TMI Blog2018 (7) TMI 2197X X X X Extracts X X X X X X X X Extracts X X X X ..... further defined as an Operational Debt where a Debt is in respect of the repayment of the dues arising under any Law for the time being in force and payable to the Central Government, any State Government or any Local Authority. Whether the impugned amount was in respect of the repayment of the dues is a subject matter before the Hon ble High Court, yet to be adjudicated upon. Thus, if there is an existence of dispute, a Petition does not deserve to be admitted. Keeping brevity in mind and since the law laid down in all these precedence is unambiguous, as also the facts of the case have demonstrated the existence of a dispute prior to filing of the Petition, hence leads to one conclusion that the Petition deserves dismissal. Petition dismissed. - No. CP (IB)-20(MB)/2018 - - - Dated:- 26-7-2018 - Hon ble Shri M.K. Shrawat, Member (Judicial) For the Petitioner : 1. Mr. Amir Arsiwala, a/w. 2. Ms. Surabhi Chatterjee. For the Respondent : 1. Mr. Mahesh Athavale, 2. Ms. Anagha Arasingaraju. ORDER Per M.K. Shrawat, Member (Judicial) 1. A Petition was filed on 28.12.2017 in Form No. 5 by M/S. Overseas Infrastructure Alliance India Pvt. Ltd., Mumbai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... USD 124.975 million and accordingly two separate tranche based contracts were signed between Mashkour and the Operational Creditor respectively on 14.04.2010 and 09.02.2014. Therefore, the Operational Creditor had paid the Corporate Debtor an Advance amount of INR 47,12,10,000/-, that is, the equivalent value of US $ 10.62 million, through Demand Draft dated 30.08.2011 on or about 30.08.2011 towards performance of its obligations under the said Contract. The said advance payment was stated to have made in Indian Rupees due to the alleged inability of the Corporate Debtor to provide suitable Advance Bank Guarantee (ABG), denominated in US Dollars, as required under the Agreement. 2.4. According to the Operational Creditor, the First Tranche Contract between Mashkour and the Operational Creditor was almost completed, however, in its execution, there was no involvement of the Corporate Debtor. 2.5. The Operational Creditor alleged that the Exim Bank did not release the payments under 2nd Tranche Agreement dated 09.02.2014 executed between Mashkour and the Operational Creditor, therefore, the Contract was terminated by Mashkour vide their letter dated 15.06.2017 citing all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of a dispute with respect to the same. However, the Petitioner Creditor argued that the said allegation is spurious, hypothetical and illusory. Further, the Petitioner Creditor vehemently denied that there is a suit pending where relief is sought against the Corporate Debtor. 3.1. The Operational Creditor stated that the subject matter of the said Suit (L) No. 382 of 2017 and Notice of Motion (L) No. 1314 of 2017 filed before the Hon ble Bombay High Court, referred to by the Corporate Debtor in the said Reply dated 06.12.2017, is completely different from the subject matter of the present Application. Further stated that the said Suit and the said Notice of Motion does not absolve the Corporate Debtor from making payments to the Operational Creditor towards the said Operational Debt. 3.2. The Hon ble High Court of Judicature at Bombay in Notice of Motion (L) No. 1314 of 2017 in Suit (L) No. 382 of 2017 has refused the ad-interim relief claimed by the Plaintiffs therein, i.e. the Overseas Infrastructure Alliance (India) Pvt. Ltd. And Anr., vide Order dated 27.06.2017 and directed that Replies to the Notice of Motion to be fifed within four weeks. Rejoinder if any, within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch is identical to the said Civil Suit made it clear that there was no lawful liability of payment against the Respondent Debtor. Further explaining the facts, the Respondent has stated that there is one complete contract of USD 150 million payment which is divided into two tranches - first of USD 25 million and second of USD 125 million. It is stated that it is completely incorrect and false to state that the Applicant has completed their part of the contract for USD 25 million as alleged. The Respondent stated that first advance was paid out of funds received from Exim Bank which were paid to the Applicant for onward payment to the Respondent on behalf of Mashkour Sugar Company. The Respondent further stated that out of this advance, the Respondent has purchased raw materials of USD 2 million approximately and has provided services which entitled it to receive the engineering charges of USD 4.25 million approximately for the said project. The allegation of the Respondent is that the combined value of the material and the goods in process with the Company was about USD 6.25 million and other related expenses, Bank charges, etc. were about USD 6.50 million. However, the Respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7,12,10,000 to KBEL on 30.08.2011. The Respondent has further emphasized that the said amount was paid out of the pocket by the Petitioner but it was paid out of the amount received from Exim Bank who had given Line Of Credit to Mashkour for onward remittance to the Respondent . As per the Respondent, the Petitioner was merely a custodian of the amount till Respondent was to complete the formalities of submission of guarantees. Vide a letter of 21.09.2011 it was informed by KBEL to Mashkour that ₹ 47,12,10,000/- was credited to its account. Thereafter, during the period of 2011 to 2014, KBEL had been working on the project as per the terms. In the year October, 2015, as per Respondent, red flag raised by Exim Bank against OIAIL. 6. Further, vide its letter dated 12.01.2017, the Ministry of External Affairs informed the Applicant about the status of various projects being implemented by the Applicant in various African countries. The letter further informed the Applicant that various borrowing Governments have expressed concern on the continuing delays and asymmetry between payments made and quantum of physical progress at the site. It is also informed that the Governmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tement forming part of the communication that the Government of Sudan has realized beyond reasonable doubt, through diplomatic channels, that the GOI line of credit for Mashkour Sugar Company will not be disbursed as long as O/A is an EPC contractor , it is important to note that whatever may be the reason for addressing such communication, by this communication, the contract between Mashkour Sugar Company and Plaintiff No. 1 has stood terminated and Plaintiff No. 1 is no longer to serve as an EX contractor under the said contract The facts leading to this situation have been treated by Mashkour Sugar Company Limited as force majeure conditions leading to frustration of the contract. In the face of termination of fie EPC contact Of Plaintiff No. 1, in respect of which no relief is claimed or claimable within the framework of the present suit no interim injunction can be granted restraining Defendant Nos. 1 and 2 in terms of prayer clause (d) of the Notice of Motion setout above. Any interim relief to be granted in a sit can be in aid of the final relief that nay be granted in the suit. If the original contract of Plaintiff No. 1, for which the line was to be made available by Def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of EPC contract. 7.2. The provisions of the Insolvency Code are absolutely clear that if there is an existence of a dispute among the rival parties in respect of the Debt in question, then such Petition is not fit for admission . In this case, because of the peculiar features that the Petitioner itself has moved a Litigation before the Hon ble High Court of Bombay, revolving around the identical set of facts and the similar amount of Debt in question, the admission of this Petition is not permissible as laid down in the provisions of the Insolvency Code. 7.3. As far as the question whether the impugned Debt falls within the definition of Operational Debt as prescribed under Section 5(21) of The Code, it is defined that a claim is to be in respect of the provision of goods or in respect of providing services including employment. Within this definition Debt is further defined as an Operational Debt where a Debt is in respect of the repayment of the dues arising under any Law for the time being in force and payable to the Central Government, any State Government or any Local Authority. Whether the impugned amount was in respect of the repayment of the dues is a subj ..... 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