2018 (5) TMI 1990 - Tri - Insolvency and Bankruptcy

Operational Debt - default due - the Operational Creditor, after issuance of Demand Notice, has filed this Petition/Application, claiming outstanding amount of Debt, under provisions of the Code - HELD THAT - It was duly served upon the debtor but the Debtor has not given reply to the Demand Notice u/s 8 within the time limit provided by the Act. However, the Debtor has filed the reply to this Petition/Application raising the question of Dispute - in this case the question of Dispute does not arises for the reasons viz. i) from the begining the Debtor has never said that the Fees of the Operational Creditor is not due, however there are number of occasions where the Debtor has itself acknowledged his liability; ii) he has not raised the question of dispute at the time of issuance of Demand Notice. The Debtor has filed reply to this Petition/ Application to delay the proceedings. Thus, the Operational Creditor has rendered his professional services to the Debtor and raised valid invoices for the same but the Debtor has failed to make the payment. Hence, the Debt demanded is in the nature of Operational Debt as defined under section 5 (21) of the Definitions under The Code. And there is a Default as defined under section 3 (12) of The Code on the part of the Corporate Debtor - as the Operational Creditor had not received the outstanding Debt from the Debtor and that the formalities as prescribed under The Code have been completed by the Petitioner/Applicant, it is my conscientious view that this Petition deserves 'Admission'. Petition admitted.

Summary

Issues:
1. Claim of operational debt under the Insolvency and Bankruptcy Code.
2. Dispute regarding payment of professional fees.
3. Validity of demand notice and response by the debtor.
4. Appointment of an Insolvency Resolution Professional and initiation of the insolvency resolution process.

Claim of Operational Debt:
The petitioner, an operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code claiming an outstanding amount of ?1,16,41,500 from the debtor, a construction and development company. The petitioner provided professional services to the debtor, raised invoices, and issued a demand notice after non-payment.

Dispute Regarding Payment of Professional Fees:
The debtor argued that the claimed amount was in dispute as the contract with Tata Housing Development Corporation Limited (THDCL) was revoked, leading to the project's failure. The debtor contended that the petitioner was only entitled to fees upon successful completion of the agreement with THDCL, which did not occur due to THDCL's withdrawal.

Validity of Demand Notice and Response:
The tribunal reviewed the submissions and emails exchanged between the parties. It noted that the debtor had acknowledged the petitioner's fees on multiple occasions, and the demand notice was duly served. The debtor's argument of dispute was dismissed as it had not raised the issue earlier and appeared to delay proceedings.

Appointment of an Insolvency Resolution Professional:
After finding merit in the petitioner's claim and deeming the debt as operational under the Code, the tribunal admitted the application. An Insolvency Resolution Professional was appointed to conduct the insolvency resolution process, initiating a moratorium on legal actions against the debtor. The IRP was directed to provide progress reports and comply with the Code's provisions.

This detailed analysis of the judgment covers the issues involved and the tribunal's findings on each aspect of the case, including the claim of operational debt, dispute over professional fees, validity of the demand notice, and the subsequent appointment of an Insolvency Resolution Professional for the insolvency resolution process.