TMI Blog2021 (12) TMI 359X X X X Extracts X X X X X X X X Extracts X X X X ..... as satisfied this Adjudicating Authority on all the issues raised in opposition by the corporate debtor. The failure of the corporate debtor to comply with the terms settled between the parties is a proved default on its part and its failure to pay the instalments, the right to sue rightly accrued in favour of the operational creditor. The agreed debt forming part of the settlement agreement dated October 11, 2018 is an admitted operational debt which had to be paid off within the stipulated time but since the corporate debtor has failed to perform its obligation under the aforesaid agreement, it is certainly a default which calls for an immediate action by this Adjudicating Authority. The application filed by the operational creditor under section 9 of the Insolvency and Bankruptcy Code, 2016 for initiating corporate insolvency resolution process against the corporate debtor, BST Infratech Ltd., is hereby admitted - application admitted - moratorium declared. - C. P. (IB) No. 911/KB/2020 - - - Dated:- 3-11-2021 - V. K. Rajasekhar Judicial Member And Harish Chander Suri Technical Member For the Operational Creditor : Abhrajit Mitra , Senior Advocate, and Ms. Manju Bhu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al creditor to the corporate debtor in respect of the supply made by the corporate debtor to the operational creditor, a sum of ₹ 25,31,61,711 became due and payable by the corporate debtor to the operational creditor as on March 6, 2017. 5. It is submitted that as the corporate debtor failed and neglected to make the said balance outstanding dues, the operational creditor issued a notice dated May 25, 2017 under section 8 of the IBC, 2016 in respect of the outstanding dues as on March 6, 2017. Thereafter, the operational creditor filed an application being C. P. (IB) No. 431/KB/2017. The corporate debtor also filed its reply and the operational creditor filed its rejoinder in the said proceedings. It is further submitted that after the issuance of the demand notice dated May 25, 2017 further transactions took place between the operational creditor and the corporate debtor and the last transaction took place on October 5, 2017. In the reply filed by the corporate debtor in C. P. No. 431/KB/2017, the corporate debtor had admitted its liability. It is submitted that the corporate debtor made part payments to the operational creditor after issuance of the notice under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued a demand notice dated September 3, 2019 calling upon the corporate debtor to make payment in terms of the settlement agreement dated October 11, 2018 failing which, the operational creditor would take appropriate steps in accordance with law. The said notice was posted on September 4, 2019 and it is evident from the track report of the said notice that on September 5, 2019 the remark is out for delivery . On September 5, 2019 remark is item on hold door locked . On September 6, 2019 again remark is item on hold door locked and the delivery is being shown on September 12, 2019 along with the postal receipts and the track report is annexed as annexure I-H. It is submitted that the corporate debtor replied to the said notice vide rely dated September 21, 2019 wherein it is alleged that the corporate debtor has already filed a suit. The contents of the said reply dated September 21, 2019 are stated to be denied and disputed. It is submitted that in view of the admission of liability and terms of settlement agreement dated October 11, 2018 the said suit cannot be treated as pre-existence of dispute. In fact the corporate debtor with fraudulent and malicious intent has filed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tober 11, 2018 the corporate debtor had written a letter to the operational creditor on October 26, 2018 asserting that the settlement agreement entered into on October 11, 2018 is erroneous as a whole at core and invalid and ineffective. It is submitted by the corporate debtor that in the letter dated October 26, 2018 the corporate debtor asserted that contrary to the claim made by the operational creditor, a sum of ₹ 15,47,40,891 is due and payable by the corporate debtor, the correct position is that the operational creditor owed a sum of ₹ 8,08,518 to the corporate debtor payment whereof was demanded by the corporate debtor. It is submitted in the reply affidavit that the operational creditor had issued a purported demand notice dated September 3, 2019 which was served on the corporate debtor only on September 21, 2019 wherein the operational creditor had called upon the corporate debtor to pay a sum of ₹ 15,37,40,891 along with interest within 15 days from receipt of the purported notice (R1). 14. It is submitted that the corporate debtor vide its reply dated September 21, 2019 in response to the said purported demand notice dated September 3, 2019 had cal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... initiate fresh proceedings under the Insolvency and Bankruptcy Code, 2016 along with other remedies available under law for the entire outstanding together with interest at 24 per cent. per after giving adjustment to the payment received. 17. Learned senior counsel for the corporate debtor has placed reliance on Halsbury's Laws of England, Volume 37, 4th edition at page 287 which provides as follows : 391. Effect of settlement or compromise.-Where the settlement or compromise in pending proceedings, whether before, at or during the trial, the settlement or compromise constitutes a new and independent agreement between them made for good consideration. Its effects are (1) to put an end to the proceedings, for they are thereby spent and exhausted ; (2) to preclude the parties from taking any further steps in the action, except where they have provided for liberty to apply to enforce the agreed terms ; and (3) to supersede the original cause of action altogether. A judgment or order made by consent is binding unless and until it has been set aside in proceedings instituted for that purpose and it acts, moreover, as an estoppels by record. 18. Learned senior counsel re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terion which arises on an application. The court does not need to be satisfied that the defence is likely to succeed. The court does not need at this stage to examine the merits of the dispute except to the extent whether a dispute is present and if the notice of the dispute is served upon the applicant. So long as the dispute exists in fact the Adjudicating Authority has to reject the application. 22. Learned senior counsel has also relied on Transmission Corporation of Andhra Pradesh Ltd. v. Equipment Conductors and Cables Ltd. [2018] 4 Comp Cas-OL 532 (SC) ; [2019] 12 SCC 697, paragraphs 14-21. 