TaxTMI 
TaxTMI 
2019 (7) TMI 965
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....s of the case, as mentioned in the Company Petition, are as follows: (1) M/s. Posterscope Outdoor Advertising Private Limited ('Applicant/Operational Creditor') is a Company incorporated under the provisions of Companies Act and having its registered office at 6th Floor, B-Wing, Poonam Chambers, Dr.Anne Besant Road, Worli, Mumbai-400018. The Company is engaged in the business of providing advertising and allied services, including display on hoardings and printing, maintaining and replacing of flex hoardings, etc. (2) M/s. Nitesh Residency Hotels Private Limited ('Respondent/Corporate Debtor') is a Company incorporated on 14.12.2006 under the provisions of Companies Act, 1956 with CIN: U55101KA2006PTC041203. The Authorized Share Capital of the Company is Rs. 750,00,00,000/- (Rupees Seven Hundred and Fifty Crores Only) and Paid-up Share Capital of the Company is Rs. 169,41,27,880/- (Rupees One Hundred and Sixty Nine Crores Forty One Lakhs Twenty Seven Thousand Eight Hundred and Eighty Only). The Company is engaged in the business of development, maintenance and sale of residential and commercial real estate in India. (3) M/s. Nitesh Estates Limited and M/s....
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....nd final settlement of the dues owed by the Corporate Debtor and its Sister Concerns to Applicant and withdraw the winding-up proceedings against Applicant, and Applicant would withdraw the representations made by it to the Associations. Moreover, in the Settlement Agreement, the Corporate Debtor and its Sister Concerns acknowledged and undertook to pay amounts in the following manner: a. Rs. 35,00,000/- (Rupees Thirty Five Lakhs Only) at the time of execution of the Settlement Agreement; b. Rs. 30,00,000/- (Rupees Thirty Lakhs Only) payable within 6 months of the date of execution of the Settlement Agreement with the Corporate Debtor undertaking to pay Rs. 10,00,000/- (Rupees Ten Lakhs Only) in two equal instalments and the other two Sister Concerns each undertaking to pay Rs. 10,00,000/- (Rupees Ten Lakhs Only) in two equal instalments. (6) In accordance with the terms of the Settlement Agreement, Applicant withdrew its representations made to the Associations. Nitesh Estates Ltd. withdrew the winding-up proceedings against Applicant and the same was recorded vide order dated 15.12.2016 in CP No. 266/16. The Corporate Debtor and its Sister Concerns only....
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.... alia contending as follows: (1) It is stated that the claim made by the Petitioner is not maintainable under the IBC, 2016 since the claim does not fall within ambit of the definition of 'Operational Debt' vis-a-vis the Petitioner cannot be termed as Operational Creditor. (2) It is stated that Section 2 of the IBC, 2016, applies to Limited Companies, Companies governed by Special Act, LLP's, body Corporates and Partnership firms relating to their insolvency, liquidation, voluntary liquidation or bankruptcy as the case may be. This means the Code applies to Complies which are insolvent or going in for liquidation or bankruptcy. In this case the Respondent is not insolvent or in liquidation or bankrupt for the Petitioner to move the NCLT for admission of their Petition. (3) It is stated that Section 4 of the IBC, 2016, applies to matters relating to the insolvency and liquidation of Respondent where the minimum amount of default is Rs. 1,00,000/-. This means that the Code applies to Companies which are insolvent and which are not capable of paying Rs. 1,00,000/-. In this case the Respondent is not insolvent for the Petitioner to move the NCLT for admission....
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....hese issues would need to be deliberated before the Trial Court by way of leading evidence etc., and not before the NCLT through this Petition. The Petitioner has failed to provide the necessary Board approvals of M/s. Nitesh Housing Developers Pvt. Ltd. and M/s. Nitesh Residency Hotels Pvt. Ltd. authorizing M/s. Nitesh Estates Ltd. to sign off the Agreement. (8) It is further stated that the Agreement on which the Petitioner has come before this Court has not been duly stamped as per requisite provisions under the Stamp Act. Therefore, this Court cannot rely on the document to pass orders on such a serious issue under the IBC. (9) It is also stated that the Respondent Company is not an Insolvent Company and is a well-established entity and with many persons working directly and indirectly in this Company and they also have contractual work with other Companies and individuals. (10) As per IBC, 2016 the Demand Notice as per Section 8 of the Code is mandatory to initiate Insolvency proceeding. The Petitioner had initially served a Demand Notice dated 17.07.2018 claiming an amount of Rs. 10,15,000/- (Rupees Ten Lakhs Fifteen Thousand Only). After the issue ....
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....oes not fall within the definition of an Operational Creditor and neither does the claim amount being claimed by the Petitioner fall within the definition of Operational Debt. The letter dated 31.07.2017 by the Respondent clearly states that there is no operational debt due and payable to the Petitioner and the claim under settlement cannot be considered as Operational Debt. Only on these grounds the Petition is liable to be rejected and dismissed on the threshold. (15) Since the Settlement Agreement was signed and filed with the Bombay High Court in CP. No. 95 of 2016, the course available to the Petitioner is to recall the order of the Settlement before Bombay High Court. The Petitioner cannot urge the non-payment of money which has been settled before the Bombay High Court through IBC Petition. (16) It is stated that there was a notice of dispute issued by Respondent and the Petition is liable to be rejected in the light of judgment of Hon'ble Apex Court in Kirusa Software Private Limited (supra), wherein, it was held that once the Petitioner has filed an application, which was otherwise complete, the Adjudicating Authority must reject the application under Sec....
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....claims of the Respondent in that winding up matter was against the interest of the Petitioner they agreed to settle the dispute by way of a Settlement Agreement by payment of Rs. 65,00,000/-. This Petition filed by the Petitioner is a counter blast to the same through which the Petitioner is seeking to extract monies by the threat of IBC, 2016 admission which has serious ramifications for the future of the Respondent Company and its survival would be at stake. 4. Heard Ms.Sahana Devanathan, learned Counsel for the Applicant and Shri Uday Shankar, and learned Counsel for the Respondent. I have carefully perused the pleadings of the parties and the extant provisions of the Code. 5. Both the learned counsels have again reiterated their respective pleadings as briefly stated supra. 6. Admittedly, both the parties are in business relationship by way of executing Agreements with regard to Outdoor Advertising of Nitesh Group of Companies business including display on Hoardings, mounting/installations, printing, installation of Flex Hoarding including maintaining and replacement of Flex Hoarding as per the direction of Nitesh Estates and at the locations specified. There was an ou....
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....s settled position of law that provisions of Code cannot be invoked for recovery of outstanding amount but it can be invoked to initiate CIRP for justified reasons as per the Code. The Hon'ble Supreme Court in the case of Mobilox Innovations (P.) Ltd. v. Kirusa Software (P.) Ltd. (2018) 1 SCC 353, has inter alia, held that IBC, 2016 is not intended to be substitute to a recovery forum. In another latest judgment rendered in Transmission Corpn. of A.P. Ltd. v. Equipment Conductors and Cables Ltd. (CA No. 9597 of 2018) dated 23rd October, 2018, (2018) 47 CLA 112 (SC), Supreme Court of India, it is, inter alia, held that existence of undisputed debt is sine qua non of initiating CIRP. As per para 34 of judgment, it is stated that Adjudicating Authority, while examining an application filed under Section 9 of Code, will have to determine: i. Whether there is an 'operational debt' as defined exceeding Rs.l Lakh? ii. Whether documentary evidence furnished with the application shows that the aforesaid debt is due and payable and has not yet been paid? iii. Whether there is existence of dispute between the parties or the record of the pendency of a suit or arbitr....