2019 (3) TMI 1653 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor defaulted in paying to the Operational Creditor - existence of dispute and debt or not - HELD THAT - There are no merit in the argument of the Corporate Debtor counsel saying that the debtor is under no obligation to pay the dues for the supply of power already availed under the old agreement dated 15.11.2014 - For it is not even the case of the debtor that this claim is hit by limitation, obligation to pay to the supply availed is already cleared and dispute existing between the parties, we cannot arrive to a conclusion that the debtor is relieved from paying the dues against the power supplied by the creditor. Since the Creditor has filed copies of invoices, earlier agreement dated 15.11.2014 entered into between the parties, subsequent agreement, Demand Notice dated 07.03.2018 sent to the Corporate Debtor and also Reply Notice dated 19.03.2018 by the Corporate Debtor, we are of the view that this Applicant/Operational Creditor has established the existence of debt as well as default, whereby, this Company Petition is hereby admitted. Petition admitted - moratorium admitted.

Summary

Issues:
1. Interpretation of agreements between Operational Creditor and Corporate Debtor regarding power supply and payment.
2. Whether a new agreement supersedes obligations under an earlier agreement.
3. Obligation of Corporate Debtor to pay for power supplied under the old agreement despite a new agreement being in place.
4. Establishment of debt and default by the Operational Creditor for initiation of Corporate Insolvency Resolution Process.

Analysis:
1. The Operational Creditor filed a Company Petition under Section 9 of the Insolvency & Bankruptcy Code, 2016, claiming non-payment of dues amounting to 1,54,05,282.30 by the Corporate Debtor for power supplied. The parties had agreements for power supply, with a new agreement dated 20.05.2016 superseding an earlier agreement from 15.11.2014.

2. The Corporate Debtor argued that obligations under the old agreement were extinguished by the new agreement, thereby relieving them from paying dues under the earlier agreement. However, the Tribunal examined the nature of the agreements and the power supply, emphasizing that the debt for power already consumed remains despite the existence of a new agreement.

3. It was clarified that the dispute was not about enforcing specific clauses of the agreements but about the obligation to pay for services availed. The Tribunal highlighted that the debtor cannot evade payment for power already consumed based on subsequent agreements, as the obligation to pay arises from the services or goods availed, not the agreement's enforceability.

4. The Tribunal found no merit in the Corporate Debtor's argument that they were not obligated to pay dues under the old agreement. With evidence presented by the Operational Creditor, including invoices and agreements, the Tribunal established the existence of debt and default, leading to the admission of the Company Petition for Corporate Insolvency Resolution Process.

5. The Tribunal declared a moratorium, prohibiting certain actions against the Corporate Debtor, ensuring the supply of essential goods or services, and appointing an Interim Resolution Professional. The order of moratorium was to be in effect until the completion of the insolvency resolution process or liquidation of the Corporate Debtor. The public announcement of the Corporate Insolvency Resolution Process was also mandated.