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2020 (5) TMI 681 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - time limitation - existence of debt and dispute or not - HELD THAT - The Petition has been filed on 30.07.2018 for unpaid operational debt due and defaulted of INR.21,57,700.38 with interest accrued thereon at the rate of 30% per annum from the respective due date of each invoice - Date of default is 10.11.2016 as per the agreed terms of payment after 07 days and they approached to the Corporate Debtor, Honest Derivatives Private Limited for payments many a times but they found that he was not intend to pay - Application is filed within the limitation period as the date of default 10.11.2016, whereas the date of filing this petition under Section 9 of IBC is 30.07.2018. Respondent is a Company registered under the Companies Act and it is a Corporate Debtor within the meaning of sub-section (8) of Section 3 of the 1B Code. No pre-existing dispute before issuing of Demand Notice is observed. Defence taken by the Respondent is not tenable. The Respondent has taken defence of existing dispute prior to the issue of Demand Notice by the Petitioner on 03.02.2018 but the fact is that the Respondent has filed Suit on 26.03.2018 against the Applicant i.e. after receipt of Demand Notice inter alia seeking damages and losses suffered under the said PO by the Respondent - the Respondent also filed a Suit on 15.03.2018 against Rawalwasia an associate concern in respect of the breaches and losses suffered by the Respondent under the HSS Agreement by the Respondent beari g Civil Suit No.36 of 2018 before the Honble Civil Judge Senior Division Jalgaon at Jalgaon. Hence, it is not considered as dispute. The other suit has been filed against the Associate Company of the Petitioner for violation of HSS agreement but it does not relate in any way to the Petitioner's claim against the Respondent. Hence, this defence is not entertained. The application is complete and is admitted - moratorium declared.
Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP) 2. Existence of Debt and Default 3. Pre-existing Dispute 4. Limitation Period 5. Appointment of Interim Resolution Professional (IRP) 6. Declaration of Moratorium Issue-wise Detailed Analysis: 1. Initiation of Corporate Insolvency Resolution Process (CIRP): The petition was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 for initiation of CIRP against the Corporate Debtor, Honest Derivatives Private Limited, for the unpaid Operational Debt due. 2. Existence of Debt and Default: The Petitioner, Solartex India Private Limited, claimed that the Corporate Debtor owed INR 21,57,700.38 along with interest at the rate of 30% p.a. from the due date of each invoice till the date of actual payment. The debt arose from a purchase order for 500MT of Indonesian Coal, which was supplied but not paid for by the Corporate Debtor. The date of default was determined as 10.11.2016. 3. Pre-existing Dispute: The Corporate Debtor argued that there was a pre-existing dispute, citing a reply notice denying the debt and claiming losses of INR 4,44,17,608.00. However, the Tribunal found that the disputes raised were spurious, hypothetical, and illusory, as they were related to an associate concern of the Operational Creditor, not the Operational Creditor itself. The Tribunal noted that the Corporate Debtor's suits were filed after the receipt of the Demand Notice, thus not qualifying as pre-existing disputes. 4. Limitation Period: The Tribunal confirmed that the application was filed within the limitation period. The date of default was 10.11.2016, and the petition was filed on 30.07.2018, which is within the three-year limitation period. 5. Appointment of Interim Resolution Professional (IRP): The Tribunal appointed Shri Kailash T. Shah as the Interim Resolution Professional (IRP) with instructions to file a declaration disclosure statement within two days and make a public announcement of the moratorium. The IRP was directed to follow the provisions of Sections 13 and 14 of the IBC and perform duties as per Sections 15, 17, 18, 19, 20, and 21 of the Code. 6. Declaration of Moratorium: The Tribunal declared a moratorium prohibiting: - The institution or continuation of suits or proceedings against the Corporate Debtor. - Transferring, encumbering, or disposing of any assets of the Corporate Debtor. - Actions to foreclose, recover, or enforce any security interest created by the Corporate Debtor. - Recovery of property by an owner or lessor where such property is occupied by the Corporate Debtor. The moratorium will remain effective until the completion of the CIRP. Order: The Tribunal admitted the petition on 28.05.2020, finding the petition complete for the initiation of CIRP against the Corporate Debtor. The Tribunal directed the IRP to proceed as per the IBC provisions and maintain the moratorium. An authenticated copy of the order was to be communicated to the Operational Creditor, Corporate Debtor, IRP, and the Registrar of Companies.
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