2018 (10) TMI 1766 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment - Whether the petitioner served the demand notice to the respondent under Section 8 of the Code before filing the petition? - challenge to the evidence of the petitioner is over the name of sender on the postal receipt of Page 22 of the paper book. It is addressed to the respondent-corporate debtor but the same purports to be sent by Blue Apple Trad - HELD THAT - The respondent cannot take advantage of the aforesaid discrepancy because the tracking report of the delivery of the postal article to the respondent on 12.04.2018 carries the presumption of correctness. The demand notice is addressed by the operational creditor to respondent-corporate debtor as is evident from the document Annexure A-1 (colly) and there is no reason to doubt the aforesaid contention of the petitioner. It is pertinent to mention that the documents which the respondent received as per tracking report at Page 23 of the paper book has not been placed on record by the respondent to controvert the allegation of the petitioner and to say that it contained different notice than what is relied upon by the petitioner - The instant petition has been filed on 01.05.2018 i.e. after the expiry of 10 days period. Therefore, the issue is decided in favour of the petitioner and against the respondent-corporate debtor. Whether there is existence of dispute between the parties? - HELD THAT - For the dishonour of the cheques the respondent-corporate debtor and its responsible persons are already facing the case in the criminal complaint under Section 138 of the Negotiable Instruments Act. The present thus, is a case in which there is no hesitation for us to hold that it is a case of non-existence of any dispute between the parties at the time the demand notice was issued The subsequent record relied upon by the respondent cannot give rise to the existence of dispute between the parties to oust the petitioner for an order of admission. Whether the petition is barred by limitation? - HELD THAT - Since on the third issue, the last payment made by the petitioner was admittedly for an amount of ₹2 lacs on 18.05.2017. the instant petition filed on 01.05.2018 is clearly within time. Thus, this issue is also held against the respondent. The application is complete in all respect - All the ingredients of sub-section 5(i) of Section 9 of the Code have been fulfilled - The instant petition is admitted - Moratorium declared.

Summary

Issues Involved:
1. Whether the petitioner served the demand notice to the respondent under Section 8 of the Code before filing the petition?
2. Whether there is an existence of dispute between the parties?
3. Whether the petition is barred by limitation?

Issue-wise Detailed Analysis:

1. Whether the petitioner served the demand notice to the respondent under Section 8 of the Code before filing the petition?

The petitioner, Mahavir Traders, filed an application in Form 5 under Rule 6(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. The demand notice was sent by Speed Post on 11.04.2018 and delivered on 12.04.2018. The respondent contested the notice, claiming it was sent by "Blue Apple Trad." and not the petitioner. However, the Tribunal found that the tracking report confirmed delivery to the respondent and dismissed the discrepancy as immaterial. The Tribunal concluded that the demand notice was properly served, and the petition was filed after the required 10-day period, thus deciding this issue in favor of the petitioner.

2. Whether there is an existence of dispute between the parties?

The respondent argued that a dispute existed over the transactions and payments, citing a settlement in 2015 and subsequent payments totaling ?28 lakhs. The respondent also claimed to have supplied yarn to the petitioner for the outstanding balance. However, the Tribunal found no evidence of any communication regarding the settlement or dispute prior to the demand notice. The post-dated cheques issued by the respondent in 2018 for ?54,39,956/- were dishonored, and the Tribunal noted the lack of explanation for issuing these cheques if the dispute had been settled in 2015. The Tribunal also questioned the authenticity of the respondent's ledger entries and invoices, noting the petitioner's evidence, including an affidavit from a driver denying the delivery of goods. The Tribunal concluded that no genuine dispute existed at the time the demand notice was issued, and the respondent's defense was not credible.

3. Whether the petition is barred by limitation?

The last payment made by the respondent was ?2 lakhs on 18.05.2017. The petition was filed on 01.05.2018, within the three-year limitation period. Therefore, the Tribunal held that the petition was not barred by limitation.

Conclusion:

The Tribunal found the petition to be complete in all respects and admitted it. The Tribunal declared a moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016, and appointed Mr. Anjum Goyal as the Interim Resolution Professional (IRP). The IRP was directed to take control of the corporate debtor's assets, manage its affairs, and comply with all relevant provisions of the Code. The Tribunal also directed the IRP to make a public announcement, constitute a committee of creditors, and submit regular progress reports to the Tribunal.

The order of moratorium will remain in effect until the completion of the corporate insolvency resolution process or until further orders. The judgment was communicated to both parties, and a copy was sent to the IRP.