TaxTMI 
TaxTMI 
2021 (10) TMI 299
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....National Company Law Tribunal, Hyderabad Bench, Hyderabad) whereby admitted the Operational Creditor's Application under Section 9 of the IBC and initiated Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. 2. In this Opinion/Judgment for shake of convenience, the parties are referred in their brief names as Operational Creditor 'SEW and Prasad. Joint Ventures Pvt. Ltd.' as SPJV, Corporate Debtor 'Gati Infrastructure Pvt. Ltd' as GIPL, Amrit Jal Venture Pvt.Ltd. as AJVPL, Guarantors namely Mahendra Investment Advisors Pvt. Ltd and Mr. Mahendra Agarwal as MIAPL and MK, Arbitrators, Mr. M. Sai Ram as Arbitrator 1 and Mr. CL Rajam as Arbitrator 2.Assignee of Operational Creditor SEW Infrastructure Ltd. as SIL. 3. The Appeal had come before the Division Bench of this Appellate Tribunal at Chennai Bench and the Hon'ble Member (J) and Hon'ble Member (T) delivered a divergent Judgment on 18.06.2021. The Hon'ble Member (J) recorded a note on the same date asking the Registrar to place the record before the Hon'ble Acting Chairperson together with copies of the Judgments for nominating a Hon'ble Third Member to render his opinion/decision in the Appeal. The H....
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.... Member. 8. Ld. Counsel for the Appellant submitted that in R Narayanasamy's Case (Supra) Hon'ble Third Member held that when question of law has neither been framed or referred, and it appears from the Judgments that the two Hon'ble Members have divergent views, on the basis of facts the Appeal should be dismissed by not interfering in the dismissal order of NCLT. The ratio of this judgment is not applicable in the facts of this case as the Hon'ble Member (T) in the opening para of the Judgment clearly recorded the points of dissent and they all are questions of law. Thus, the Judgment of R Narayanasamy in no manner either applicable to the present case or is a binding precedent which restricts the scope of opinion to be given by the Hon'ble Third Member in case of difference of opinion. 9. Ld. Counsel for the Appellant submitted that Hon'ble Member (T) crystalizes the point of dissent which are clearly questions of law for proceedings under IBC. The issues for dissent are (i) Pre-existing dispute (ii) Debtor-Creditor relationship between the Corporate Debtor and the Operational Creditor (iii) Maintainability of the Petition against the Corporate Debtor. The Hon'ble Supreme ....
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..... Brief facts of the Application under Section 9 of the IBC are that the Respondent No. 1 (Operational Creditor) (SPJV) had filed an Application before the Adjudicating Authority (National Company Law Tribunal, HDB) under Section 9 of the IBC seeking to initiate CIRP in respect of the Corporate Debtor (Appellant) (GIPL). As a matter of fact, in the said application under part IV particulars of Operational Debt, total amount of debt is mentioned as Rs. 36.01 Crores i.e. (settlement amount of Rs. 33.98 Crores plus amount withheld against motorized door and restoration of land/dump yard which is Rs. 2.03 Crores). Further, it is stated that the details of the transactions on account of which debt fell due are mentioned in the agreement dated 14.12.2013. In fact, the debt of Rs. 23.98 Croreswas payable in instalments due on various dates. The first instalment due date of payment was 28.02.2014 and the last 12th instalment due date of payment was 31.01.2015 as shown in Annexure -2 (Appeal Paper Book Pg. 111). In the column No. 2 of Part IV of the Application it is stated that the amount claimed to be in default is Rs. 31,40,37,776/- (Inclusive of interest as on 03.08.2017) and further th....
