2020 (9) TMI 946 - 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 - time limitation - HELD THAT - There was no pre-existing dispute between the parties with regards the debt which has become due and remained unpaid for more than 1 Lakh as the corporate debtor has failed to present any document to support its averment - The corporate debtor has not placed on record any communication or document which exhibits the plausible dispute between the parties. There is no merit in the so-called dispute raised by the corporate debtor as mere reply filed by the corporate debtor to the present application, is unable to establish any pre-existing dispute of genuine nature. On the contrary the decree for recovery of dues passed by the Ld. ADJ Rohini Court, New Delhi dated 08.09.2016, belies its story of dispute and confirms the admission of liability of the corporate debtor. This leaves no doubt that the default has occurred for the payment of the operational debt for which the invoices were raised by the applicant and the so called dispute raised by the corporate debtor is merely a moonshine dispute. The dispute raised by the corporate debtor, is spurious, plainly frivolous and unable to categorize as genuine dispute as reproduced above. Hence, contention of the corporate debtor, of a pre existing dispute without any evidence and merit is a clear after thought to defeat the claim of the applicant - the present application is complete and the Applicant has established its claim which is payable and due by the corporate debtor. Time Limitation - HELD THAT - The date of decree passed by the Ld. ADJ Rohini Courts New Delhi is 08.09.2016, as the date of default and the present application is filed on 06/06/2019. Hence the application is not time barred and filed within the period of limitation - The registered office of corporate debtor is situated in Delhi and therefore this Tribunal has jurisdiction to entertain and try this application. Application admitted - moratorium declared.

Summary

Issues:
1. Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 for initiating Corporate Insolvency process.
2. Dispute regarding outstanding dues and liability between the Applicant and the Corporate Debtor.
3. Objections raised by the Corporate Debtor against the application.
4. Applicant's response to the objections raised by the Corporate Debtor.
5. Examination of evidence and documents presented by both parties.
6. Decision on the admission of the application and appointment of Interim Resolution Professional.
7. Directions regarding deposit of funds and initiation of moratorium period.

Issue 1: Application under Section 9 of the Insolvency and Bankruptcy Code, 2016
The Applicant, a private limited company, filed an application under Section 9 of the Insolvency and Bankruptcy Code seeking the initiation of Corporate Insolvency process against the Corporate Debtor, another private limited company, due to non-payment of outstanding dues amounting to ?24,59,941, including principal amount, interest, and costs. The Applicant provided detailed information about the debt owed and the steps taken to recover the amount.

Issue 2: Dispute regarding outstanding dues and liability
The Corporate Debtor raised objections, claiming a pre-existing dispute, pending appeals, and settlement discussions regarding the outstanding amount. However, the Applicant refuted these claims, stating that the Corporate Debtor failed to provide evidence of any genuine dispute and that the debt was valid and due. The Tribunal noted the absence of substantial evidence supporting the Corporate Debtor's contentions.

Issue 3: Objections and responses
The Corporate Debtor objected to the application citing pre-existing disputes, pending legal actions, and differing payment terms. In response, the Applicant highlighted the lack of evidence supporting the Corporate Debtor's objections, emphasizing the validity of the outstanding debt and the previous court decree in favor of the Applicant.

Issue 4: Examination of evidence
After reviewing the documents and submissions from both parties, the Tribunal found no substantial evidence supporting the Corporate Debtor's claims of disputes or pending legal actions. The Tribunal emphasized the importance of genuine disputes and evidence in such cases, citing relevant legal precedents.

Issue 5: Decision on the admission of the application
Based on the lack of evidence supporting the Corporate Debtor's objections and the validity of the outstanding debt, the Tribunal admitted the Applicant's application under Section 9 of the Insolvency and Bankruptcy Code. The Tribunal appointed an Interim Resolution Professional and directed the Applicant to deposit funds to meet expenses related to the insolvency process.

Issue 6: Directions and orders
The Tribunal directed the Applicant to deposit a specified amount with the Interim Resolution Professional, initiated a moratorium period as per the provisions of the Code, and communicated the order to all relevant parties and authorities. The Tribunal ensured compliance with regulatory requirements and provided instructions for further proceedings.

This detailed analysis covers the issues involved in the legal judgment, including the application under the Insolvency and Bankruptcy Code, disputes between the parties, objections raised, examination of evidence, decision on admission, and subsequent directions and orders issued by the Tribunal.