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2023 (6) TMI 504
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....Appellant' / 'Operational Creditor', under Section 9 of the Insolvency and Bankruptcy Code, 2016, R/w. Rule 6 of the I & B (AAA) Rules, 2016), wherein, at Paragraphs 5 to 10, it is observed as under: 5. "Shri Rohan Kothari, learned Counsel for the Respondent, has filed Objections dated 17.04.2021 by inter alia contending as follows: (1) The present Petition is wholly misconceived, not maintainable in law or on facts, and is liable to be dismissed in limine. The alleged operational debt claimed herein is not an undisputed or admitted liability, and hence this Petition ought not to be admitted. The Petition does not make out an intelligible claim in respect of the total amount of outstanding debt and is inconsistent in the specific amount claimed. The defaulted amount alleged to have arisen in the Award dated 29.11.2018 passed in arbitration proceedings, bearing case reference No. DAC/1854/12-17, by the Ld. Arbitrator, Delhi International Arbitration Centre (DIAC). And the Award was passed ex-parte. When the Respondent was notified of the ex-parte award passed against it, the Respondent filed an Appeal u/s 34 of the Arbitration and Conciliation Act, 1996 before the ....
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....is stated to be pending before the Hon'ble Delhi High Court. In this regard, it is relevant to point the recent judgement rendered by the Hon'ble Supreme Court, in Gujarat Urja Vikas Nigam Ltd Vs. Mr. Amit Gupta and others (2021) SCC Online, SC 194, wherein, it is inter alia clarified about general jurisdiction of NCLT/NCLAT, under Section 60(5)(c) of IBC in the following terms: "67. The institutional framework under the IBC contemplated the establishment of a single forum to deal with matters of insolvency, which were distributed earlier across multiple fora......., Therefore, considering the text of Section 60(5)(c) and the interpretation of similar provisions in other insolvency related statutes, NCLT has jurisdiction to adjudicate disputes, which arise solely from or which relate to the insolvency of the Corporate Debtor. However, in doing so, we issue a note of caution to the NCLT and NCLAT to ensure that they do not usurp the legitimate jurisdiction of other Courts, Tribunals and fora when the dispute is one which does not arise solely from or relate to the insolvency of Corporate Debtor. The nexus with the insolvency of the Debtor must exist." Therefore, th....
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....t the Award in question, as detailed supra. Though material papers with regard to filing of Appeal are not furnished due to Covid situation, we took into consideration of the statement of the Respondent that they have filed Appeal against the Award and it is still pending adjudication. 9. So far as the contentions of Respondent that there is discrepancy in the amount claimed in demand notice, in the instant Petition, in service Record of Default with the Information Utility produced by the Petitioner along with Affidavit dated 09.03.2021 etc. are concerned, they are un-tenable as amount awarded in award is not in dispute, and the interest accrues on award amount due to passage of time. 10. For the aforesaid reasons, circumstances of the Case, and the law on the issue, we are of considered opinion that filing of the instant Petition is filed on misconception of fact and law, and it is solely filed for recovery of amount awarded in Arbitration, and thus it is liable to be dismissed.'' and resultantly, 'dismissed' the main 'Petition', without Costs. Appellant's Contentions: 3. Challenging the 'validity', 'propriety' and 'legality' of the 'impugned order', da....
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.... Learned Counsel for the Appellant submits that, on 20.06.2017, the 'Appellant', was in receipt of a Letter from the 'Respondent', stating that they were 'desirous' of 'Terminating, the said 'Agreement', and moving out of the premises on or before 22.09.2017, and further requested the 'Appellant', for the 'Adjustment' of the 'Rent', and 'Arrears', from the 'Security Deposit'. 10. The Learned Counsel for the Appellant points out that the 'Appellant', had issued 'several mails', requiring the Respondent's to clear all the 'Outstanding Dues', before moving out of the premises, but the 'Respondent', had failed to clear its 'Dues'. Hence, the 'Appellant'(after adjusting the 'Security Deposit'), had issued a 'Letter' / 'Notice', dated 25.08.2017, invoking 'Clause 13' of the said 'Agreement'. 11. According to the Appellant, the Respondent, had issued a 'Letter' dated 14.09.2017 (responding to the 'Letter' / 'Notice' of the 'Appellant', dated 25.08.2017), admitting its 'Dues', and agreed to pay the 'Outstanding Sum', along with 'Interest'. That apart, the Respondent, through Letter dated 14.09.2017, had offered an 'Unreasonable Payment Methods', which were not feasible and the Appell....
