2021 (2) TMI 1199 - Tri - Insolvency and Bankruptcy

Debtor directed to settle outstanding debt within 3 months, emphasizing need for genuine efforts in debt recovery

 Dyanamic Engineers Limited Versus Muhlenbau Equipments Private Limited

The Court disposed of the petition seeking the initiation of Corporate Insolvency Resolution Process against the Corporate Debtor for defaulting on a ... Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational creditors - pre-existing dispute or not - time limitation - HELD THAT:- As admitted by the Petitioner, as mentioned supra, the Corporate Debtor paid ₹ 6,60,000/- as an advance. And, as against two invoices dated 09.12.2016 for an aggregate amount of ₹ 37,86,750/-, the Respondent paid part-payment of ₹ 18,06,773/- and another part-payment of ₹ 5 Lakh in June 2017 with an assurance to clear the remaining balance amount shortly but failed to do so. Therefore, the Petitioner, after waiting for a long time, has issued demand Notice only on 13.11.2019, under provisions of Code, to the Respondent. The instant Petition is admittedly filed with an intention to recover the alleged balance amount, which is against the object of Code, and the settled position of law on the issue. Since the Respondent has paid part-payments with an assurance to clear the balance in short time, the Petition can be disposed of by directing the Respondent to settle the claim within prescribed time. The Respondent is directed to settle the claim of Petitioner as promised, within a period of three months from the date of receipt of copy of this order, failing which, the Petitioner is entitled to take appropriate legal course of action, in accordance with law - Petition disposed off. Issues Involved:Initiation of Corporate Insolvency Resolution Process based on default amount of Rs. 12,96,427/- by Operational Creditor against Corporate Debtor.Detailed Analysis:1. Facts of the Case:The Operational Creditor filed C.P. (IB) No. 119/BB/2020 seeking to initiate the Corporate Insolvency Resolution Process against the Corporate Debtor for defaulting on a total amount of Rs. 12,96,427/-. The Corporate Debtor had placed a purchase order with the Operational Creditor for supply and commissioning of automation and control systems. Despite making part-payments, the Corporate Debtor failed to clear the remaining balance, prompting the Operational Creditor to issue a Demand Notice under the I&B Code, 2016.2. Legal Proceedings:The case was listed on multiple dates to allow the Respondent to defend its case. The Petitioner served notice to the Corporate Debtor and filed an affidavit confirming the same. The Court considered the pleadings of both parties, relevant provisions of the Code, and the law on the issue.3. Judgment and Analysis:The Court noted that the Corporate Debtor had made part-payments and assured to clear the remaining balance shortly. The Operational Creditor issued the Demand Notice only after waiting for a considerable period. The Court found that the Petition was filed with the intention to recover the alleged balance amount, contrary to the objectives of the Code. As the Respondent had shown willingness to settle the claim, the Court disposed of the Petition by directing the Respondent to settle the outstanding amount within three months.4. Directions of the Court:The Court directed the Respondent to settle the claim as promised within three months, failing which the Petitioner could take appropriate legal action. A certified copy of the order was to be forwarded to both parties, and no costs were awarded in the matter.This judgment highlights the importance of considering the conduct of parties in debt recovery cases under the I&B Code, emphasizing the need for genuine efforts to resolve outstanding dues before resorting to insolvency proceedings.