TaxTMI 
TaxTMI 
2025 (12) TMI 947
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.... (hereinafter referred to as 'CIRP') has been initiated against the Corporate Debtor. 2. The brief facts of this case as noted in the impugned order are as under: i) Corporate Debtor was incorporated on 17.12.2007. ii) The Operational Creditor (hereinafter referred to as 'OC'), M/s Healthians Research Centre Pvt. Ltd. had provided services in furtherance of the service agreement dated 07.04.2022 entered into by the OC and Vimhans Nayati Super Speciality Hospital (hereinafter referred to as 'Vimhans Niyati'/'Hospital'). iii) Over a period of time, numerous invoices were raised by the Operational Creditor. The initial payments were made by the Corporate Debtor. In the invoices raised the GSTN of the Corporate Debtor is shown. iv) There were defaults in payment. The Corporate Debtor issued 27 post- dated cheques totalling Rs. 1,80,44,000/- in favour of the Operational Creditor. However, all the cheques were returned dishonoured. v) On assurance of the Corporate Debtor, a closure service agreement dated 31.08.2022 was entered terminating the service agreement and cheques for settlement amount of Rs. 1,50,00,000/- were issued by the Corpor....
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....he Corporate Debtor. 9. The question that now arises is that 'Whether the payment by cheque which is dishonoured amounts to acknowledgement of a debt and a liability?'. We are supported by the Judgment passed by the Hon'ble Gujrat High Court in the matter of Hindustan Apparel Industries v Fair Deal Corporation, New Delhi AIR 2000 Guj 261. The relevant paragraph is extracted below: '7. [...] In this view of the position of law reflecting upon issuance of a cheque, it has to be stated that a cheque would prima facie amount to an admission of debt unless a contrary intention has been expressed by the person issuing the cheque. Such an admission of payment of debt is to be determined with reference to the point of time at which the purported admission was made, that is to say, when the cheque was issued. Merely because subsequently such a cheque is dishonoured and the admission is retracted the admission or the acknowledgement can hardly be said to cease as an admission/acknowledgement of liability. To hold otherwise would be contrary to fair play between the parties, and justice and equity. With profound respect to the Bench in Chintaman's case (AIR 1956 Bom 553)....
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.... not intercede each other. In fact, a bare reading of Section 14 of the IBC would make it clear that the nature of proceedings which have to be kept in abeyance do not include criminal proceedings, which is the nature of proceedings under Section 138 of the N.I. Act. We are unable to appreciate the plea of the learned counsel for the Appellant that because Section 138 of the N.I. Act proceedings arise from a default in financial debt, the proceedings under Section 138 should be taken as akin to civil proceedings rather than criminal proceedings. We cannot lose sight of the fact that Section 138 of the N.I. Act are not recovery proceedings. They are penal in character. A person may face imprisonment or fine or both under Section 138 of the N.I. Act. It is not a recovery of the amount with interest as a debt recovery proceedings would be. They are not akin to suit proceedings." 13. Thus, deriving from the jurisprudence established by the Hon'ble Supreme Court, it is evident that while recovery proceedings, which are barred under Section 14 of the Insolvency and Bankruptcy Code (IBC), are primarily civil in nature, proceedings under Section 138 of the Negotiable Instrument Ac....
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.... Corporate Debtor is not a party to the Service Agreement and the Closure Agreement, it is evident that the invoices have been issued under the Corporate Debtor's GSTIN, and payments were correspondingly made by the Corporate Debtor. Therefore, the assertion by the Corporate Debtor that it is not privy to the aforementioned arrangements is devoid of merit and untenable. 18. In light of the above facts and circumstances, it is ordered as follows: - a) The Application bearing IB-327(PB)/2023 filed by the Applicant/Operational Creditor, under section 9 of the Code read with Rule 6 of the Adjudicating Authority Rules for initiating CIRP against the Corporate Debtor is admitted. b) We also declare moratorium in terms of Section 14 of the Code. The necessary consequences of imposing the moratorium flows from the provisions of Section 14(1)(a), (b), (c) & (d) of the Code." 3. The Ld. Counsel for the Respondent/Operational Creditor in his written and oral submissions stated as under: i. The Vimhans Hospital had engaged the appellant/Corporate Debtor for providing various services, including OPD and IPD services. ii. The appellant had represen....
