TaxTMI 
TaxTMI 
2021 (12) TMI 359
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....reditor) through Mr. Ajay Kumar Tantia, its company secretary, authorised by the resolution passed by the board of directors at its meeting held on November 14, 2019, seeking initiation of corporate insolvency resolution process in respect of BST Infratech Ltd., CIN : U27310WB2007PLC114311, another corporate entity, having its office at 1, R. N. Mukherjee Road, Martin Burn House Building, 2nd Floor, North Block, Room Nos. 231 and 232, Kolkata-700 001, West Bengal (hereinafter referred as the corporate debtor). 3. The operational creditor has submitted in Part IV of form 5 that the operational creditor and the corporate debtor are engaged, inter alia, in the sale and purchase of billets, M. S. Scrap, etc., and as per the requirement, the operational creditor had placed orders upon the corporate debtor to supply materials, and on several occasions even the corporate debtor used to place orders upon the operational creditor for supply of materials. It is submitted that between August 9, 2012 to March 6, 2017 the operational creditor raised 1017 number of invoices for supplies made by the operational creditor to the corporate debtor. The corporate debtor made part payment in respect....
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....bmitted that in the rejoinder, the operational creditor had given the details of the payments received after the issuance of the demand notice. Thereafter, when the matter was ready for hearing, the corporate debtor approached the operational creditor and expressed its desire to settle the matter. The corporate debtor represented to the operational creditor that the corporate debtor would make payment of a sum of Rs. 15,47,40,891 in instalments and agreed to make payment on account of interest at 24 per cent. per annum if the corporate debtor fails to make payment in terms of the agreement. The operational creditor, believing the said representation to be true, agreed to settle the matter and a settlement agreement was signed between the parties. Copy of the settlement agreement dated October 11, 2018 is annexed as annexure I-F. In terms of the settlement agreement, the operational creditor withdrew the petition vide copy of the order dated October 12, 2018. It is submitted that in terms of the settlement agreement, the corporate debtor was to make payment in instalments but the corporate debtor failed and neglected to make payment of even a single instalment. Therefore, the operat....
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....en made by the corporate debtor and that the corporate debtor is liable to make payment of the said principal sum of Rs. 15,47,40,891 along with a sum of Rs. 4,05,97,227 on account of agreed interest calculated at 24 per cent. per annum from October 12, 2018 to November 14, 2019. It is submitted that the operational creditor is also entitled to interest at 24 per cent. per annum till payment is received in term of the agreement dated October 11, 2018. 9. The operational creditor has mentioned the date of default as October 12, 2018. 10. Thus, the total amount claimed by the operational creditor from the corporate debtor is Rs. 15,47,40,891 along with interest at 24 per cent. per annum from October 12, 2018 to November 14, 2019 totalling up to an amount of Rs. 19,53,38,118. 11. The operational creditor has enclosed all the relevant documents along with the petition. 12. The operational creditor has proposed the name of Mr. Santosh Choraria, to act as an IRP having Registration No. IBBI/IPA-001/IPP00549/ 2017-18/10979, who has consented vide his affidavit and form 2 submitted that he has agreed to accept the appointment as IRP if an order admitting the present application....
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....service of the purported demand notice, the first one dated September 3, 2019 which was served on the corporate debtor on September 21, 2019 and the second one dated November 15, 2019 the corporate debtor instituted on September 9, 2019 a title suit in the court of the learned judge City Civil Court at Kolkata being Title Suit No. 132 of 2019. It is submitted that the settlement agreement is subject matter of the lis pending before the court of City Civil Court at Kolkata. It is submitted that the purported debt as alleged in the said application is the core issue in pre-existing lis, before the City Civil Court at Kolkata. Therefore, in the facts and circumstances, no debt is due and payable by the alleged corporate debtor to the operational creditor as wrongly alleged or claimed by the operational creditor and that the issue is pending adjudication before the competent civil court. 15. The corporate debtor has thus submitted that this application is an abuse of the process of law and that the amount claimed is denied and disputed. 16. During the course of arguments, learned senior counsel for the corporate debtor submitted that pursuant to the recording of the settlement ag....
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.... counsel has further submitted that the present petition has not been instituted on the cause of action of C. P. (IB) No. 431/KB/2021 but is instead premised on the alleged default of the terms of the settlement between the parties dated October 11, 2018. 20. It is submitted that the proceedings under sections 7 and 9 of the IBC are not maintainable in respect of a claim arising out of a settlement in that the creditor is neither a financial nor an operational creditor within the meaning of section 5(7) and (20) of the IBC. To buttress his arguments, learned senior counsel has placed reliance on : Brand Realty Services Ltd. v. Sir John Bakeries India P. Ltd. [2021] 13 Comp Cas-OL 307 (NCLT), C. P. (IB) No. 1677(ND) of 2019 (paragraphs 10-14). Delhi Control Devices P. Ltd. v. Fedders Electric and Engineering Ltd. (decided on May 14, 2019) [2019] SCC Online NCLT 8030 ; [2021] 13 Comp Cas-OL 286 (NCLT), paragraphs 9, 12, in C. P. (IB) No. 343/ALD/ 2018. Nitin Gupta v. International Land Developers P. Ltd. [2021] 13 Comp Cas-OL 290 (NCLT), C. P. (IB) No. 507/ND/2020, paragraphs 9-12. Trafigura India P. Ltd. v. TDT Copper Ltd. [2021] 13 Comp Cas-OL....
