Home Case Index All Cases Insolvency and Bankruptcy Insolvency and Bankruptcy + Tri Insolvency and Bankruptcy - 2020 (4) TMI Tri This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (4) TMI 641 - 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 - In the present case, there is no such dispute as pre-existing, the dispute which was being claimed to be pre-existing by the corporate debtor did not survive - also, the applicant has attached the copy of Bank statements in compliance of the requirement of Section 9(3)(c) of the I BC 2016. The present application is complete and the Operational Creditor is entitled to claim its dues, establishing the default in payment of the operational debt beyond doubt, and fulfilment of requirements under section 9(5) of the Code. Hence, the present application is admitted - Application admitted - moratorium declared.
Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency & Bankruptcy Code, 2016 (IBC, 2016). 2. Existence of operational debt and default by the Corporate Debtor. 3. Alleged pre-existing dispute raised by the Corporate Debtor. 4. Appointment of Interim Resolution Professional (IRP). 5. Declaration of moratorium under Section 14 of IBC, 2016. Detailed Analysis: 1. Initiation of Corporate Insolvency Resolution Process (CIRP): The application was filed by M/s. A.B. Stainless Steel (Operational Creditor) under Section 9 of IBC, 2016, seeking to initiate CIRP against M/s. International Coil Ltd. (Corporate Debtor). The application included necessary authorizations and compliance with procedural requirements, including a demand notice under Section 8 of IBC, 2016. 2. Existence of Operational Debt and Default: The Operational Creditor supplied goods worth ?2,06,95,156 to the Corporate Debtor, who made part payments totaling ?99,72,452, leaving an outstanding balance of ?1,07,22,704. The Corporate Debtor issued post-dated cheques and acknowledged the debt multiple times but failed to make the payments. The Operational Creditor also submitted all relevant invoices and lorry receipts as evidence of the debt. 3. Alleged Pre-existing Dispute: The Corporate Debtor claimed that the supplied goods were delayed and of sub-standard quality, leading to deductions by Mundra Solar PV Limited. However, the Tribunal noted that the Corporate Debtor had not raised any concerns about the quality or delay before the demand notice was issued. The Tribunal referenced the Supreme Court rulings in Innoventive Industries Ltd. v. ICICI Bank Ltd. and Mobilox Innovations (P.) Ltd. v. Kirusa Software (P.) Ltd., which clarified that disputes must be raised before the demand notice to be considered pre-existing. The Tribunal found the Corporate Debtor's defense to be unsupported by evidence and thus not a valid pre-existing dispute. 4. Appointment of Interim Resolution Professional (IRP): The Tribunal appointed Mr. Rajesh Kumar Gupta as the IRP, directing him to perform duties as specified under Sections 15, 17, 18, 20, and 21 of IBC, 2016. The Operational Creditor was instructed to deposit ?2 lakhs with the IRP to cover initial expenses, subject to adjustment by the Committee of Creditors. 5. Declaration of Moratorium: Upon admitting the application under Section 9(5) of IBC, 2016, the Tribunal declared a moratorium as per Section 14(1) of IBC, 2016, prohibiting certain actions against the Corporate Debtor. The moratorium would remain in effect during the CIRP, ensuring the Corporate Debtor's assets are protected and operations continue without disruption. Conclusion: The Tribunal found that the application was complete and the Operational Creditor had established a default in payment of the operational debt. The Tribunal admitted the application, initiated CIRP against the Corporate Debtor, appointed an IRP, and declared a moratorium. The Tribunal also directed the Registry to communicate the order to relevant parties and update the status of the Corporate Debtor on the Registrar of Companies' website.
|