TMI Blog2021 (3) TMI 996X X X X Extracts X X X X X X X X Extracts X X X X ..... ates were cancelled by the Corporate Debtor and issued another 4 cheques bearing Nos. 10055508, 10055509, 10055510 in favour of M/s. Thankam Cashew Factory and cheque bearing No. 10055511 in favour of the Applicant herein for an amount of ₹ 1,16,96,603/-. Whether the debt falls within the purview of Operational Debt under Section 5 (21) of the I B Code,2016? - HELD THAT:- Any amount claimed as due by a person representing as Operational Creditor should demonstrate firstly that the said amount in default falls within the definition of claim as defined in Section 3(6). Such a claim, secondly should be capable of being treated as a debt as defined under Section 3(11) of I B Code, 2016 and finally the debt should fall within the confines of Section 5(21) of I B Code, 2016 (i.e.) it should be capable of being treated as an Operational Debt and such an operational debt must be owed by the Corporate Debtor to a creditor who can then be considered as an Operational Creditor as defined under Section 5(20) of IBC, 2016 - The claim of the Operational Creditor is not based on an operational debt, because no goods/services were to be rendered by the Corporate Debtor. The Op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, on presentation, the cheque was returned due to insufficient funds. 4. As no payments were received from the Corporate Debtor towards the dues, applicant issued a Demand Notice dated 30.09.2020 under Section 8 of the Insolvency and Bankruptcy Code, 2016 (under Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016). The Corporate Debtor has neither denied the debt nor shown the existence of any dispute prior to the receipt of Statutory Notice in Form -3, of the I B Code,2016. It is, therefore, clear that the Corporate Debtor is unable to discharge its lawful debts/liabilities. Submissions of the Corporate Debtor 5. The Corporate Debtor filed their counter and submitted that the applicant does not have any contractual obligation with the Corporate Debtor. The High Sea Trade Contract dated 31.05.2017 reveals that the Contract is between the Corporate Debtor and M/s. Thankam Cashew Factory. Therefore, a stranger to a contract cannot sue before a court of law as decided in the case of Dunlop Pneumatic Tyre Co. Ltd V. Selfridge Co. Ltd [1915 AC847]. In this connection they have cited the decision of Mobilox Innovations Private L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Hence the first condition of having an operational debt exceeding 1 crore is established. (ii) Whether the documentary evidence furnished with the application shows that the aforesaid debt is due and payable and has not yet been paid? The operational creditor, after the debt became due, has issued a letter on 22.2.2019 to the Corporate Debtor demanding the payment of debt for which no reply has been received from the Corporate Debtor. Certificate issued by Chartered Accountant filed along with the Application indicates that no funds have been received from the Corporate Debtor since 19.10.2007 till 17.9.2020. Hence, it is proved that the aforesaid debt is due and payable and has not yet been paid. (iii) Whether there is existence of a dispute between the parties or the record of the pendency of a suit or arbitration proceeding on the dispute filed before the receipt of the Demand Notice? Section 5(6) of IBC which defines the term 'dispute' is reproduced herein below- dispute includes a suit or arbitration proceedings relating to (a) the existence of the amount of debt; (b) the quality of goods and service (c) the breach of a representation or warran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 10055508 and 10055509, the Corporate Debtor has requested the Operational Creditor and M/s.Thankam Cashew Factory not to present the other cheques because the continuous dishonour of cheques would affect the financial credibility of the Corporate Debtor before the bank. Hence, the cheque nos. 10055510 and 10055511 were not presented before the bank. Certificate issued by the Branch Manager, Kottarakkara dated 11.11.2020 contains a false statement. They are liable to be prosecuted for issuing such a false certificate to be produced before this Tribunal. FINDINGS 11. This tribunal has gone through the pleadings on record and perused the submissions made by learned counsel for both sides. On a careful perusal of the documents, it is noticed that the High Sea Sale Contract dated 31.05.2017 is entered between the Corporate Debtor and M/s. Thankam Cashew Factory on 31.05.2017 but not with the Operational Creditor. Since Thankam Cashew Factory was not having the required funds, in order to pay an advance amount for the purchase of goods the Operational Creditor paid an amount of ₹ 1,15,00,000.00 [One Crore Fifteen Lakhs] to the Corporate Debtor. there is no privity of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 508 dated 09.05.2018 for ₹ 1,00,00,0 in favour of Thankam Cashew Factory, cheque bearing No.10055509 dated 14.05.20118 Rs,1,00,00,000/- in favour of Thankam Cashew Factory, bearing No.10055510 dated 21.05.2018 ₹ 93,26,058/ in favour of Thankam Cashew Factory and cheque bearing No. 10055511 dated 18.05.2018 for ₹ 1,16,96,603/- in favour of Kripa Cashew Exports. The earlier letter issued dated 19.10.2017 and two cheque bearing Nos. 10055498 and 10055499 treated as cancelled. Kindly acknowledge the good receipt. Thanking You Yours faithfully Received Cheques as full and final settlement Sd/-S/o Samuel Jose, Jackson/7.5.2018 For Royals International Trade and Allied Products Pvt Ltd Sd/- Managing Director. 14. It is evident from the above that the cheques issued on the earlier dates were cancelled by the Corporate Debtor and issued another 4 cheques bearing Nos. 10055508, 10055509, 10055510 in favour of M/s. Thankam Cashew Factory and cheque bearing No. 10055511 in favour of the Applicant herein for an amount of ₹ 1,16,96,603/-. 15. Learned Counsel for the Corporate Debtor raised the maintainability of the applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fall within the confines of Section 5(21) of I B Code, 2016 (i.e.) it should be capable of being treated as an Operational Debt and such an operational debt must be owed by the Corporate Debtor to a creditor who can then be considered as an Operational Creditor as defined under Section 5(20) of IBC, 2016. 19. The claim of the Operational Creditor is not based on an operational debt, because no goods/services were to be rendered by the Corporate Debtor. The Operational Creditor is not relating to the goods/services including employment or the debt in respect of the repayment of the dues, but it is related to non-payment of the advance money paid to the Corporate Debtor on behalf of M/s. Thankam Cashew Factory. Therefore, the same is not covered under the definition of the Operational Debt as provided under Section 5(21) of the Code. 20. In the case of Mobilox Innovations Pvt. Ltd. Versus Kirusa Software Private Limited; 2018 1 SCC 353, it is clearly stated that the Tribunal when examining an application under Section 9 of I B Code,2016, will have to determine: (i) Whether there is an operational debt as defined exceeding ₹ 1 lakh? (See Section 4 of the Act) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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