Akshat Pandey v Avighna Films Private Limited
C.P. (IB) No. 178/KB/2021
Facts:
1.In 2019 Corporate Debtor had two directors being Pujarini Ghosh and Sohini Ghosh. However, on 10 April, 2019 the Operational Creditor was inducted as an Additional Director in the Corporate Debtor for production of a movie, tentatively named as Rifle or Dial 100.
2.Operational Creditor produced the movies for a total investment made to the tune of Rs.1,14,25,000/- (Rupees One Crore Fourteen Lakh Twenty Five Thousand only). All payments were made by the Operational Creditor through his bank for the completion of the cinema.
3.On 22 may, 2019 one of the director i.e., Ms. Sohini Ghosh entered into an agreement with one another company Editfx Studios Pvt. Ltd., to restrict any other person other than Ms. Sohini Ghosh to allow post production contents of the movie as well as restrain the director of the movie / cinema towards release of the movie / cinema as well as negation of the proposed return on investment to the Operational Creditor.
4.Pujarini Ghosh did not accepted the terms of the the agreements between Ms. Sohini Ghosh and Editfx Studios Pvt. Ltd. Therefore negation of the proposed return on investment to the Operational Creditor also came to an halt.OC filed Company Petition under section 9 of the Insolvency and Bankruptcy Code, 2016 (“the Code”) by Akshat Pandey (“Operational Creditor”) seeking to initiate Corporate Insolvency Resolution Process (“CIRP”) against Avighna Films Private Limited (“Corporate Debtor”).
Issue: Whether an investment made by the Director of the Company falls under the definition of Operational Debt?
Arguments:
For Operational Creditor:
1.Operational Creditor vide its letter dated 06 January, 2021 under section 8 of the Code to the Corporate Debtor, asked the Corporate Debtor to return the investment amount of the Operational Creditor. In pursuance of the aforesaid letter, Ms. Sohini Ghosh vide her notice dated 14 January, 2021 requested for settlement but without any payment. Till date no payment has been received by the Operational Creditor.
For Corporate Debtor:
1.The Operational Creditor has no locus standi to institute this instant proceeding. Further, the Operational Creditor is trying to misuse the provisions under the Code.alleged debt of the Operational Creditor is barred by limitation and should be rejected as ab initio. There is no cause of action against the Corporate Debtor, neither this application
2.Corporate Debtor was planning to produce the movie titled ‘Rifle’. Through a common acquaintance the directors of the Corporate Debtor came to know that the Operational Creditor was also in the business of producing a movies/cinema. The Operational Creditor became the director of the Corporate Debtor after understanding the commercial prospect of the movie.
3.Corporate Debtor had promised the directors to provide funding for the pre-production till the theatrical release of the film but he did not honored his investment. This action of the Operational Creditor led to loss of the Corporate Debtor
Decision: Investmeng made by director of the Corporate debtor does not fall under the purview of operational debt.
Rationale:
1.As per the definition of the term Operational Debt in the Code, it is clear that a debt is considered to be an operational debt, when it is confined under three categories; (i) Goods, or; (ii) Services (including employment), or; (iii) a debt in respect of the re-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
Order copy:
