CIRP Cannot be Initiated over undecided Claims or Unregistered Agreements

Smarkworks Coworking Spaces Pvt. Ltd Vs Turbot HQ India Pvt. Ltd. (NCLT Cuttack)

The Liquidated Damages will crystalize only after the adjudication by the competent Civil Court. This cannot be determined in the Insolvency Proceedings; undecided claim cannot be used to bring an application for insolvency.

When the agreement is engrossed on unstamped paper, the said instrument is not admissible in evidence for any purpose, unless stamp duty and penalty is paid as provided under Section 35 (a) of Indian Stamp Act. 1869. The unstamped instrument should be impounded under Section 33 of Indian Stamp Act, but here on the petitioner side filed only Photo Copy of the unstamped agreement, the same cannot be impounded in view of Apex Court Citation Hariom Agarwal -vs- Prakash Chand Malviya India kanoon. Org/doc/1515290/ In fine it is answered that the impugned agreement was engrossed on unstamped paper. In these circumstances the unstamped and unregistered agreement cannot be considered, it has no legal value, If the impugned agreement dated 17.08.2018 is set apart from the legal proceeding, the claim of the Petitioner stand without base; in consequence the Petitioner plea is negatived.

FULL TEXT OF THE NCLT CUTTACK ORDER

1. The petitioner/Operational Creditor engaged in the business of coworking and shared office space in different centers of India. The Operational Creditor entered into an agreement dated 17t^h August, 2018 with the Corporate Debtor in respect of service centre situated at Kolkata. As per the agreement, petitioner agreed to provide serviced office space consisting of 44 works stations at an agreed monthly fee of Rs. 3,52,000/- plus taxes. In the agreement lock-in period of 36 months clause is added. The agreement came into effect from 1^ST October, 2018. During the continuance of the agreement period on 4t^h June 2019 the Corporate Debtor intimated to the petitioner that they intend to terminate the agreement from the first week of September, 2019.The petitioner brought to the notice of the Corporate Debtor about the lock-in-period terms of the agreement. The Corporate Debtor left the coworking centre from 01.09.2019 and ending the agreement dated 17t^h August, 2018. The Corporate Debtor paid payment only up to July,2019. The Operational Creditor sent statutory notice to corporate debtor under Section 8 of the Insolvency and Bankruptcy Code, 2016. Claiming an amount of Rs. 1,28,95,402/- (One Crore Twenty-Eight Lakhs Ninety-Five Thousand Hundred two). The notice was responded by the Corporate Debtor by his reply dated 28t^h August 2020 with falls and frivolous allegation and denying payment. Hence this petition.

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