2020 (12) TMI 370 - 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 note that the Applicant has placed on record all the invoices, stating that the Respondent itself had acknowledged the said invoices and copies of ledger account. Once the debt is shown as due, it is for Respondent to prove that there are no outstanding dues to be paid to the Applicant. There has been much cloud in the submission of the Respondent. Therefore, without any specific details of material particulars or evidence the fact of existence of a dispute cannot be sustained - In the present case, there is no such dispute as pre-existing, the dispute which was being claimed to be pre-existing by the corporate debtor does not survive. On the contrary there is an admission to outstanding amount on the part of the Corporate Debtor through its e-mail dated 6-9-2019. The present application is complete and the Operational Creditor is entitled to claim its dues, establishing the default in payment of the operational debt beyond doubt, and fulfillment of requirements under section 9(5) of the Code. Hence, the present application is admitted. Application admitted - moratorium declared.

Summary

Issues:
Application under section 9 of Insolvency and Bankruptcy Code, 2016 for Corporate Insolvency Resolution Process.

Analysis:
The Applicant, an Operational Creditor, filed an application under section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process against the Respondent, a Corporate Debtor. The Applicant provided travel-related services to the Respondent under a Travel Service Agreement. Despite raising invoices and reminders, the Respondent failed to make payments, leading to the Applicant stopping services. The Applicant sent a demand notice under section 8 of the Code, but the Respondent did not respond. The total debt due was &8377; 40,07,101.16, along with interest. The Respondent disputed the debt, claiming an oral agreement for forbearance, but the Applicant provided evidence of outstanding dues and non-payment by the Respondent.

The Tribunal noted that the Respondent failed to prove the absence of outstanding dues and acknowledged the invoices and ledger accounts. The Respondent's claim of a pre-existing dispute was dismissed as the email acknowledging the debt was submitted by the Applicant. Citing legal precedents, the Tribunal emphasized the need for a genuine dispute to reject an insolvency application. The Applicant complied with the necessary sections of the Code, including submitting an affidavit and bank statements. The Tribunal had jurisdiction over the matter as the Respondent's registered office was in New Delhi. Consequently, the application was admitted, and an Interim Resolution Professional was appointed. The Operational Creditor was directed to deposit a sum with the IRP for expenses. A moratorium was imposed on the Respondent, and the Registry was instructed to notify relevant parties about the order promptly.