Tribunal Dismisses Petition, Citing Ongoing Litigation & Lack of Qualification under Insolvency Code

The Tribunal dismissed the Petition due to the existence of a dispute and ongoing litigation before the High Court, stating it does not qualify for admission under the Insolvency Code. The Tribunal emphasized it cannot adjudicate on a matter sub judice before a higher judicial forum. Consequently, the Petition was dismissed.

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Issues Involved:
1. Existence of a dispute
2. Operational Debt definition
3. Specific Performance Civil Suit and Insolvency Proceedings
4. Jurisdiction and limitation

Detailed Analysis:

1. Existence of a Dispute:
The Respondent objected to the admission of the Petition citing the "existence of a dispute." The Respondent referenced a suit for specific performance filed before the Hon’ble Bombay High Court, which involved the same evidence and claims as the Insolvency Petition. The Respondent argued that the refund sought was associated with the supply of sugar machinery to Mashkour Sugar Company Limited, Sudan, and that the advance was received on behalf of Mashkour. The Respondent denied any advance was repayable under the tri-partite agreement of 18.12.2010. The Tribunal noted that the Petitioner was contesting a "Specific Performance Civil Suit" while pressing for insolvency proceedings for the same amount, which cannot proceed simultaneously. The Tribunal emphasized that the existence of a dispute disqualifies the Petition from being admitted under the Insolvency Code.

2. Operational Debt Definition:
The Tribunal examined whether the impugned debt falls within the definition of "Operational Debt" as prescribed under Section 5(21) of the Insolvency and Bankruptcy Code. It was noted that an operational debt involves claims in respect of the provision of goods or services. The Tribunal observed that the question of whether the impugned amount was in respect of the "repayment of the dues" is a subject matter before the Hon’ble High Court and is yet to be adjudicated. Therefore, it is not permissible for the Tribunal to give an opinion on this issue, as it is sub judice before a higher judicial forum.

3. Specific Performance Civil Suit and Insolvency Proceedings:
The Tribunal highlighted that the Petitioner was already agitating the same facts and amount of debt before the Hon’ble High Court of Bombay. The Tribunal noted that the provisions of the Insolvency Code are clear that if there is an "existence of a dispute" regarding the debt, the Petition is not fit for admission. The Tribunal further stated that accepting the Petition would imply that the alleged amount is accepted as "Operational Debt," which is not permissible when the issue is sub judice before the High Court.

4. Jurisdiction and Limitation:
The Respondent argued that the claim is barred by limitation as the amount was paid in August 2011, and the first demand came in November 2017, more than six years later. The Respondent also contended that there exists no debtor-creditor relationship between the Applicant and the Respondent, and any amount paid was on behalf of Mashkour. The Respondent emphasized that the matter should have been referred to arbitration and that only courts in Sudan have jurisdiction. The Tribunal did not explicitly address these points but focused on the existence of a dispute and the pending litigation before the High Court.

Conclusion:
The Tribunal dismissed the Petition, stating that due to the existence of a dispute and the ongoing litigation before the Hon’ble High Court of Bombay, the Petition does not qualify for admission under the Insolvency Code. The Tribunal emphasized that it is not permissible to adjudicate on an issue that is sub judice before a higher judicial forum. Accordingly, the CP (IB)-20(MB)/2018 stood dismissed.

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