2020 (7) TMI 557 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and default or not - Jurisdiction of Tribunal to entertain the appeal - time limitation - HELD THAT - The last invoice was issued on January 11, 2011. Thereafter, on July 20, 2015 and August 3, 2016, the respondent had admitted the past dues, which were beyond the threshold of limitation. but stated that the respondent was making every effort to effect payment of the relevant amount. Subsequently, both parties had executed a memorandum of understanding on August 16, 2018, whereby the respondent had agreed to make payment within 6 months, i. e., by February 15, 2019. Thus, in view of the section 25(3) of the Indian Contract Act, 1872 which overshadowed section 18 of the Limitation Act, 1963, the matter is within the purview of the law of limitation under article 137 thereof. It is evident from the ledger statement filed by the applicant/operational creditor annexed with the application, that the payment of claim amount of ₹ 1,20,78,456.34 has been defaulted by the respondent/corporate debtor and has been agreed as due and payable. The registered office of the corporate debtor is situated in Jaipur and therefore, this Tribunal has jurisdiction to entertain and adjudicate this application - Hence, this Tribunal is of the view that it is a fit case to initiate the corporate insolvency resolution process (CIRP) against the respondent/corporate debtor as envisaged under the provisions of the Insolvency and Bankruptcy Code, 2016. Application admitted - RP appointed - moratorium declared.

Issues:
1. Application filed under section 9 of the Insolvency and Bankruptcy Code, 2016 for initiation of the corporate insolvency resolution process.
2. Claim of operational debt against the respondent for non-payment of outstanding amount.
3. Jurisdiction of the Tribunal to entertain and adjudicate the application.

Issue 1: Application under IBC for CIRP
The application was filed under section 9 of the Insolvency and Bankruptcy Code, 2016 by the operational creditor claiming to be an operational creditor with a prayer for initiation of the corporate insolvency resolution process against the respondent. The applicant alleged non-payment of an outstanding amount by the respondent, triggering the need for insolvency resolution.

Issue 2: Claim of Operational Debt
The applicant claimed that the respondent owed an outstanding amount of ?1,20,78,456.34 against invoices raised between August 19, 2010, and January 11, 2011. Despite reminder letters and a memorandum of understanding for payment within a specified timeframe, the respondent failed to clear the dues. The respondent admitted the liability but expressed inability to clear the claimed amount, leading to the initiation of the insolvency resolution process.

Issue 3: Tribunal's Jurisdiction
Upon detailed consideration, the Tribunal found that the claim amount had been defaulted by the respondent and was agreed as due and payable. The Tribunal established its jurisdiction to entertain and adjudicate the application based on the location of the respondent's registered office in Jaipur. Consequently, the Tribunal deemed it a suitable case to initiate the corporate insolvency resolution process against the respondent in accordance with the provisions of the Insolvency and Bankruptcy Code, 2016.

In conclusion, the Tribunal admitted the application, appointed an interim resolution professional, and invoked moratorium under section 14 of the Insolvency and Bankruptcy Code, 2016. The IRP was directed to manage the affairs of the respondent/corporate debtor, and the operational creditor was instructed to deposit a specified sum for the IRP's expenses. All parties involved were directed to cooperate with the IRP during the resolution process. The Tribunal communicated the order to the relevant parties and the Insolvency and Bankruptcy Board of India for record-keeping.

← Previous Next →