In this case, due to deficient supply and the terms of the oral agreement, the CD issued the two Cheques in favour of the Operational Creditor which was returned unpaid by Bank.
Hon’ble NCLT holds that:
(i) It is not in the realm of contention that issuance of a cheque becomes a promise to pay under Section 25(3) of the Contract Act, 1872 and in accordance with Section 118 of the Negotiable Instruments Act, 1881, a presumption arises to the effect that the cheque was drawn and accepted for consideration. However, these arguments do not help the OC in meeting the threshold set under IBC in this present instance.
(ii) The OC has not been able to establish by placing any evidence on record to point out that amount beyond Rs. 69,18,411 is owed by the CD to the OC in relation to the same operational debt. There is no written agreement or document delineating the settlement of an amount to the tune of Rs 1,00,00,000 or any interest arrangement vis a vis the existing debt, but the pleadings of the OC only point to an oral arrangement sans any other hard and concrete foundation for its assertions and arguments, which the CD has denied.
(iii) Dismisses the petition.