2019 (11) TMI 1564 - Tri - Insolvency and Bankruptcy

Permission for withdrawal of petition - Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT - Since the Petition is not admitted, and the party wanted to withdraw it and the petition cannot be taken judicial notice unless notice served on the other side, we are inclined to permit the Applicant to withdraw the petition by reserving liberty to file fresh Company petition, in accordance with law. Petition is disposed of as withdrawn.

Summary

Issues:
- Petition filed under Section 9 of the IBC, 2016 by Operational Creditor against Corporate Debtor for default in payment.
- Failure of the Operational Creditor to serve notice on the Respondent.
- Request to withdraw the petition with liberty to file a fresh Company petition.

Analysis:
The case involved C.P.(IB)No.256/BB/2019 filed by the Operational Creditor against the Corporate Debtor under Section 9 of the Insolvency and Bankruptcy Code, 2016, citing a default amount of ?7,78,527, including interest. The Operational Creditor, a proprietorship firm, supplied Air-conditioning spare parts to the Corporate Debtor, a private limited company, from December 2015 to December 2016. Despite reminders and dishonored cheques, the outstanding amount remained unpaid, leading to the issuance of a Statutory Demand Notice on 13th April, 2019, as per Section 8 of the Code. The Operational Creditor had complied with all mandatory provisions of Section 9(3)(a), (b), and (c) of the IBC, 2016, before filing the petition.

During the proceedings, the Learned Counsel for the Petitioner expressed inability to serve notice on the Respondent despite efforts. Consequently, the Petitioner sought permission to withdraw the petition with the liberty to file a fresh Company petition in the future. As the petition was not admitted and judicial notice couldn't be taken without serving notice on the other party, the Tribunal allowed the withdrawal of the petition with the liberty to file a new Company petition following the legal procedures. The case, C.P. No. 256/BB/2019, was disposed of as withdrawn, with no order as to costs.

This judgment highlights the procedural aspects of filing a petition under the IBC, 2016, the importance of serving notice on the Respondent, and the Tribunal's discretion to permit the withdrawal of a petition with liberty to file a fresh petition. The case underscores the significance of adhering to legal requirements and due process in insolvency proceedings to ensure fair treatment of parties involved.