23. Learned counsel for the corporate debtor cited further relied on the Sarguja Transport Service v. State Transport Appellate Tribunal [1987] 1 SCC 5, paragraph 7. Where a petitioner withdraws a petition filed by him without permission to institute fresh petition, the remedy under law is deemed to be abandoned by the petitioner. It would not be open to him to file a fresh petition under the same cause of action. The law confers upon a man no right or benefit which he does not desire. Whoever waives, abandons, or disclaim a right, will lose it. In order to prevent a litigant from a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mere averment does not create title or a right. The same has to be proved. Neither the averment of estoppel nor the assertion of a right to enforce the same has been made by the petitioner. Moreover, the question does not arise in the instant proceedings since estoppel cannot make what is not permitted under law permissible. The respondent at this juncture contends that the settlement agreement cannot be enforced under the IBC as the petitioner claiming under a settlement is neither a financial creditor nor an operational creditor (paragraphs 32-37). (e) Asha Sharma v. Sanimiya Vanijiya P. Ltd. MANU/Delhi/2029/ 2012-In the said case a suit had been dismissed under the provisions of Order 7, rule 11 of the CPC (paragraph 1). The said case relates to estoppel by pleadings. In paragraph 23, it is held that admissions made in documents or made orally can be explained by the maker of the statement and in that context previous admissions contained in documents cannot attract Order 7, rule 11 of the Code but admissions made in pleading stand on a different footing. The said case is inapplicable both in facts and in law and neither touches upon the principles of pre-existing dispute an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the said letter and the stamp appearing on the said letter is not of the operational creditor and is a forged stamp and that the corporate debtor has committed forgery and as such said stamps in this regard are being contemplated. The operational creditor has further denied the allegation that the settlement agreement dated October 11, 2018 is erroneous or invalid. It is denied in the rejoinder that any credit note for any sum of ₹ 15,30,49,409 was to be issued by the operational creditor. 26. It is stated that if there had been any inflated bills, the corporate debtor would have raised debit notes. It is submitted that in paragraph 12 of the earlier reply filed by the corporate debtor to the petition filed by the operational creditor, the corporate debtor had undertaken to pay the principal sum of ₹ 20,47,40,891 within a period of 180 days and had requested this Tribunal to keep the proceedings in abeyance. The corporate debtor further paid only a sum of ₹ 5 crores from November 30, 2017 to May 25, 2018 and after giving adjustment to that amount the principal sum of ₹ 15,47,40,891 is due and payable on account of principal. It is stated that ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idered as pre-existence of the disputes. The operational creditor has denied all the frivolous allegations made in the reply affidavit and submits that the corporate debtor had entered into the settlement agreement only to avoid admission of the earlier petition and had never intended to make payment of the admitted dues. Therefore, the corporate debtor entered into an agreement with the operational creditor and in view of the settlement agreement, the earlier petition was withdrawn. It is argued that the corporate debtor should not be allowed to deny its liability to pay. It is stated that the corporate debtor has acted fraudulently with mala fide intention and has filed the suit as an afterthought to avoid the payment of the legitimate dues of the operational creditor and that there is no dispute to the claim of the operational creditor. 28. During the course of the arguments, learned senior counsel reinforced his argument submitted that the settlement and agreement dated October 11, 2018 was for repayment of the operational debt claimed by the operational debt in C. P. No. 431 of 2017, minus whatever has been repaid during the pendency of the said petition. It was an opportun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice given for default of payment of the operational debt had been withdrawn as per clause in the settlement agreement and that after the default in payment as per the settlement agreement, no fresh demand notice was given under section 8(1), therefore, he submitted that this judgment is factually different and cannot be relied upon in the facts of the present case. 31. It is submitted that once in the reply notice dated November 29, 2017 the corporate debtor had admitted the operational debt, the corporate debtor is estopped from now contending that there is nothing due and payable. The corporate debtor has admittedly paid ₹ 5 crores out of the admitted sum of ₹ 20.47 crores, therefore, the corporate debtor cannot deny that there is no debt due to the operational creditor or that the debt is not an operational debt (Jai Narain Parasrampuria v. Pushpa Devi Saraf reported in [2006] 133 Comp Cas 794 (SC) ; [2006] 7 SCC 756, paragraphs 32, 33, 36-41). Learned senior counsel further submitted that having admitted the execution of the settlement agreement, the corporate debtor cannot merely wish away the agreement by alleging that the same is erroneous, invalid and ine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mminent court orders against the corporate debtor, without even paying a penny after the settlement. It is surprising to notice clause (2) which reads as follows : That upon execution of this settlement agreement, the operational creditor will withdraw the application under the Insolvency and Bankruptcy Code, 2016 with a condition that in the event of default in payment of any monthly instalments in the aforesaid manner, this settlement shall be terminated with immediate effect and the operational creditor shall be entitled to issue fresh notice and initiate fresh proceedings under the Insolvency and Bankruptcy Code, 2016 along with other remedies available under law for the entire outstanding together with interest at 24 per cent. per after giving adjustment to the payment received. Specific use of selected words fresh notice and fresh proceedings visibly and clearly expose the design of the corporate debtor intending to put the operational creditor on the long track and frustrate the claim/proceedings pending before this Adjudicating Authority, which however cannot be allowed to happen in these proceedings. We find that none of the judgments cited by the corporate deb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law, Tribunal, arbitration panel or other authority ; (b) Transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein ; (c) Any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002) ; (d) The recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor. (v) The supply of essential goods or services rendered to the corporate debtor as may be specified shall not be terminated, suspended, or interrupted during the moratorium period. (vi) The provisions of sub-section (1) shall not apply to such trans actions as may be notified by the Central Government in consultation with any financial sector regulator. (vii) The order of moratorium shall have effect from the date of admission till the completion of the corporate insolvency resolution process. (viii) Provided that where at any time during the corporate ins ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
