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2020 (2) TMI 1591 - 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 - HELD THAT - Corporate Debtor has not succeeded in establishing any pre-existing disputes. It can be legitimately inferred that it is why the Ld. Counsel did not address any argument attempting to prove a pre existing dispute other than a challenge that the corporate debtor is not liable for the interest as claimed by the operational creditor for want of agreement to pay interest. The application is otherwise complete meeting all the requirement to be meted out under section 9 (2) of the Code. The affidavits under section 9(3)(b) of the Code and statement of bank account proving non-payment of unpaid Operational debt as required under Section 9(3)(c) of the Code seen produced on the side of the operational creditor. The application filed by the Operational Creditor under section 9 of the Insolvency Bankruptcy Code, 2016 for initiating Corporate Insolvency Resolution Process against the Corporate Debtor, West Bengal Biotech Development Limited is hereby admitted - Moratorium declared.
Issues Involved:
1. Maintainability of the application under Section 9 of the Insolvency and Bankruptcy Code, 2016. 2. Existence of a debt and default by the Corporate Debtor. 3. Limitation period and whether the claim is barred by limitation. 4. Admission of the application and initiation of Corporate Insolvency Resolution Process (CIRP). Detailed Analysis: 1. Maintainability of the Application: The Operational Creditor filed the application under Section 9 of the Insolvency and Bankruptcy Code, 2016, alleging default in payment of operational debt amounting to ?87,48,130. The Corporate Debtor contended that the application was not maintainable, citing disputed issues and alleged fabrication of documents. The Tribunal, however, found that the application met all requirements under Section 9(2) of the Code, including the affidavits under Section 9(3)(b) and the statement of bank account proving non-payment of the operational debt under Section 9(3)(c). 2. Existence of Debt and Default: The Operational Creditor was engaged for interior decoration work under a work order dated 22/02/2011 and raised bills amounting to ?35,44,776 on 11/02/2012. Despite several reminders and partial payments, the outstanding amount remained unpaid. The Corporate Debtor admitted to the work order but disputed the completion and quality of work, alleging that the work was contrary to the plan and incomplete. The Tribunal found that the Corporate Debtor failed to establish any pre-existing disputes and acknowledged the debt through a letter dated 14/12/2017, requesting a meeting for settlement. 3. Limitation Period: The Corporate Debtor argued that the claim was barred by limitation as the bills were dated 11/02/2012 and the application was filed on 26/10/2018. The Tribunal examined the repeated demands made by the Operational Creditor from 28/05/2012 to 07/06/2016 and the reply from the Corporate Debtor dated 14/12/2017, which was considered a promise to pay under Section 25(3) of the Indian Contract Act. The Tribunal referred to a similar judgment by the Hon’ble High Court of Mumbai, concluding that the letter amounted to a promise to pay a time-barred debt, thus making the application within the limitation period. 4. Admission of the Application and Initiation of CIRP: The Tribunal admitted the application, declaring a moratorium under Sections 13 and 15 of the IBC, 2016, prohibiting the institution of suits, transferring assets, and other actions against the Corporate Debtor. Mr. Shashi Agarwal was appointed as the Interim Resolution Professional (IRP) to conduct the CIRP. The Operational Creditor was directed to deposit ?2,00,000 in an Escrow Account for preliminary expenses. The Tribunal ordered the Registry to communicate the order to all concerned parties and listed the matter for the filing of the progress report on 28.02.2020. Orders: 1. Application admitted under Section 9 of the IBC, 2016. 2. Declaration of moratorium and public announcement. 3. Appointment of Mr. Shashi Agarwal as IRP. 4. Deposit of ?2,00,000 by the Operational Creditor for CIRP expenses. 5. Direction to Registry for communication of the order. 6. Listing of the matter on 28.02.2020 for the progress report.
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