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2019 (11) TMI 964 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment - existence of debt and dispute or not - HELD THAT - The Corporate Debtor has acknowledged the debts through Confirmation of Accounts and also it is seen that the Corporate Debtor has admitted in its Balance Sheet dated 31.03.2015, that ₹ 112,93,542/- is due from the Applicant. The corporate debtor has not produced evidence that the Corporate Debtor has objected/disputed the debit notes or its contents prior to the receipt of section 8 notice. The defence of raising a dispute is lame and without any supporting evidence and can be categorised as moonshine dispute. The present application is complete and the Applicant is entitled to claim its dues, establishing the default in payment of the operational debt beyond reasonable doubt - application admitted - moratorium declared.
Issues Involved:
1. Whether the Application is within the Law of Limitation? 2. Whether there has been payment of the unpaid operational debt? 3. Whether the dispute as raised by the corporate debtor is genuine or can be categorized as a moonshine dispute? Issue-wise Detailed Analysis: 1. Whether the Application is within the Law of Limitation? The Corporate Debtor raised a preliminary objection of limitation, arguing that the debit notes fell due on 01.04.2013 and the confirmations of accounts were unauthorized. However, the Tribunal examined Section 18(1) of the Limitation Act, 1963, which provides that an acknowledgment of liability in writing before the expiration of the prescribed period resets the limitation period. The Tribunal found that the Corporate Debtor had acknowledged the debt through Confirmation of Accounts letters dated 01.04.2015, 01.04.2016, 01.04.2017, and 01.04.2018, which bore the stamp and signatures of authorized signatories. Thus, the Tribunal concluded that the Application was within the Law of Limitation. 2. Whether there has been payment of the unpaid operational debt? The Tribunal noted that the Applicant was not a party to the Settlement Agreement dated 24.08.2018, and no proof of payment to the Applicant was submitted by the Corporate Debtor. The Tribunal also observed that previous applications dismissed as withdrawn were filed by Mr. Sanjay Bagrodia and not by the Applicant, and the subject matter of those applications was unrelated to the present case. Consequently, the Tribunal determined that there had been no payment of the unpaid operational debt. 3. Whether the dispute as raised by the corporate debtor is genuine or can be categorized as a moonshine dispute? Section 5(6) of the Insolvency and Bankruptcy Code, 2016, defines "dispute" and includes issues such as the existence of the debt, quality of goods or services, or breach of representation or warranty. The Tribunal found that the Corporate Debtor had acknowledged the debt through Confirmation of Accounts and admitted the debt in its Balance Sheet dated 31.03.2015. The Corporate Debtor did not produce evidence of disputing the debit notes before receiving the Section 8 notice. The Tribunal categorized the dispute raised by the Corporate Debtor as a moonshine dispute, lacking supporting evidence. Conclusion: The Tribunal admitted the application, concluding that the Applicant was entitled to claim its dues, establishing the default in payment of the operational debt beyond reasonable doubt. The Tribunal appointed Mr. Jai Narayan Khandelwal as the Interim Resolution Professional (IRP) and invoked a moratorium as per Section 14 of the IBC, 2016. The IRP was directed to carry out the Corporate Insolvency Resolution Process (CIRP) in compliance with the provisions of IBC, 2016. The Operational Creditor was instructed to deposit a sum of ?2,00,000 to defray the IRP's expenses and fees. The Tribunal ordered the communication of this order to the relevant parties and the Insolvency and Bankruptcy Board of India (IBBI).
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