2019 (12) TMI 1376 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of uts debt - existence of debt and dispuyte or not - HELD THAT - It is a fact that as to claim amount is concerned, differences are in existence in between the parties and it is also evident on record that the Operational Creditor terminated rendering services to the Corporate Debtor before completion of the tenure of their agreement, whereby unless it is finally determined and agreed between the parties as to how much is to be paid to the Operational Creditor by the Corporate Debtor, it cannot be called as, the Applicant has proved the existence of debt and existence of default between the parties. It is not the case of either of them, questioning veracity of the correspondence passed between the parties. By looking at the entire correspondence in totality, it is clear that the claim amount raised by the Operational Creditor has been disputed which is falling within the compass of definition u/s.5(6)(a) with regard to the existence of amount on debt as well as with regard to the services rendered by the Operational Creditor because in the Corporate Debtor correspondence, it has been mentioned that because of frequent tripping, the Corporate Debtor was forced to take services from the TANGEDCO at higher price and also mentioned that supply of services by the Operational Creditor were terminated before completion of tenure as agreed between the parties and also assessed some amount to be deducted from the claim of the Operational Creditor towards stoppage as well as tripping, therefore, we cannot hold that the claim mentioned by the Operational Creditor is devoid of existence of dispute between the parties. The Corporate Debtor having already raised issues with regard to not only on the notices returned but also on the claim amount - this Petitioner claim is hit by existence of dispute - petition dismissed.

Summary

Issues:
Insolvency and Bankruptcy Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 - Dispute regarding claim amount and services between Operational Creditor and Corporate Debtor.

Analysis:
The judgment by the National Company Law Tribunal Division Bench in Chennai involved an Insolvency and Bankruptcy Application (IBA) filed by an Operational Creditor against a Corporate Debtor for defaulting on a significant amount. The Operational Creditor claimed a total outstanding amount of ?1,17,65,461 as of a specific date. The core issue revolved around the dispute between the parties concerning the claim amount and services provided. The Corporate Debtor contended that there were correspondences indicating a dispute, including emails from November and December 2018 highlighting discrepancies in outstanding amounts and services rendered.

The Operational Creditor argued that despite the disputes raised by the Corporate Debtor, the claim amount should not be affected as the Corporate Debtor had confirmed payment as per schedule. However, the Corporate Debtor maintained that their statements were based on the Accounts Department's inputs, and the final figure would be determined after discussions. The Tribunal scrutinized the correspondence between the parties and found discrepancies in the claim amount and services provided. It was noted that the Operational Creditor had terminated services before the agreement's completion, leading to a lack of agreement on the payment amount.

The Tribunal emphasized that the claim amount raised by the Operational Creditor was disputed, falling within the definition under Section 5(6)(a) of the Insolvency and Bankruptcy Code. The judgment referenced a case law to support the inclusive definition of a dispute, highlighting that real disputes on payment exist between parties. Ultimately, the Tribunal dismissed the Insolvency and Bankruptcy Application, citing the existence of a dispute between the parties regarding the claim amount and services provided. The judgment underscored that the Petitioner's claim was dismissed as misconceived due to the presence of a dispute.

In conclusion, the detailed analysis of the judgment highlighted the intricacies of the dispute between the Operational Creditor and the Corporate Debtor regarding the claim amount and services provided, leading to the dismissal of the Insolvency and Bankruptcy Application based on the existence of a genuine dispute between the parties.