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....assigns); (C)Coastal Project Limited, a company incorporated under the Companies. Act, 1956 and having its registered office at 237, 2ndFloor, Bapuji Nagar, Bhubaneswar, 751009, Orissa, India (hereinafter referred to as "Coastal" which expression shall, unless the context otherwise requires, be deemed to include its permitted assigns); (D) Amrit-Jal Ventures Private Limited (AJVPL), a company incorporated, under the Companies Act, 1956 and having its registered ofice at 7-7-293, M.G. Road, Sccunderabad .500 003, Andhra Pradesh, India (hereinafter referred to as the "Promoter" which expression shall, unless the context otherwise requires, be deemed to include its permitted assigns). (E)Mahendra Investment Advisors Private Limited, a company incorporated under the Companies Act, 1956 and having its registered office at 1-7-293, M.G. Road, Secunderabad:500.003, Andhra Pradesh (hereinafter referred to as "MIAPL" which expression shall, unless the context otherwise requires; be deemed to include its permitted assigns); and (F)Mr. Mahendra Agarwal, Individual, Indian citizen, son of Late Mr. Prabhu Dayal Agarwal, at present residing at 2A, The Address ....
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....the date or this 'AGREEMENT: (i) the Memorandum of Understanding dated July 10, 2012 entered into amongst GIPL, SPJV. Arbitrators and Coastal ("Existing MoU") shall stand terminated in its entirety and no party thereto shall have any continuing rights and obligations thereunder; and (ii) this AGREEMENT shall be the only arrangement between any and all of the Parties in relation to the Settlement of Claims and shall govern all the rights and obligation of the Parties in relation to the Settlement of Claims. 2. The Parties mutually agree that pursuant to this AGREEMENT and notwithstanding anything contained in the Existing MoU, upon the execution of this AGREEMENT, the following terms shall be applicable in respect of the Settlement of Claims: 2.1 All amounts (including principal or interest) that are due and payable to SPJV for the purpose of Settlement of Claims shall not exceed the aggregate of the amounts set out in Schedule 1 hereto ("Settlement Amount"'); and SPJV has agreed that payment of the Settlement Amount shall result in full and final payment and settlement of all payments as due (present & future) in respect of the Construction Contract. Nothi....
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....ontractors and/or workers shall be settled in full by SPJV. SPJV hereby undertakes to, immediately on execution of this AGREEMENT and receipt of initial payment of'Rs. 10 cr. From "GIPL, inform concerned department of the Government in 'Sikkim in writing of the same and withdraw any communication to the contrary that may have been sent to Government of Sikkim. 2.6 Upon the Promoter paying the Settlement Amounts as set out in Clause 2.4 to SPJV, GIPL agrees that Promoters is eligible for recovering of trued up amounts, to the extent paid by them to SPJV from GIPL as a shareholder in GIPL and in the manner as is agreed upon between GIPL and Promoter in the existing shareholder agreement dated September 5, 2013 between GIPL and AJVPL: 2.7 SPJV shall not demand or receive any payment; prepayment, repayment, redemption or any distribution in respect, or on account, of any Settlement Amount payable to them under this AGREEMENT other than to the extent and in the manner set out in this AGREEMENT and SPJV irrevocably agree not to take any legal action or proceedings or make any claim against the GIPL in relation to the Settlement of Claims in any circumstance, onc....
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....evocably agreed not to take any legal action or proceeding or make any claim against the GIPL in relation to the Settlement of Claims in any circumstance, once the payment obligations of GIPL as set out in Clause. 2.3. has been satisfied in full. Admittedly, GIPL has paid Rs. 10 Crores on 24.12.2013. 19. As per the settlement agreement the AJVPL has to pay the balance amount of Rs. 23.98 Cr. in 12instalments as shown in Annexure -2 Paper Book (Pg. 111). First instalment was due on 28.02.2014 and the last i.e. 12thinstalment was due on 31.01.2015. As per the Clause 2.4 of the agreement in case of any delay/default in the payment of any EMI or in the final instalment, and such default is not remedied by the Promoter within a period of 30 (thirty) days from the date on which such amounts became due and payable, the Promoter shall pay interest on such defaulted amount for the period of delay @ 18% p.a., subsequently AJVPL paid only Rs. 438, 62,122/- to SPJV. However, failed to make further payments as per settlement agreement dated 14.12.2013. 20. As per clause 3 of the agreement, the Guarantors have undertaken to execute an (instrument/deed of Guarantee) in form and manner accep....
