2020 (9) TMI 481 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT - It is pertinent to state here that this is not the forum to examine and adjudicate as to which portion of the claims are admissible. Tribunal will also not examine the relative merits of dispute. It is beyond the scope of this forum to decide as to which party and to what extent is responsible to pay amounts when there is a serious allegation of fabrication and misrepresentation. There is material to believe that disputes certainly exist in the facts of the present case and it is right to have the matter tried out before the axe, in the form of Corporate Insolvency Resolution Process, falls. There has been no admission of operational debt by the respondent. In fact, there has been a pre-existence of dispute regarding bills raised and services provided by the applicant. Dispute existed much prior to the issuance of notice under Section 8 of the Code as there are various issued were raised in respect of services provided by applicant to the respondent. The claim of pre-existing dispute suggests the need of elaborate investigation. It is reiterated that existence of dispute in the present case cannot be ruled out - the respondent has raised dispute with sufficient particulars. Hence, the amount of claim raised by the applicant clearly falls within the ambit of disputed claim. Section 9(5)(ii)(d) of the Code provides that adjudicating authority shall reject the application if notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility. Petition dismissed.

Summary

Issues:
Claim by operational creditor under section 9 of the Insolvency and Bankruptcy Code, 2016 for triggering Corporate Insolvency Resolution Process against the corporate debtor.

Analysis:
The operational creditor, M/S. Chandra Agencies, filed an application under section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process against the respondent company, M/S. Supertech Limited. The applicant claimed that the respondent failed to pay the outstanding amount, leading to the invocation of Section 8 of the Code by the operational creditor. The respondent raised objections, citing deficiencies in services and breach of obligations by the applicant. The respondent pointed out specific disputes in the services provided, including defective flexes and boards, leading to negative branding. The respondent disputed the operational debt with sufficient particulars, indicating the existence of a pre-existing dispute.

The Tribunal noted that the respondent raised disputes regarding the services provided by the applicant, which were not admitted by the respondent but were disputed with details. The Tribunal clarified that it was not the forum to determine the admissibility of claims or the relative merits of the dispute. Referring to the definition of "dispute" in the Code as per the Supreme Court's decision, the Tribunal emphasized the need to reject the application if a plausible contention requiring further investigation exists. The Tribunal found that there was a pre-existing dispute regarding bills raised and services provided, necessitating a detailed investigation.

Considering the existence of a dispute with specific particulars raised by the respondent, the Tribunal concluded that the claim fell within the ambit of a disputed claim. As per Section 9(5)(ii)(d) of the Code, the adjudicating authority must reject the application if a notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility. Therefore, the Tribunal rejected the petition, clarifying that the dismissal should not prejudice the applicant's rights before any other forum. The order was served to the parties, and the case records were consigned to the record room.