2021 (5) TMI 579 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT - The claim raised with reference to amount due for invoices dated 10.06.2016 and 05.07.2016 amounting to ₹ 7,59,962/- along with an interest on the outstanding due amounting to ₹ 4,00,419/- @ 18% p.a., as per the terms of the invoice from the due date of the invoice till the date of the Demand Notice. It is not the case of Petitioner that debt in question is un-disputed. The Respondent has filed list of various emails exchanged with the Petitioner to show that the debt and default are in dispute. There is a pre-existing and bona fide dispute exists about the claim made by the Petitioner. Apart from pre-existing dispute, the instant Petition is filed to recover such disputed amount rather than to initiate CIRP on justified grounds - the Petitioner failed to make out any case so as to initiate CIRP in respect of Corporate Debtor. Petition dismissed.

Summary

Issues:
- Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the IBC, 2016.
- Dispute regarding outstanding dues between the Operational Creditor and the Corporate Debtor.

Analysis:
1. The petition was filed by the Operational Creditor seeking to initiate CIRP against the Corporate Debtor for defaulting on an amount of ?11,60,381, which included the principal amount and interest. The Operational Creditor provided details of the outstanding dues and the steps taken to recover them, including issuing a Demand Notice as per the IBC, 2016 rules.

2. The Respondent, in their objections, contended that the material supplied under the invoice was of low quality, leading to losses for the Corporate Debtor. They highlighted issues with the quality of flex supplied for printing, stating that the flex was of poor quality, resulting in rejected prints. The Respondent also argued that the claim made by the Operational Creditor was time-barred and not enough to invoke the jurisdiction of the Adjudicating Authority.

3. The Tribunal carefully examined the pleadings, relevant provisions of the IBC, rules, and the legal aspects of the case. It noted that the debt and default were in dispute, as evidenced by various emails exchanged between the parties. The Respondent raised a genuine dispute about the claim made by the Petitioner, indicating a pre-existing and bona fide dispute. The Petition seemed to be aimed at recovering a disputed amount rather than initiating CIRP on valid grounds.

4. Based on the facts and legal analysis, the Tribunal concluded that the Petitioner failed to establish a case for initiating CIRP against the Corporate Debtor. The Tribunal dismissed the petition, emphasizing the existence of a genuine dispute regarding the outstanding dues. The order did not prevent the Petitioner from seeking other legal avenues to recover the claim. No costs were awarded in this matter.