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.... of AJVPL and not as a director of GIPL. In the aforesaid letter, SPJV requested Mr. Sunil Gupta that under the agreement dated 14.12.2013 the amount which is payable to SPJV out of that amount Rs. 18 Crores be directly paid to SEW Infrastructure Ltd. (SIL) and the same shall be adjusted towards the outstanding amounts. The Ld. Adjudicating Authority has erroneously held that the email dated 21.01.2015 is admission of debt by the Corporate Debtor GIPL. 24. Now, I have considered the MOU dated 20.05.2016, the MOU was executed by (i) SEW Infrastructure Ltd. (ii) Amrit Jal Ventures Pvt. Ltd. (AJVPL) (iii) Intercontinental Infrastructure Ltd. (iv) SEW Pd. JV (SPJV). MOU is reproduced as under: MEMORANDUM OF UNDERSTANDING This Memorandum of Understanding executed at Hyderabad on this 20th Day of May, 2016 by amongst: - 1.SEW INERASTRUCTURE LIMITED, a company. Incorporated under the companies Act, 1956 and Having registered office at 6-3-871, Snehalata Greenlands Road, Begumpat Hyderabad 500016 and duly represented by its Director, Mr. V Raj Kumar (hereinafter referred as 'First party') which expression shall always include its successors and assigns....
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.... and this request has been accepted by the Second party. Accordingly, this Memorandum of understanding witnesseth as under: 1.Against the out-standing dues payable towards present and future liabilities to the First Party and Fourth Party (transferred to the First Party) the Second Party shall make payments up to Rs. 8:00-crores (Rupees: Eight: Crores Only) to the Third party under intimation to the First party. 2. Payments made as per above clause will be treated as payments made to first party and the first party will confirm and issue receipts to the Second Party, after obtaining confirmation from the Third Party 3. As and when amounts are received from the second party, the Third Party shall inform the same to the first party to enable it to adjust the account of the second party in its books of account and issue receipts to the Second Party, 4. As and when amounts are received from the Second Party, the Third Party shall adjust same against the amounts due from the First Party and Issue receipts to the first party. 5.Upon payment of Rs. 8.00 Cr by the Second Party to the third party the obligation of all the parties under t....
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.... amount, the Operational Creditor (SPJV) can recover the amount from AJVPL and the guarantors i.e. MIAPL and MK. However, the SPJV cannot recover any amount under the agreement dated 14.12.2013 from the GIPL. Thus, I hold that for the purpose of this amount, there is no relationship between them as Operational Creditor (SPJV) and Corporate Debtor (GIPL). Issue No. (ii) Whether the claim of Rs. 2.03 Crores is an Operational Debt legally recoverable from GIPL? 29. As per the Application Rs. 2.03 Crores withheld against the motorised door and restoration of land/dump yards by the GIPL. According to the GIPL the SPJV have not completed the work as per satisfaction of the GIPL. Therefore, this amount was withheld. According to the GIPL, this is a pre-existing dispute. On the other hand, as per SPJV they have completed the work to the satisfaction of GIPL and they have issued completion certificate on 24.09.2015. According to GIPL, completion certificate is issued at the request of SPJV that they have to submit the certificate to other clients. 30. To resolve the controversy, it is useful to refer the correspondence between the parties: Whether certificate of merit is a ce....
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....tory." 34. This letter is sent by SPJV to GIPL on 23.05.2017 i.e after issuance of certificate of merit dated 24.09.2015. However, in this letter there is no reference of completion certificate. On the other hand, it is admitted that Rs. 2 Crores was withheld for completing work. Thus, it can be inferred that the certificate of merit is not actual certificate of completion of work, but it is only issued to facilitate the SPJV that he can submit the same to their other clients. 35. Now, I have considered whether the SPJV has actually completed the work to the satisfaction of GIPL? SPJV has not placed on record any certificate of completion of work, there is a dispute between them in regard to completion of work. For this purpose, it is useful to refer the letter dated 21.07.2014 addressed to SPJV by GIPL at (Pg. 185) in this letter GIPL stated that the payment against whole amount of Rs. 2.03 Crores shall be made after completion of work to the satisfaction of GIPL and it is also requested to speed up the pace of the work and complete the pending work at side. On 23.01.2015 SPJV has sent a letter to GIPL and requested that they have almost all the pending works completed excep....