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....2015 for operating and managing the OPD centre, for running IPD services and for operating diagnostic, radiology and pathology labs, etc. vi. The Trust had entered into a separate agreement with Operational Creditor on 07.04.2022 for providing laboratory services in the Hospital and for running 5 OPD rooms. Subsequently, a closure agreement was entered between the Operational Creditor and the Trust on 31.08.2022. vii. The role of the Corporate Debtor is restricted to merely issuing cheques on behalf of the Trust. viii. Separate proceedings under Section 138 of the Negotiable Instruments Act, 1881, have been initiated by the Operational Creditor regarding dishonour of cheques. ix. The judgment cited by the Operational Creditor relating to acknowledgement of debt on issuance of cheques relate to just extension of time limit under the Limitation Act and cannot be ipso facto strict proof of acknowledgement of an operational debt. x. The appellant referred to decision in the case of G.L. Engineering Industries Pvt. Ltd. v. Supreme Engineering Ltd. in Company Appeal (AT) (Ins.) No. 431 of 2021 and Hotel Diplomat v. Folio Holdings (India) Pvt. ....
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.... dated 07.04.2022 (placed at page 47 of Appeal Paper Book) are: i. Vimhans shall provide 5 OPD chambers to Operational Creditor. ii. Operational Creditor guarantees revenue share of 15 lakhs per month to Vimhans. iii. Agreement is for 3 years and either party can terminate by 30 days advance notice. iv. The relationship between the parties shall be on principal to principal basis. v. Operation's shall be initiated w.e.f. 11.04.2022. vi. 15 car parking space shall be provided by Vimhans. vii. The agreement defines various profit-sharing ratios for critical management, surgical procedures, day care etc. between Vimhans and Operational Creditor. There is no mention of Corporate Debtor in this agreement. Further, the agreement between Vimhans and Operational Creditor is on "principal to principal basis". 12. The service agreement between the Operational Creditor and the Trust was short lived, as it started on 07.04.2022 and ended with the "closure of service agreement" terminating the earlier agreement on 31.08.2022. 13. The closure of Service Agreement dated 31.08.2022 is placed at page 50 of Appeal Paper Bo....
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....utes of the meeting dated 09.04.2018 nowhere record that SRCPL has taken over the responsibility of payment, as the payer is not identified. The unilateral Indemnity Bond given by EBPL records in para 11, that the Indemnity Bond is given both to SRCPL and GDCL, and it is binding on EBPL. 7.12 We note that a similar issue was considered by the Hon'ble Supreme Court in M/s Essar Oil Limited v. Hindustan Shipyard Ltd. & Ors. in Civil Appeal Nos. 3353 and 3355 of 2005 wherein ONGC, as principal employer, had entered into a contract with Hindustan Shipyard Ltd, which in turn has entered into a sub-contract with M/s Essar Oil Limited (the appellant in both the appeals). In paragraphs 24 and 25 of the said judgment, the Hon'ble Supreme Court has noted as under: "24. It is true that the ONGC had made payment to the appellant directly on several occasions. Upon perusal of the correspondence, we find that some understanding, but not amounting to any agreement or contract, was arrived at between the ONGC and the respondent for making direct payment to the appellant, possibly because the respondent was not in a position to make prompt payments to the appellant. It also appear....
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.... matter of 'Essar Oil Limited' Vs. 'Hindustan Shipyard Ltd. & Ors.', has held that when a 'principal employer' grants a contract to a Construction Company the sub-Contractors cannot sue the 'principal employer' for any issues, if payable, as there is no 'privity of contract' between the sub- Contractors and the 'principal employer'....." 15. This Tribunal is of the considered view that any promise made in the letter dated 17.10.2018, specifically having regard to Clause 6.1.4 of the 'Agreement for Civil Works and Construction' entered into between Embassy Energy Private Limited and ISPL, whereby and where under, it was clearly specified that the sub-Contractor, would not have any contractual relationship with the owner and would not be entitled to prefer any 'Claims' against the owner, these amounts claimed cannot fall within the definition of 'acknowledgement of debt' in the absence of any contractual relationship between the 'Operational Creditor' and the 'Respondent' herein." 7.15 From the facts of this case as narrated above, and in the light of judicial pronouncements cited above, it can be said that there was no privity of contract between SRCPL and EBPL and....