TaxTMI 
TaxTMI 
2019 (7) TMI 1251
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.... RGB for the Applicant at its plant based at Marakanm, Villupuram District, Tamil Nadu ("Premises") for distribution under the trademarks licensed by the Applicant for a period of 10 years till May, 2021. The parties thereafter entered into an Addendum Agreement dated April 27, 2016 ("Addendum Agreement") for inclusion of another product i.e. Mirinda Cups, till the term of the Agreement. Submission of the Applicant: 3. Learned senior Counsel for the Applicant has submitted that as per the Addendum Agreement, the Applicant at its own cost had installed manufacturing line and related equipment ("Assets") for manufacturing of such new product. These Assets were and continue to remain the property of the Applicant Company. The Corporate Debtor did not acquire any legal or beneficial interest therein. The Assets were installed/set up at the Premises of the Corporate Debtor solely for the purpose of the Agreement. The Counsel has submitted that the Assets are valued at about INR 2,57,90,983/- apart from the installation cost incurred by the Applicant towards the installation of the same. 4. The Counsel for the Applicant has submitted that under Clause 15.3(b) of the Agreement either p....
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....scheme of the Code. He further contended that it has been consistently held by the NCLT that the proceedings for insolvency under the Code are similar to the proceedings for winding up under the Companies Act, 1956. An order admitting an application under Section 7, 9 or 10 of the Code is similar to an order admitting a winding up petition under the Companies Act, 1956. Therefore, the termination of the Agreement by the Applicant is legal and valid. 8. The Sr. counsel for the Applicant has submitted that the RP had also addressed another letter dated February 22, 2018 to the Applicant alleging that a sum of INR 95,99,955/- is payable by the Applicant to Corporate Debtor. However, the Applicant has responded to this letter by its letter dated April 5, 2018 denying and disputing its alleged liability to pay a sum of INR 95,99,955/- for the reasons set out therein. The Applicant states that as per its understanding, a sum of only INR 24,34,314/- was payable by the Applicant to the Corporate Debtor. 9. The Resolution Professional (RP) in his preliminary counter has submitted that the present application is liable to be dismissed as it tantamount to violation of Section 14 of the Inso....
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....herein has approached this Tribunal with unclean hand and the Applicant is yet to pay the outstanding dues of Rs. 3,98,91,388/-. In support of the claim, the RP while filing additional counter has filed the copies of the Ledger statement of CD pertaining to the Applicant and copy of the invoice provided to the Applicant on 11.10.2018. 14. In relation to the alleged dues, the ld. Counsel for the Applicant has submitted that the Respondent had addressed a letter dated February 22, 2018 to the Applicant alleging that a sum of INR 95,99,955/- is payable by the Applicant to the Corporate Debtor. The Applicant had duly responded to this letter by its letter dated April 5, 2018 denying and disputing its alleged liability to pay a sum of INR 95,99,955/-. The Applicant has stated that as per its understanding, a sum of only INR 24,34,314/- was payable by the Applicant to the Corporate Debtor. In the above letter dated April 5, 2018, the Applicant had pointed out that the Applicant was not liable to pay any amount towards Return on Investment etc., from December, 2017 onwards since the Agreement was terminated with effect from November 28, 2017. It was further stated that the Corporate Debt....
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....nt and the corporate debtor, which reads as follows :- 15.3 "Either party may forthwith terminate this agreement if (b) The other party enters into bankruptcy, (except amalgamation or capital reconstruction), liquidation or in the event that its business or assets are confiscated or seized as a result of foreign interference or a winding up petition is admitted or if the other party makes any assignment for benefit of its creditors." The above stated condition of the contract needs to be viewed in the light of the relevant provisions of Section 14 of the IBC 2016, which are reproduced as under:- "14. (1) Subject to provisions of sub-sections (2) and (3), on the insolvency commencement date, the Adjudicating Authority shall by order declare moratorium for prohibiting all of the following, namely:- (a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any Court of 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; ....
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.... a going concern during the moratorium, and any action which is likely to frustrate the object of the CIR process is prohibited. Thus, any violation of the moratorium will certainly derail the CIR process and Resolution Plan, which the Committee of Creditors ("CoC") may be considering, thereby defeating the scope and purpose of the Code. In view of it, the Tribunal/Court has to make a contextual and purposive Interpretation of the provisions of Section 14 of the Code, so as to give effect to the intention of the Legislature. 21. It is an admitted fact that the Applicant being the Prime Contractor appointed the Corporate Debtor as its manufacturer and supplier of certain products by using its Trademarks for a period of 10 years from 12.05.2011 to 12.04.2021 vide master agreement dated 12.05.2011. Subsequently, the parties entered into an addendum to the master agreement on 27.04.2016 for manufacturing of new products. In terms of said addendum, the Applicant at its own cost has installed manufacturing line and related equipment at the site of the Corporate Debtor for manufacturing of new products. However, on 13.09.2017 this authority initiated the CIR Process against the corporate....