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2021 (3) TMI 300 - Tri - Insolvency and BankruptcyMaintainability 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 apparent that the TMT Bars were supplied and delivered and a debt towards it is due because of the non-payment. The petition made by the Operational Creditor is complete in all respects as required by law. It clearly shows that the Corporate Debtor is in default of a debt due and payable, and the default is in excess of the minimum amount of one lakh rupees as stipulated under section 4(1) of the Code at the relevant time. Therefore the default stands established and there is no reason to deny the admission of the petition. In view of this, this Adjudicating Authority admits this petition and orders initiation of CIRP against the Corporate Debtor. Application allowed - petition admitted - moratorium declared.
Issues Involved:
1. Maintainability of the petition. 2. Competency of the person affirming the petition. 3. Proper service of demand notice. 4. Quality of goods supplied. 5. Reconciliation of accounts and determination of the actual amount payable. Issue-wise Detailed Analysis: 1. Maintainability of the Petition: The Corporate Debtor argued that the petition is not maintainable as it is time-barred and affirmed by an incompetent person. However, the Tribunal found that all invoices were raised between 30.03.2019 and 19.10.2019, and the petition was filed on 17.12.2019, which is within the time limit. The Corporate Debtor failed to substantiate how the petition is barred under principles of acquiescence, waiver, estoppel, and analogous principles. Therefore, the petition is not time-barred. 2. Competency of the Person Affirming the Petition: The Corporate Debtor objected to the competency of Mr. Rajkumar Kedia in affirming the petition. The Tribunal noted that Mr. Kedia was authorized by a Board Resolution dated 01.12.2019 to affirm the petition, as annexed to the petition at page 360. Thus, the objection regarding competency was deemed baseless. 3. Proper Service of Demand Notice: The Corporate Debtor claimed improper service of the demand notice dated 01.12.2019. The Tribunal found that the demand notice was delivered on 02.02.2019 and acknowledged by the Corporate Debtor with its seal and signature. Therefore, the service of the demand notice was effectuated properly. 4. Quality of Goods Supplied: The Corporate Debtor contended that the goods supplied were of inferior quality. However, no proof was provided to support this contention. The Operational Creditor produced invoices, ledger accounts, letters acknowledging the outstanding amount, and bank statements. The Tribunal noted that the issue regarding the quality of goods was raised for the first time in the reply affidavit without any supportive evidence. The Corporate Debtor should have replied to the statutory demand notice if there were any disputes about the quality. Hence, this contention was not tenable. 5. Reconciliation of Accounts and Determination of Actual Amount Payable: The Corporate Debtor argued that the amount payable could not be quantified as it was under reconciliation. Letters dated 16.08.2019 and 18.11.2019 indicated an ongoing reconciliation process. However, the Corporate Debtor did not expressly deny the amount due and admitted financial constraints due to a recessionary trend in the industry. The Tribunal found that the TMT bars were supplied and delivered, and a debt was due because of non-payment. Judgment: The Tribunal admitted the petition under section 9 of the Insolvency and Bankruptcy Code, 2016, and ordered the initiation of the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. A moratorium under section 14 of the IBC was declared, and Mr. Uday Narayan Mitra was appointed as the Interim Resolution Professional (IRP). The Operational Creditor was directed to deposit ?2,00,000 with the IRP for expenses related to public notice and claims. The Tribunal ordered the IRP to submit periodical reports on the progress of the CIRP and directed the Operational Creditor to serve a copy of the order on the IRP and the Registrar of Companies, West Bengal, Kolkata. The case was scheduled to come up on 28.04.2021 for filing a periodical report.
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