Tribunal dismisses insolvency petition, finds default not proven, creditors to seek alternative recourse

The Tribunal dismissed the petition under Section 7 of the Insolvency and Bankruptcy Code, as it found the default by the Corporate Debtor was not established, and the application was barred by limitation. The claims of Financial Creditors not party to the Memorandum of Understanding were deemed untenable, and the validity of the dishonored cheques was to be determined in separate proceedings. The Financial Creditors were permitted to seek alternative legal recourse, with the order issued on 31st August 2022.

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Issues Involved:
1. Whether the Corporate Debtor defaulted on the financial debt owed to the Financial Creditors.
2. Whether the application under Section 7 of the Insolvency and Bankruptcy Code (IBC) is barred by limitation.
3. Whether the claims of the Financial Creditors other than the original parties to the Memorandum of Understanding (MOU) are tenable.
4. Validity and genuineness of the dishonoured cheques provided as evidence of default.

Issue-Wise Detailed Analysis:

1. Default on Financial Debt:
The Financial Creditors argued that a loan was given to the Corporate Debtor under an MOU dated 09.11.2013, with terms including a loan amount not exceeding Rs. 69,00,000/- and an interest rate of 18% per annum. The Corporate Debtor partially repaid the loan, but a principal amount of Rs. 21,04,561/- and interest remained unpaid. The Corporate Debtor contended that it was not a party to the MOU and had repaid the entire loan amount. The Tribunal found that the MOU did not bind the Corporate Debtor and that the petitioners who were not parties to the MOU could not claim the debt based on it.

2. Limitation:
The Tribunal noted that the date of default was not mentioned in the petition, which is crucial for determining the cause of action and the limitation period. According to the Hon'ble National Company Law Appellate Tribunal (NCLAT) decision in Meena V. Kothari vs. Maberest Hotels Pvt. Ltd., the application under Section 7 of IBC must be filed within three years from the date of default. The last payment was made on 04.11.2016, and the petition was filed on 03.09.2019, making it barred by limitation.

3. Claims of Other Financial Creditors:
The Tribunal observed that only Shri Shyam Sundar Poddar and Shri Sital Kumar Poddar were parties to the MOU, and their cumulative transfer to the Corporate Debtor was Rs. 90,000/-. The other petitioners, who were not parties to the MOU, could not support their claims with any document. Therefore, their claims were not tenable, and the claims of Shri Shyam Sundar Poddar and Shri Sital Kumar Poddar did not meet the minimum financial threshold under the Code.

4. Validity of Dishonoured Cheques:
The Financial Creditors provided dishonoured cheques dated 02.09.2019 as evidence of default. However, the Corporate Debtor argued that the cheques were issued as security in 2015 and were now used with mala fide intentions. The Tribunal stated that the validity and genuineness of the cheques could only be determined in appropriate proceedings and not in summary proceedings under the Code. Therefore, the dishonoured cheques could not be taken into account.

Conclusion:
The Tribunal concluded that the default on the part of the Corporate Debtor was not established, and the petition was incomplete due to the absence of an explicit date of default. Consequently, the petition was dismissed, but the Financial Creditors were free to pursue other legal remedies. The order was signed on 31st August 2022, and the registry was directed to send e-mail copies of the order to all parties and their counsel.

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