2019 (11) TMI 1663 - AT - Companies Law

CIRP in process - dispute with regard to quantum of the payment - amount involved in the claim - HELD THAT - From the provisions established in M/S. INNOVENTIVE INDUSTRIES LTD. VERSUS ICICI BANK ANR. 2017 (9) TMI 58 - SUPREME COURT it will be evident that even if the amount is disputed if the claim is more than Rupees One Lakh the Corporate Insolvency Resolution Process can be initiated. The impugned order passed by Adjudicating Authority need not be interfered. However the Appellant is allowed to settle the claim with all the claimants in terms of Section 12A of the I B Code if the Appellant so chooses - appeal disposed off.

Summary

Issues:
1. Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 for initiation of Corporate Insolvency Resolution Process.
2. Dispute regarding quantum of payment but not the service rendered by the Operational Creditor.
3. Interpretation of the Code regarding default triggering insolvency resolution process.
4. Initiation of Corporate Insolvency Resolution Process even if the amount is disputed.
5. Settlement of claim with Respondent and constitution of Committee of Creditors.
6. Applicability of Section 12A of the I&B Code for settling claims.
7. Direction for handing over assets and records of the Corporate Debtor to the Interim Resolution Professional.
8. Potential consequences for non-compliance with directions.

Analysis:
1. The Respondent filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking the initiation of Corporate Insolvency Resolution Process against the Corporate Debtor, which was admitted by the Adjudicating Authority. The Appellant raised a pre-existing dispute regarding the quantum of payment but acknowledged the service rendered by the Operational Creditor.

2. The interpretation of the Code, as highlighted in the case of "Innoventive Industries Ltd. Vs. ICICI Bank and Ors.," emphasizes that the insolvency resolution process begins upon default, defined as non-payment of a debt once it becomes due and payable. The Code distinguishes between debts owed to financial creditors and operational creditors, with the trigger amount set at one lakh rupees.

3. Despite the dispute over the amount, the judgment clarifies that the Corporate Insolvency Resolution Process can be initiated if the claim exceeds one lakh rupees. The Appellant expressed a desire to settle the claim with the Respondent, while the Interim Resolution Professional confirmed the receipt of the claim and the pending constitution of the Committee of Creditors, including a Financial Creditor with a claim of ?9 Crore.

4. The judgment refrains from interfering with the impugned order passed by the Adjudicating Authority, allowing the Appellant the option to settle the claim with all claimants under Section 12A of the I&B Code. Furthermore, the Appellant and other Promoters are directed to promptly hand over all assets and records of the Corporate Debtor to the Interim Resolution Professional, with potential consequences outlined for non-compliance, including the initiation of Contempt Proceedings by the Appellate Tribunal.

5. In conclusion, the appeal is disposed of with the aforementioned directions, and no costs are awarded in this matter.