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2020 (4) TMI 183 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT - Mere plain reading of the provision shows that an application under section 9 can only be rejected on the following grounds mentioned in section 9 sub-section 5 (11) and if it is not covered under any of the clause of section 9 sub-section 5 (11) then the Adjudicating Authority in view of the decision of M/S. INNOVENTIVE INDUSTRIES LTD. VERSUS ICICI BANK ANR. 2017 (9) TMI 58 - SUPREME COURT has no option but to admit the application under section 9 (5) (11) of the Code. In the light of such provision, when we shall consider the case in hand then we find that admittedly no dispute was raised under section 8, sub-section 2 of the Code and the amount claimed by the Operational Creditor has not been paid by the Corporate Debtor and we have also noticed that the application is complete and there is no disciplinary proceeding pending against the proposed IRP who has also given his consent. The amount claimed by the Operational Creditor is more than ₹ 1 lakh which is the minimum threshold limit fixed under IBC, 2016 therefore,under such circumstances we have no option but to reject the contention of the Corporate Debtor that the application is not maintainable and it is liable to be rejected rather we are of the considered view that the Operational Creditor has succeeded to establish this fact that he was duly appointed by the Corporate Debtor and joined new assignment and a transfer was made by Corporate Debtor in terms of offer letter and the amount claimed in the petition is not paid to the Operational Creditor, which he is entitled to get in lieu of services rendered by him. Petition admitted - moratorium declared.
Issues Involved:
1. Limitation Period 2. Termination of Service 3. Existence of Operational Debt 4. Pre-existing Dispute 5. Maintainability of Petition Issue-wise Detailed Analysis: 1. Limitation Period: The Corporate Debtor contended that the application was barred by limitation as the last payment was made on 14-8-2015, and the petition was filed on 7-6-2019, beyond the three-year limit. However, the tribunal found that the last payment was made on 6-2-2016, and the recommendation for payment by the Dean of Govt. Medical College was made on 22-12-2018, within the three-year period. Thus, the application was within the limitation period as per Section 18 of the Limitation Act, 1963. 2. Termination of Service: The Corporate Debtor argued that the Operational Creditor's services were terminated telephonically in 2015 and that he joined a new assignment thereafter. The tribunal found no evidence of a formal termination order and noted that the Operational Creditor continued working in a project managed by a sister concern of the Corporate Debtor. The tribunal also noted that the offer letter did not mention any probation period, and the Corporate Debtor failed to provide proof of termination. 3. Existence of Operational Debt: The Operational Creditor claimed an outstanding amount of ?46,42,230.22, including unpaid salary, interest, mental harassment compensation, and legal expenses. The tribunal found that the Corporate Debtor did not dispute the employment or the dues in response to the demand notice under Section 8 of the Insolvency & Bankruptcy Code, 2016. The tribunal also noted that the amount claimed was more than ?1 lakh, the minimum threshold under the IBC. 4. Pre-existing Dispute: The Corporate Debtor argued that there was a pre-existing dispute regarding the Operational Creditor's performance and his employment status. However, the tribunal found no evidence of any formal dispute raised by the Corporate Debtor within the stipulated 10-day period after receiving the demand notice. The tribunal also noted that the Corporate Debtor failed to provide any document showing a pre-existing dispute. 5. Maintainability of Petition: The tribunal considered whether the petition met the requirements under Section 9 of the IBC. It found that the application was complete, the amount claimed was unpaid, and there was no disciplinary proceeding against the proposed Interim Resolution Professional (IRP). The tribunal also noted that the Corporate Debtor did not raise any valid objections under Section 9(5)(ii) of the IBC. Conclusion: The tribunal admitted the petition and initiated the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. A moratorium under Section 14 of the IBC was imposed, and Mr. Kumud Shekhar was appointed as the IRP. The Operational Creditor was directed to deposit ?2 lakhs for immediate expenses of the IRP, to be reimbursed by the Committee of Creditors (CoC) as CIR costs. The tribunal also directed that copies of the order be sent to both parties and the IRP for further steps as required under the statute.
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