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2019 (8) TMI 1745 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - prove of delivery of the goods as per the invoices under dispute or not - HELD THAT - The attempt of the CD in the case in hand, if taken as a whole, it is understood that the CD is attempting to prove inconsistent contentions. The CD miserably failed to prove both the contentions. In the above said background if I test the correctness of the reconciliation letter allegedly issued by the CD, there are no materials to hold that it is a manufactured document as alleged. If it was manufactured in a letterhead of the CD it invites criminal prosecution against the alleged maker. No complaint so far seen filed by the CD before any authorities to book them for fastening criminal liability. Such an attempt was not taken from the side of the CD even if the copy of the said letter was received by the CD before 7th April, 2018. The overall attempt on the side of the CD is to prove its case without supporting evidence. The contention on the side of the CD that the reconciliation account is a fabricated one, cannot be upheld - It is a circumstance proving the case of the OC that the debt as claimed by the OC is payable by the CD. The OC has succeeded in proving delivery of goods and CD has failed in proving per-existence of a dispute as alleged. Accordingly, the next question requires for consideration is whether the OC complied all the requirements to initiate the CIRP as against the CD. The application filed being found complete and that a certificate in compliance of Section 9(3)(c) and affidavit in compliance Section 9(3)(b) being produced and since no name of an Interim Resolution Professional is proposed in compliance of requirement to be met out as per Section 9(3)(e) the application is found complete. The dispute raised by the CD is found unsustainable under law. The operational debt as claimed by the OC is found payable by the CD. Petition admitted - moratorium declared.
Issues Involved:
1. Whether the Operational Creditor (OC) succeeded in proving delivery of the goods as per the invoices under dispute. 2. Whether the Corporate Debtor (CD) succeeded in proving pre-existing dispute as per Section 5(6) of the Insolvency and Bankruptcy Code (I&B Code). 3. Relief and cost. Issue-Wise Detailed Analysis: 1. Proving Delivery of Goods: The OC claimed that goods were delivered to the CD as per the invoices and provided supporting documents such as transport challans and way bills. The CD contended that the goods were never supplied and that the invoices did not bear their stamp or signatures. However, the tribunal found that the OC had complied with all requirements under Section 8 of the I&B Code and Rule 5 of the Adjudicating Authority Rules. The tribunal noted that the transport challans and way bills, some bearing the CD's stamp, sufficiently proved the delivery of goods. The CD's argument that the documents were not stamped or signed was deemed unconvincing. Additionally, the tribunal observed that the CD's inconsistent contentions further weakened their case. 2. Proving Pre-Existing Dispute: The CD argued that the goods were sub-standard and unusable, and that there was a pre-existing dispute. However, the tribunal found no evidence that the CD had raised any dispute before receiving the demand notice. The contention of defective goods was raised only in the reply notice and was considered an afterthought to stage-manage evidence. The tribunal also noted that the CD's claim of a fabricated reconciliation letter was unsupported by any complaint or evidence. The tribunal concluded that the CD failed to prove a pre-existing dispute and that the dispute raised was frivolous and ill-motivated to avoid repayment. 3. Relief and Cost: The tribunal found that the OC had complied with all requirements to initiate the Corporate Insolvency Resolution Process (CIRP) and that the application was complete. The operational debt claimed by the OC was found payable by the CD, who had not paid despite receiving the demand notice. Consequently, the tribunal admitted the petition under Section 9 of the I&B Code and declared a moratorium in accordance with Sections 13 and 15 of the I&B Code. The tribunal appointed an Interim Resolution Professional (IRP) and directed the OC to deposit a sum of ?3 lakh for meeting the IRP fees and cost. The registry was directed to communicate the order to all concerned parties. Orders: 1. The petition filed by the OC under Section 9 of the I&B Code is admitted for initiating CIRP against the CD. 2. A moratorium is declared in accordance with Sections 13 and 15 of the I&B Code. 3. The IRP is appointed to conduct the CIRP as per the prescribed timeline. 4. The OC is directed to deposit ?3 lakh for IRP fees and cost. 5. The registry is directed to communicate the order to all concerned parties by Speed Post and e-mail. 6. The matter is listed for filing a progress report on 20/09/2019. 7. Certified copies of the order may be issued to all concerned parties upon compliance with requisite formalities.
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