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....e 'impugned order', is in negation of the ingredients of the I & B Code, 2016. 17. The Learned Counsel for the Appellant forcefully comes out with a plea that as long as the 'Debt', is not 'barred', by 'Limitation', an 'Operational Creditor', can institute 'proceedings', under Section 9 of the 'Code'. Besides this, an 'Arbitral Award', can be treated as an 'Operational Debt', and that the 'Respondent', has failed to 'prove', any 'grounds', as are mentioned in Section 9(5)(ii) of the I & B Code, 2016, to pray for 'dismissal' of the 'Petition', filed by the 'Appellant'. 18. According to the Appellant, the language employed under Section 9 (5) (i) of the I & B Code, 2016, is mandatory, and hence, the 'Petition', should have been 'admitted', by the 'Adjudicating Authority'. 19. Continuing further, the Learned Counsel for the Appellant submits that the I & B Code, 2016, does not specify an 'Outer Limit', within which, an 'Application', under Section 9 of the 'Code', is to be filed. 20. The Learned Counsel for the Appellant, while rounding up, prays for the instant 'Appeal', being 'allowed', by this 'Appellate Tribunal', by setting aside the 'impugned order', dated 27.04.2021....
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....g must be pre-existing i.e. it must exist before the receipt of the demand notice or invoice, as the case may be. 20. The Adjudicating Authority, therefore, when examining an application under Section 9 of the Act, will have to determine the following: (Mobilox Innovations Case3, SCC p. 394, Para 34) "34. ... (i) Whether there is an "operational debt" as defined exceeding Rs 1 lakh? (See Section 4 of the Act.) (ii) Whether the documentary evidence furnished with the application shows that the aforesaid debt is due and payable and has not yet been paid? and (iii) Whether there is existence of a dispute between the parties or the record of the pendency of a suit or arbitration proceeding filed before the receipt of the demand notice of the unpaid operational debt in relation to such dispute? If any one of the aforesaid conditions is lacking, the application would have to be rejected. Apart from the above, the adjudicating authority must follow the mandate of Section 9, as outlined above, and in particular the mandate of Section 9(5), and admit or reject the application, as the case may be, depending upon the factors mentioned in Section 9(....
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.... the Arbitral Award passed against it, and the mere factum of challenge would be sufficient to state that it disputes the Award. Such a case would clearly come within para 38 of Mobilox Innovations (supra), being a case of a pre-existing ongoing dispute between the parties. The Code cannot be used in terrorem to extract this sum of money of Rs. two lakhs even though it may not be finally payable as adjudication proceedings in respect thereto are still pending. We repeat that the object of the Code, at least insofar as operational creditors are concerned, is to put the insolvency process against a corporate debtor only in clear cases where a real dispute between the parties as to the debt owed does not exist. 27. We repeat with emphasis that under our Code, insofar as an operational debt is concerned, all that has to be seen is whether the said debt can be said to be disputed, and we have no doubt in stating that the filing of a Section 34 petition against an Arbitral Award shows that a pre-existing dispute which culminates at the first stage of the proceedings in an Award, continues even after the Award, at least till the final adjudicatory process under Sections 34 & 37 h....
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.... case, an award has been passed in favour of the Petitioner, his status is as good as of a decree holder. Hence, he can come within the scope of the Operational Creditor and the Arbitral amount which is unpaid, can be treated as a default of debt has occurred. For the sake of convenience, the relevant provisions of Section 3 (10) and 3 (11) are reproduced herein below: "Section-3: In this code, unless the context otherwise requires,- (1) ....... xxxxxx (10) "creditor'' means any person to whom a debt is owed and includes a financial creditor, an operational creditor, a secured creditor, an unsecured creditor and a decree holder; (11) "debt'' means a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operational debt; xxxxxx 21. Further, the Section 5(21) define the Operational Debt which reads as under: Section 5 xxxxxx (21) "operational debt'' means a claim in respect of the provision of goods or services including employment or a debt in respect of the repayment of dues arising under any law for the time being in force and payable to ....
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....thority', the 'Appellant' / 'Petitioner' / 'Operational Creditor', in Part-IV of the 'Application CP (IB) No. 276 / BB / 2019 (filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, r/w. Rule 6 of the I & B (AAA) Rules, 2016), had claimed a 'Total Sum of Debt' i.e., Rs.23,02,523/-, being the amount 'due', from the 'date of filing of the Claim', namely 19.01.2018 as per the 'Arbitral Award', pronounced on 29.11.2018 till 30.04.2019, in the arbitration reference DAC / 1854 / 12-17, between K.K. Ropeways Limited Versus Billion Smiles Hospitality Pvt. Ltd. The award was pronounced on 29.11.2018 in favour of K.K. Ropeways Limited for recovery of Rs.26,33,022/- along with interest @ 15% pa. The award was made on account of non-payment of lease rentals as per the 'Lease / Rent Agreement', dated 09.03.2015, water and electricity charges, Common Area Maintenance charges, diesel generator charges and TDS to K.K. Ropeways Limited. The date from which such 'Debt', fell 'Due', was 19.01.2018. 27. It comes to be known that the 'Arbitral Award', was passed by the 'Arbitrator, on 29.11.2018, under the 'Arbitration and Conciliation Act, 1996', between K.K. Ropeways Limited v. Billion....