2019 (9) TMI 1325 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT - Upon perusal of the ledger account of the CD in the books of account of OC, it can be seen that out of the total debt of ₹ 19,45,226/- the CD has made a payment of ₹ 1,90,000/- by means of NEFT and a balance of ₹ 15,48,206/- is still left to be paid on behalf of the CD - The Operational Creditor duly supplied the goods to the CD to its satisfaction and no dispute was raised by the CD at any point of time during the said supply. The Application/Petition stands admitted in terms of Section 9(5) of IBC, 2016 and the moratorium shall come into effect as of this date.

Summary

Issues Involved:
Initiation of Corporate Insolvency and Resolution Process (CIRP) against a Corporate Debtor for recovery of dues related to supply of goods.

Detailed Analysis:

1. Initiation of CIRP:
The Petitioner, an Operational Creditor (OC), filed a petition for the initiation of Corporate Insolvency and Resolution Process (CIRP) against the Respondent, a Corporate Debtor (CD), seeking recovery of dues amounting to ?19,45,226, including interest. The OC supplied printed labels to the CD based on purchase orders and invoices.

2. Notice and Demand:
The Respondent was served notice under Section 8 of the Insolvency and Bankruptcy Code, 2016. Despite various efforts, the notice was not served directly to the Respondent but was sent to the factory and residential address of one of the Directors of the CD. The OC also sent a fresh notice of demand to the CD as per the guidelines set by the National Company Law Appellate Tribunal.

3. Payment and Dispute:
Out of the total debt, the CD made a partial payment via NEFT. However, a significant balance remained unpaid. The OC stated that the CD did not raise any dispute regarding the goods supplied and invoices raised.

4. Acceptance of Supplies:
The OC claimed that the CD was entitled to avail CENVAT credit on excisable invoices, indicating the acceptance of supplies made by the OC. The ledger account of the CD showed partial payment and a substantial outstanding amount.

5. Admission of Petition:
After considering the circumstances and submissions, the Tribunal admitted the Petition for initiation of CIRP against the CD. The Petitioner proposed an Insolvency Professional to act as the Interim Resolution Professional (IRP) as per the prescribed format.

6. Moratorium and Effect:
Upon admission of the application, a moratorium was imposed on the CD as per Section 14(1) of the IBC, 2016. The moratorium prohibits various actions against the CD, including suits, asset disposal, and recovery proceedings. Essential supplies to the CD were to continue during the moratorium period as specified.

7. Conclusion and Communication:
The order for moratorium came into effect immediately, and copies of the order were to be communicated to all relevant parties, including the OC, CD, and the Insolvency Professional. The Registry was directed to inform the IBBI and update records with the Registrar of Companies for necessary actions.

This detailed analysis covers the key aspects of the judgment regarding the initiation of CIRP, notice and demand, payment status, acceptance of supplies, admission of the petition, imposition of moratorium, and communication of the order to relevant parties.