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2019 (12) TMI 1582 - 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 - From the records it is noticed that the Corporate Debtor has not submitted any proof to substantiate its claim that the dispute is pre-existing in accordance with the provisions of IBC 2016 - Further there is no record to substantiate/justify the counter claim made by the Corporate Debtor for an amount of ₹ 23,97,616/- as claimed by Corporate Debtor. Further the said quantum of amount has also not been adjudicated by any relevant Authority. The application made by the Operational Creditor is complete in all respects as required by law. The Corporate Debtor is in default of a debt due and payable, and the default is in excess of minimum amount of one lakh rupees stipulated under section 4(1) of the IBC. Therefore, the default stands established and there is no reason to deny the admission of the Petition. In view of this, this Adjudicating Authority admits this Petition and orders initiation of CIRP against the Corporate Debtor. Petition admitted - moratorium declared.
Issues:
1. Initiation of Corporate Insolvency Resolution Process under section 9 of the Insolvency & Bankruptcy Code, 2016. 2. Dispute regarding non-payment of a debt by the Corporate Debtor. 3. Validity of the Demand Notice served by the Operational Creditor. 4. Counter-claims raised by the Corporate Debtor. 5. Appointment of Interim Resolution Professional and initiation of CIRP. Issue 1: Initiation of Corporate Insolvency Resolution Process under section 9 of the Insolvency & Bankruptcy Code, 2016: The Operational Creditor, a Public Limited Company, filed a Company Petition seeking to initiate Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, a public company, for non-payment of a debt amounting to ?34,11,111/- along with interest at 18% per annum. The petition was admitted by the Adjudicating Authority as the default was established, and the minimum debt amount criteria under section 4(1) of the IBC was met. Issue 2: Dispute regarding non-payment of a debt by the Corporate Debtor: The Operational Creditor claimed that the Corporate Debtor failed to make payment for the supplies made as per purchase orders, and invoices were raised accordingly. The Corporate Debtor, in its defense, alleged that the Operational Creditor supplied inferior quality raw materials causing losses, and counter-claimed for an amount of ?23,97,616/-. However, the Corporate Debtor failed to provide proof of the pre-existing dispute or substantiate the counter-claim, leading to the admission of the petition. Issue 3: Validity of the Demand Notice served by the Operational Creditor: The Operational Creditor served a Demand Notice in Form 3 by Speed Post, which was received by the Corporate Debtor. The Corporate Debtor contended that the undated Demand Notice was not maintainable under the IBC due to counter-claims. However, the Adjudicating Authority found no proof of a pre-existing dispute and admitted the petition based on the established default. Issue 4: Counter-claims raised by the Corporate Debtor: The Corporate Debtor raised counter-claims related to delays in delivery, inferior quality, and short supplies of raw materials. These counter-claims were not substantiated with evidence, and the Adjudicating Authority found no justification for the counter-claim amount of ?23,97,616/-. As a result, the petition for CIRP was admitted. Issue 5: Appointment of Interim Resolution Professional and initiation of CIRP: The Operational Creditor proposed the appointment of an Interim Resolution Professional (IRP) for the Corporate Debtor. The Adjudicating Authority appointed the proposed IRP and ordered the initiation of CIRP against the Corporate Debtor. The management of the Corporate Debtor vested in the IRP during the CIRP period, and necessary steps were taken to facilitate the resolution process. This detailed analysis of the judgment covers the issues involved, the arguments presented by both parties, and the decision rendered by the Adjudicating Authority regarding the initiation of Corporate Insolvency Resolution Process against the Corporate Debtor.
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