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2020 (5) TMI 664 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - operational debt - existence of debt and dispute or not - HELD THAT - Written communication under Form 2 reveals that there is no disciplineary proceedings pending against the proposed IRP. That being so, the operational creditor succeed sin proving that the application under sub-sec. (2) of Sec.9 of IBC ode 2016 is complete; that there is no payment of the unpaid operational debt and that there is service of demand notice with invoices. Despite receipt of the demand notice, the reis no payment on the side of the corporate debtor, no pre-existing dispute, also alleged or proved. The Ld. Counsel for the CD not raised any dispute at the time of hearing, of her than his request for time to settle the matter. There is no disciplinary proceedings pending against the RP proposed under sub-sec.(4)of Sec.9 of IB Code, 2016 and accordingly this application is complete and therefore, liable to be admitted. Application admitted - moratorium declared.
Issues Involved:
1. Default in payment of operational debt. 2. Quality or specification disputes regarding supplied materials. 3. Pre-existing disputes or pending suits. 4. Retrospective application of amended pecuniary jurisdiction. 5. Compliance with procedural requirements under the Insolvency and Bankruptcy Code (IBC), 2016. Detailed Analysis: Issue 1: Default in Payment of Operational Debt The applicant, Foseco India Limited, filed for initiation of corporate insolvency resolution process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016 due to a default in payment of ?90,00,919.10 by the corporate debtor, Om Boseco Rail Products Limited. The corporate debtor regularly purchased chemicals on a credit basis but failed to make payments for the supplied materials, as reflected in the invoices. Issue 2: Quality or Specification Disputes The corporate debtor did not raise any grievances regarding the quality or specification of the materials supplied by the operational creditor. The materials were retained and used by the corporate debtor without any disputes, as evidenced by the invoices and correspondences annexed with the application. Issue 3: Pre-existing Disputes or Pending Suits The operational creditor asserted that there were no pre-existing disputes or pending suits related to the debt. Despite receiving a demand notice on 1/8/2019, the corporate debtor did not reply or contest the debt, nor did it raise any disputes or initiate arbitration proceedings. Issue 4: Retrospective Application of Amended Pecuniary Jurisdiction The corporate debtor argued that the amendment to Section 4 of the IBC, which raised the minimum default limit to ?1 crore, should be applied retrospectively. However, the tribunal held that the amendment is prospective and does not affect applications pending for admission. The cited judgments by the corporate debtor were found not applicable to the present case. Issue 5: Compliance with Procedural Requirements The operational creditor complied with all procedural requirements under Section 9 of the IBC. An affidavit and a statement of bank account were produced, and a Resolution Professional (RP) was proposed. The tribunal found that the application was complete, there was no payment of the unpaid operational debt, and there was service of the demand notice with invoices. No pre-existing disputes were alleged or proved by the corporate debtor. Order: The application filed by the operational creditor was admitted, and a moratorium was declared under Sections 13 and 15 of the IBC, 2016. The tribunal appointed Shri Amit Choraria as the Interim Resolution Professional (IRP) and directed the operational creditor to deposit ?1,00,000 for preliminary expenses. The IRP was instructed to conduct the CIRP in a time-bound manner, and the registry was directed to communicate the order to all concerned parties. The matter was listed for filing of the progress report on 30th June, 2020.
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