2019 (8) TMI 1189 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of Corporate Insolvency Resolution Process - operational creditor - existence of dispute or not - Section 9 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - A reply to the petition has been filed by the respondent and a rejoinder has also been filed by the petitioner. The respondent- corporate debtor has pointed out certain defects in the petition and the same have been successfully controverted by the petitioner- operational creditor. Further, the respondent has submitted that complaint under Sections 138 and 139 read with Sections 141 and 142 of the Negotiable Instruments Act, 1881 is pending consideration before the Patiala House Court, New Delhi and therefore there is an existence of a dispute. The default stands established and there is no reason to deny the admission of the petition. Petition admitted - moratorium declared.

Summary

Issues:
1. Petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 for Corporate Insolvency Resolution Process.
2. Claim of operational creditor against the corporate debtor for unpaid invoices.
3. Existence of a dispute raised by the respondent-corporate debtor.
4. Appointment of an Insolvency Resolution Professional.
5. Declaration of moratorium under Section 14 of the Code.
6. Direction for public announcement and deposit by the Operational Creditor.
7. Requirement for ex-management to provide documents and information.
8. Concerns regarding claims made by financial creditors.

Issue 1: Petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 for Corporate Insolvency Resolution Process:
The Petitioner, an operational creditor, filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process against the respondent, Cargo Planners Limited, for unpaid invoices amounting to ?1,72,597. The Petitioner provided evidence of the debt through invoices, bank statements, and a demand notice served to the respondent.

Issue 2: Claim of operational creditor against the corporate debtor for unpaid invoices:
The Petitioner claimed that the respondent owed them for AIR Freight Services rendered between December 2017 and January 2018. The total amount in default, inclusive of interest, was specified in the petition. The Petitioner submitted all relevant documents supporting the claim, including invoices, bank statements, and a certificate from the statutory auditor confirming non-payment.

Issue 3: Existence of a dispute raised by the respondent-corporate debtor:
The respondent-corporate debtor contended the existence of a dispute, citing a pending case under the Negotiable Instruments Act. However, the Petitioner argued against the existence of a dispute, referring to a previous appellate tribunal order that clarified the pendency of a case under the Act as an admission of debt, not a dispute. The Tribunal found the default established and admitted the petition.

Issue 4: Appointment of an Insolvency Resolution Professional:
The Tribunal accepted the appointment of Mr. Ashok Kumar Juneja as the Interim Resolution Professional for the Corporate Debtor. The Petitioner proposed Mr. Juneja's name, providing all necessary details and certifications as per the insolvency rules.

Issue 5: Declaration of moratorium under Section 14 of the Code:
A moratorium was declared in accordance with Section 14 of the Code, with exceptions specified for certain transactions and essential supplies to the Corporate Debtor. The Tribunal ensured that essential services like water and electricity supply were not disrupted during the moratorium period.

Issue 6: Direction for public announcement and deposit by the Operational Creditor:
The Tribunal directed the Interim Insolvency Resolution Professional to make a public announcement regarding the admission of the application within three days. Additionally, the Operational Creditor was instructed to deposit a specified sum with the Interim Resolution Professional to cover expenses related to the resolution process.

Issue 7: Requirement for ex-management to provide documents and information:
The ex-management was directed to provide all relevant documents and information to the Interim Resolution Professional within a week of the petition's admission. Failure to comply would result in coercive measures.

Issue 8: Concerns regarding claims made by financial creditors:
The Tribunal acknowledged concerns raised against financial creditors regarding the accuracy and fairness of claims, particularly related to interest rates and penalties. It emphasized the role of Resolution Professionals in addressing such issues to prevent injustice to the corporate debtor.

This detailed analysis covers the key issues addressed in the judgment, providing a comprehensive overview of the Tribunal's decision and the legal implications involved in the case.