere debt and default cannot be sole basis to initiate CIRP and the Corporate Debtor proved to be insol ..... X X X X Extracts X X X X X X X X Extracts X X X X
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