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2020 (5) TMI 130 - 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 - The Applicant has placed on record all the invoices, stating that the Respondent itself had acknowledged the said invoices. Once the debt is shown as due, it is for Respondent to prove that there are no outstanding dues to be paid to the Applicant. There has been much cloud in the submission of the Respondent. Therefore, without any specific details of material particulars or evidence the fact of existence of a dispute cannot be sustained. In Innoventive Industries Ltd. v. ICICI Bank Ltd. 2017 (9) TMI 58 - SUPREME COURT , the Hon'ble Supreme Court held that pre-existing dispute is the dispute raised before demand notice or invoices was received by the 'Corporate Debtor'. Any subsequent dispute raised while replying to the demand notice under section 8(1) cannot be taken into consideration to hold that there is a pre-existing dispute. 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 - The applicant has attached the copy of Bank statements in compliance of the requirement of Section 9(3)(c) of the IBC, 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 fulfillment 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 and Bankruptcy Code, 2016. 2. Existence of operational debt and default by the Corporate Debtor. 3. Pre-existing disputes raised by the Corporate Debtor. 4. Appointment of Interim Resolution Professional (IRP). 5. Imposition of moratorium under Section 14(1) of the Insolvency and Bankruptcy Code, 2016. Detailed Analysis: 1. Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016 The application was filed by M/s. Quazar Infrastructure Private Limited (Applicant), an Operational Creditor, under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC, 2016), read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. The Applicant sought to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s. Minarch Overseas Pvt. Ltd. (Respondent), the Corporate Debtor. 2. Existence of Operational Debt and Default by the Corporate Debtor The Applicant was awarded work contracts by the Respondent for civil, plumbing, fire fighting, and electrical works. The Applicant carried out the work and raised RA bills totaling ?11,09,46,395/-. Payments received amounted to ?6,14,15,261/- with TDS deductions of ?34,30,427/-. The outstanding balance claimed was ?4,61,00,707/-. Despite multiple reminders, the Respondent failed to pay the dues. A demand notice under Section 8 of the IBC, 2016 was sent on 22-3-2018, but the Respondent did not clear the outstanding amount. 3. Pre-existing Disputes Raised by the Corporate Debtor The Respondent disputed the claim, stating that the Applicant unilaterally stopped work in April 2015 and did not complete the project. The Respondent argued that the last bill was provided in February 2015, and the Applicant failed to submit final bills or provide notice of completion as required. The Respondent claimed overpayment of ?1,03,85,442/- based on their measurements. However, the Tribunal noted that the Respondent failed to raise any material dispute or provide proof of dispute before the demand notice was issued, as required by precedent cases like Innoventive Industries Ltd. v. ICICI Bank Ltd. and Mobilox Innovations (P.) Ltd. v. Kirusa Software (P.) Ltd. 4. Appointment of Interim Resolution Professional (IRP) The Applicant did not propose the name of any IRP. Consequently, the Tribunal appointed Mr. Vinod Kumar Chaurasia as the IRP, directing him to take necessary steps as per Sections 15, 17, 18, 20, and 21 of the Code. The Operational Creditor was instructed to deposit ?2 lacs with the IRP to cover expenses, subject to adjustment by the Committee of Creditors. 5. Imposition of Moratorium under Section 14(1) of the Insolvency and Bankruptcy Code, 2016 Upon admitting the application, the Tribunal imposed a moratorium as per Section 14(1) of the IBC, 2016, prohibiting actions against the Corporate Debtor. The Tribunal directed the registry to communicate the order to relevant parties and update the status of the Corporate Debtor on the Registrar of Companies' website. Conclusion The Tribunal admitted the application, establishing that the Operational Creditor was entitled to claim its dues, and the default in payment of the operational debt was beyond doubt. The Tribunal's jurisdiction was confirmed, and the necessary procedural steps for the initiation of CIRP were outlined, including the appointment of an IRP and the imposition of a moratorium.
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