2020 (2) TMI 1621 - AT - Insolvency and Bankruptcy

Maintainability 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 - The Adjudicating Authority concluded that in the factual document, there was existence of real dispute which could not be overruled and was of the view that there was substance and plausible contention in pleadings of both sides which require investigation. The Impugned Order shows that with the limited jurisdiction to examine the claim and defence, the Adjudicating Authority concluded that there was dispute as defined in Section 5(6) of the Code and rejected the Application. On going through the claims being made by the Appellant and claims being made by the Respondents and it appears also that the averments and counter averments required trial which is not possible in the jurisdiction of Section 9 of IBC. Whether or not similar stamp of the Company was being used by the Appellant, which is seen in the debit notes, would be matter of evidence. There has to be prima facie material to doubt a document as forged or fabricated if the same is to be ignored. It is stated that after the Impugned Order was passed, with observations as seen above in para 33 of the Impugned Order, subsequently, the Appellant has filed FIR. It would naturally take its own course. The Impugned Order need not be interfered. Considering the limited sphere in which Adjudicating Authority and this Tribunal operate, when we sit down to consider the admitting or otherwise of an Application under Section 7, 9 or 10 of IBC, if we admit or reject the Application on the basis of a document put on record by the opposite side, the aggrieved party has option to move appropriate civil and/or criminal forums and in case it is established in any appropriate proceeding that the document was falsified, forged or fabricated, it will be, inter alia, open for the aggrieved party to move for action under Part II Chapter VII of IBC which deals with Offences and Penalties. Appeal disposed off.

Summary

Issues Involved:
- Rejection of application under Section 9 of the Insolvency and Bankruptcy Code, 2016 by the Adjudicating Authority.
- Dispute regarding outstanding dues between the Operational Creditor and the Corporate Debtor.
- Allegations of forged and fabricated documents by both parties.
- Examination of the real dispute and the jurisdiction of the Adjudicating Authority.

Detailed Analysis:

Issue 1: Rejection of Application under Section 9 of IBC
The Appellant, an Operational Creditor, filed an application under Section 9 of the IBC against the Corporate Debtor, which was rejected by the Adjudicating Authority. The rejection was based on the existence of a real dispute between the parties, as observed by the Adjudicating Authority. The Appellant claimed outstanding dues based on invoices and non-supply of 'C' Forms, while the Respondent disputed the claim, citing the issuance and acceptance of debit notes that covered the alleged debt.

Issue 2: Dispute Regarding Outstanding Dues
The Appellant alleged non-payment of dues by the Respondent for goods supplied, while the Respondent contended that the debt was discharged through debit notes issued in 2015 and 2016. The Respondent claimed that the Appellant had acknowledged and accepted these debit notes, which were presented as evidence of the extinguishment of the debt. The Adjudicating Authority noted the conflicting claims and the need for a detailed investigation to resolve the dispute.

Issue 3: Allegations of Forged and Fabricated Documents
Both parties accused each other of presenting forged and fabricated documents to support their claims. The Appellant alleged that the debit notes provided by the Respondent were forged, while the Respondent maintained that the Appellant had accepted and acknowledged these notes. The Adjudicating Authority emphasized the need for evidence and proper investigation to determine the authenticity of the documents in question.

Issue 4: Examination of Real Dispute and Jurisdiction
The Adjudicating Authority concluded that there was a pre-existing dispute between the parties, which required a thorough investigation beyond the scope of Section 9 of the IBC. The Authority highlighted the complexity of the claims and counterclaims, indicating the necessity for a detailed trial to ascertain the veracity of the allegations. The Tribunal upheld the decision of the Adjudicating Authority, emphasizing the limited jurisdiction in insolvency proceedings and the option for parties to seek appropriate remedies in civil or criminal forums.

In conclusion, the judgment delves into the intricacies of the dispute between the Operational Creditor and the Corporate Debtor, highlighting the challenges in determining the existence of a genuine dispute and the limitations of insolvency proceedings in resolving complex legal issues.