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....re is no decree and consequently the petitioner cannot be held to be a creditor within the meaning of section 3(10) of the Code. On the contrary the said judgment repeatedly holds that a claim arising out of a settlement or agreement does not fall within the definition of financial creditor or operational creditor under section 5(8) and (21) of the Code (paragraphs 2, 49, 53). (b) Ramchandra Jivaji Kanago v. Laxman Shrinivas Naik, AIR 1945 PC 54-The ratio of this decision is that the limitation begins to run from the time facts entitling the plaintiff to have instrument cancelled or set aside become known to him. The respondent does not take the point of limitation and since the petition has been filed for default occurred on October 12, 2018 as stated in form 5, upon default in honouring of the settlement agreement, this judgment is not applicable to the case in hand (paragraph 5). (c) Nathani Steels Ltd. v. Associated Constructions [1995] 3 (Supp) SCC 324-The ratio of this judgment is that unless a settlement is set aside it cannot lie in the mouth of one of the parties to the settlement to spurn the same on the ground that it was a mistake and then proceed to i....
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....9)-In the said judgment the first CP was allowed to be withdrawn due to some technical error in the board resolution "with liberty to file fresh application" (paragraph 5). In the present case no leave has been obtained to file afresh. (h) Ranjan Kumar Sovasaria M/s. Hanusita and Sons v. Apeejay Tea Ltd. (C. P. (IB) No. 1104/KB/2018)-In the said judgment, it was held that no dispute as stated in section 5(6) of the Code existed between the parties. The suit, which came up for consideration, did not dispute the claim of the operational creditor specifically but many personnel of the company had been made a party. The factum of the suit and the factum of the dispute therein were found to be drastically different. Hence, the petition was allowed. Herein, the suit of the respondent clearly and squarely assails the claim amount and dispute is in respect of the same transactions, on which the petitioner bases their claim on. Hence, the dispute is very much existence in contrast to the one in the judgment relied upon by the petitioner. 25. In the rejoinder however, learned senior counsel for the operational creditor has denied and disputed the allegations and averments made in....
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....talment. The operational creditor denied that the demand notice of September 3, 2019 was served on the corporate debtor on September 12, 2019. It is submitted that the demand notice dated September 3, 2019 was posted on September 4, 2019 and from the track report of the said notice, it is clear that on September 5, 2019 the remark is "item on hold, door locked" and on September 6, 2019 the remark is "item on hold door locked" and the delivery is shown on September 12, 2019. In the reply dated September 21, 2019 the corporate debtor alleged that the corporate debtor had already filed a suit on September 9, 2019. It is, therefore, evident from the above that the corporate debtor did not accept the service of notice on September 5 and 6, 2019 and received the said notice only on September 12, 2019. 27. The corporate debtor was thus aware of the said notice on September 6, 2019 itself and deliberately did not receive the same and received only on September 12, 2019 with ulterior motive and mala fide intentions and filed the suit on September 9, 2019. The said suit is not yet validly instituted because of non-payment of court fee. In the plaint, the corporate debtor alleged that the ....
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....ment. It is submitted that the aforesaid settlement agreement is nothing but an admission in writing by the corporate debtor to repay the operational debt due to the operational creditor by way of instalments. It is submitted that the present petition being C. P. (IB) No. 911 of 2020 is not merely for default under the settlement agreement in making payment but is continuation of C. P. No. 431 of 2017. It is submitted that the default in payment of the operational debt is subject matter of section 8(1) notice and the present petition. 29. It is submitted by learned senior counsel that in Ashok Agarwal v. Amitex Polymers P. Ltd. reported in MANU/NL/0034/2021 in paragraphs 23, 25, 39, 40, 43 to 48, that the default in payment in terms of the settlement agreement recorded by way of a consent decree in a suit, it was held to be a default in payment of an operational debt. Learned senior counsel further referred to Naresh Sevantilal Shah v. Malharshanti Enterprises in paragraph 36 and Tata Hitachi Construction Machinery Co. P. Ltd. v. Universal Industrial Equipment and Technical Services P. Ltd. at paragraph 11 and submitted that in these two cases cited by learned senior counsel, th....
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..... 32. It is submitted that the corporate debtor has acted in a fraudulent and dishonest manner. The corporate debtor first entered into the settlement agreement in the proceedings under section 9 of IBC, 2016 being C. P. (IB) No. 431 of 2017 which was withdrawn for reasons mentioned therein. After the proceeding was withdrawn, the corporate debtor with ulterior motive and mala fide intention did not make a single instalment as had been promised in the agreement. After seeing the contents of the demand notice dated September 3, 2019 the corporate debtor intentionally did not receive the said letter on September 5, 2019 and September 6, 2019 and filed a suit on September 9, 2019. The said suit cannot be considered as pre-existence of the dispute. 33. Having gone through the petition, reply and rejoinder including all the documents filed by the parties on record particularly the paper book relating to the previous C. P. (IB) No. 431/KB/2017 and the settlement agreement dated October 11, 2018 it is our considered view that even if specific permission has not been sought to re-file the proceedings on the cause of action having arisen in favour of the operational creditor, once the....
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....een the parties is a proved default on its part and its failure to pay the instalments, the right to sue rightly accrued in favour of the operational creditor. The agreed debt forming part of the settlement agreement dated October 11, 2018 is an admitted operational debt which had to be paid off within the stipulated time but since the corporate debtor has failed to perform its obligation under the aforesaid agreement, it is certainly a default which calls for an immediate action by this Adjudicating Authority. We, therefore, have no option but to admit this petition and order initiation of corporate insolvency resolution process against the corporate debtor in the following : Orders (i) The application filed by the operational creditor under section 9 of the Insolvency and Bankruptcy Code, 2016 for initiating corporate insolvency resolution process against the corporate debtor, BST Infratech Ltd., is hereby admitted. (ii) We hereby declare a moratorium and public announcement in accordance with sections 13 and 15 of the I and B Code, 2016. (iii) Moratorium is declared for the purposes referred to in section 14 of the Insolvency and Bankruptcy Co....