TaxTMI 
TaxTMI 
2020 (9) TMI 1084
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.... Petition, which are relevant to the issue in question, are as follows: (1) M/s. Digital Waves International Pvt Ltd (Petitioner/ Operational Creditor) bearing the CIN: U30007KA2003 PTC032994 and having its Registered Office situated at No. 58/1, 13th Cross, Margosa Road, Mallweshwaram, Bengaluru 560003. The Company is engaged in business of imports, exports, trading in all kinds of computers, computer peripheral and various commodities. (2) M/s. Aria Brew and Dina Private Limited (Respondent/ Corporate Debtor) was incorporated on 04.06.2015 having CIN: U55101KA2015PTC080679 and having its registered Office situated at No. 40/1 Century Corbel Commercial 2nd Floor, Sahakaranagar Main Road, Sahakaranagar Bengaluru 560092. Its Nominal Share Capital is Rs. 11,00,00,000/- and Paid-up Share Capital is Rs. 11,00,00,000/-. The Respondent Company is engaged in the business of hospitality services and run a micro-breweiy/restaurant 'Druid Garden'. (3) It is stated that the Respondent Company entered into several High Sea Sale Agreements with Applicant on different occasions in the year 2016 for supply of materials for the brewery cum restaurant "Druid Garde....
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....he Applicant is exorbitant and they lack substance. Further, it is submitted herein that the amount claimed to be due including the principal and interest is about Rs. 1.98 Crores which is not true and is fallacious. The Applicant had paid an amount of Rs. 1.18 Crores till date. The balance amount is only about multiple cheques for an amount of Rs. 97 lakhs. (2) It is alleged that the Applicant had not disclosed all the series of transactions which have bearing on the case. The Applicant also had withdrawn the cases filed under Section 138 of the Negotiable instruments Act, 1881 upon the issuance of such cheques/Demand Drafts, the details of the said withdrawals of the cases is submitted herewith. The following is the table establishing the fact of repayment and the balance payment to be made: Particulars Amount paid (In Rs. ) CC 22389/19 15,00,000 CC 22390/19 15,00,000 CC 26656/19 15,00,000 PCR 15570/19 15,72,116 CC 17686/19 12,87,777 CC 18200/19 15,00,000 RTGS dated 24.01.2019 ....
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....01.2019 Axis Bank Cheque No. 689398 dated 31.01.2019 17.12.2019 memos enclosed Axis Bank Cheque No. 15,00,000 Withdrawn Copies of 689400 dated 31.01.2019 vide memo order and Axis Bank Cheque No. dated withdrawal 689401 dated 31.01.2019 Axis Bank Cheque No. 689402 dated 31.01.2019 29.01.2020 memos enclosed Axis Bank Cheque No. 15,72,116 Withdrawn Copies of 707796 dated 29.06.2019 vide memo order and Axis Bank Cheque No. dated withdrawal 689345 dated 03.07.2019 Axis Bank Cheque No. 707786 dated 03.07.2019 Axis Bank Cheque No. 689337 dated 03.07.2019 29.01.2020 memos enclosed Axis Bank Cheque No. 15,00,000 Withdrawn Copies of 689406 dated 30.04.2019 vide memo order and Axis Bank Cheque No. dated withdrawal 689407 dated 30.04.2019 Axis Bank Cheque No. 689408 ....
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....te high sale and heavy turnover and, therefore, in such a situation, such delay in payment would not constitute a ground empowering the court to initiate the insolvency proceedings. The Applicant cannot be oblivious of the fact that the Corporate Debtor is an ongoing concern having regular business and employment of employees, initiation of Insolvency Proceedings would adversely affect the functioning of the Corporate Debtor. Insolvency Proceedings under the Insolvency and Bankruptcy Code, 2016 and the rules there under cannot be adopted as recourse to recovery of debt. (6) Therefore, the Adjudicating Authority is urged to dismiss the Petition. 4. Heard Shri Kanni Selvakarsan, learned Counsel for the Petitioner and Shri Hari Babu Thota, learned PCS for the Respondent, through Video Conference. We have carefully perused the pleadings of the Parties, and the extant provisions of the Code, the Rules made there under, and the law on the issue. 5. Shri Kanni Selvakarsan, learned Counsel for the Petitioner, while reiterating various contentions, as briefly stated supra, has further submitted that the Debt and Default in question are admittedly not in dispute, as part- paym....
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....sions of Sections 7, 9 and 10 of Code, are suspended temporarily. The Central Government has vide Notification No. S.O. 1205(E) [F.N0.30/9/2020-INSOLVENCY], dated 24-3-2020, specified one crore rupees as the minimum amount of default. It is relevant to note that Section 4 refers to Part II of the the Insolvency and Bankruptcy Code, 2016which covers from Section 4 to Section 77. Therefore, Part II is not applicable in the instant case as the amount of default is less than one crore rupees. Moreover, Section 9(5) is under Part II which is not applicable as on this date, implying that the provision on admitting the application does not apply today. Further, Section 9(6) of the Code specifically provides that corporate insolvency resolution process shall commence from the date of admission of the application under sub-section (5) of Section 9. Though every amendment of Rule/Act, would normally will have prospective effect, nevertheless, the Adjudicating Authority is under legal responsibility to keep the above developments in mind, while deciding question of admission of a case. Since the issue involved in the instant is the question of admission and not dealing with admitted case, we ....
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....ct of the Code. It is also relevant to point out here that legal principle of double jeopardy would also applicant to the instant case, as the Petitioner has admittedly invoked provisions of N.I Act for dishonour of cheques issued by the Respondent, which is sub-judice. The Adjudicating Authority cannot enter into above disputed issues, in summary proceedings as contemplated under provisions of Code. 10. It is settled position of law that the provisions of Code cannot be invoked for recovery of outstanding alleged amount(s). The Hon'ble Supreme Court in the case of Mobilox Innovations Private Limited Vs. Kirusa Software Private Limited, (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 Corporation of A.P. Ltd. Vs. Equipment Conductors and Cables Ltd., (CA No. 9597 of 2018) dated 23rd October, 2018, (2018) 147 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 the Cod....