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Judgment
L.N. Gupta, Member (T)
The present Petition is filed under the Section 9 of the Insolvency and Bankruptcy Code, 2016 (for brevity 'IBC, 2016') read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (for brevity 'the Rules') by M/s. R.K. Associates and Hoteliers Pvt. Ltd. through its authorized Representative Sh. Shri Sharan Bihari Aggarwal (for brevity 'Operational Creditor'), with a prayer to initiate the Corporate Insolvency Resolution Process against M/s. BW Businessworld Media Pvt. Ltd. (for brevity 'Corporate Debtor').
The Operational Creditor namely, M/s. R.K. Associates & Hoteliers Pvt. Ltd. is a Company incorporated under the provisions of Companies Act, 1956 having its registered office at A-25, Hospital Road, Jangpura-A, New Delhi-110014.
The Corporate Debtor namely, M/s. BW Businessworld Media Pvt. Ltd. is a Company incorporated on 31.10.2013 under the provisions of Companies Act, 2013 with CIN No. U22190DL2013PTC259734, having its registered Office at J-6/55, Upper Ground Floor, Rajouri Garden, New Delhi-110027.
The Authorized Share Capital of the Corporate Debtor is Rs. 2,00,00,000 and its Paid-up Share Capital is Rs. 5,60,890 as per the Master Data of the Company annexed.
It is submitted by the Operational Creditor that in June 2018, IRCTC Ltd. issued a tender document/corrigendum for "Publishing and Distribution of the Board Magazine for Indian Railways - Rail Bandhu. It is further submitted by the Corporate Debtor that it was looking for financial support for the same in order to submit bid against the Tender.
It is averred by the Operational Creditor that on 18.06.2018, both the parties entered into a Memorandum of Understanding (MoU) for working together on the projects in Indian Railways. It is added that the purpose of the MoU was to cooperate for jointly qualifying, developing, bidding, executing and or operating the projects in publication, printing and media.
It is further submitted by the Operational Creditor that both the parties envisaged execution of further documents to form a Joint Venture Special Purpose Company as a bidding consortium with participation of both the parties with interest in the ratio of 50:50.
It is stated by the Operational Creditor that the Corporate Debtor participated in the IRCTC Tender of June 2018 and submitted its bid on 22.06.2018. It is further submitted by the Operational Creditor that on 14/16.08.2018, IRCTC Ltd. issued a Letter of Award for publishing and distribution of "On-board Magazine For Indian Railways - Rail Bandhu" in favour of the Corporate Debtor. The said Letter of award is reproduced below :
It is further submitted by the Operational Creditor that the Letter of Award vide its Para 4 required submission of Performance Guarantee to IRCTC. It is added by the Operational Creditor that the Corporate Debtor had sought extension of 15 days vide its Letter dated 20.09.2018 for making payment of the Performance Guarantee to IRCTC.
The Operational Creditor, in light of the aforesaid background of the case, has submitted the following facts in respect of its 'Operational Debt' in Part IV of the Petition :
(i) On 27.09.2018, R.K. Associates and Hoteliers Pvt. Ltd., transferred a total amount of Rs. 72,09,975/- to BW Businessworld Media Pvt. Ltd. in two tranches being Rs. 31,37,500/- as its share towards performance guarantee to be submitted to IRCTC Ltd. by the Addresse/noticee BW Businessworld Media Pvt. Ltd. and Rs. 40,72,475/- as share towards first installment for first year Revenue sharing.
(ii) That on 29.09.2018 R.K. Associates and Hoteliers Pvt. Ltd., transferred further amount of Rs. 50,00,000/- to the account of BW Businessworld Media Pvt. Ltd. by way of NEFT Transfer.....
(iii) That on 12.03.2019, IRCTC Ltd. terminated the contract awarded to BW Businessworld Media Pvt. Ltd. for Publishing and Distribution of On Board Magazine for Indian Railways - Rail Bandhu, encashed the performance guarantee and further informed that the liquidated damages shall be intimated in due course.
Thus, for fault of the Corporate debtor the amount of Rs. 1,22,09,975 immediately fell due to the Operational Creditor w.e.f. 12.3.2019 and interest @ 18% p.a. was also payable w.e.f. 13.3.2019. The dues remain unpaid....."
The Operational Creditor had sent a Demand Notice dated 31.05.2019 under the Section 8 of IBC 2016 vide Registered Post at the registered office of the Corporate Debtor. It is further submitted by the Operational Creditor that the Corporate Debtor had replied to the Demand Notice vide its Letter dated 14.06.2019. The same has been averred in the Affidavit filed by the Operational Creditor under Section 9(3)(b) of IBC, 2016.
That the Corporate Debtor has submitted that there is a pre-existing dispute between the Parties. During the course of hearing, it was pointed out by the Ld. Counsel of the Corporate Debtor that an Arbitration Proceeding is pending between the Parties.
That this Tribunal had directed the Corporate Debtor to submit the documents regarding the Arbitration Proceedings on 09.12.2019. The same are filed by the Corporate Debtor.
On perusal of the documents of the Arbitration, it is amply clear that the Operational Creditor is not a party to the same. Hence, the same cannot be treated as a dispute between the Parties.
Therefore, the only thing which needs to be examined by this Bench is, whether the Debt of the Operational Creditor falls under the definition of the 'Operational Debt' or not.
The Section 5(21) of the IBC, 2016 defines the 'Operational Debt' as follows :
"Operational debt" means a claim in respect of the provisions of goods or services including employment or a debt in respect of the [payment] of dues arising under any law for the time being in force and payable to the Central Government, any State Government or any local authority;"
In the present case, the 'debt' in question is arising out of the payment made by the Operational Creditor as its share for the purpose of submission of Performance Guarantee to the IRCTC Ltd. by the Corporate Debtor. It is clear that the debt in question is neither arising out of any payment due towards supply of goods and services nor out of any employment.
This Bench is of the opinion that the payment towards Performance Guarantee or any such business proposition cannot be treated as 'Operational Debt'. The petition is, therefore, dismissed.
It is made clear that any of the observations made in this Order shall not be construed as an expression of opinion on the merits of the claim and the right of the Petitioner before any other forum shall not be prejudiced on account of dismissal of the instant Petition.