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2021 (6) TMI 51 - Tri - Insolvency and BankruptcyMaintainability 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 demand notice, invoices filed by the Operational Creditor, the detail of which is given under Para IV of the Petition, compliance with the requirements of Section 9(3)(b) and (c), and the report filed by the Independent Chartered Accountant, clearly established that the Corporate Debtor has defaulted in making the payments of the debt due to the Operational Creditor. Thus, the application is admitted, and the commencement of the CIRP is ordered against the corporate debtor viz., M/Hemam Engineering Industries Ltd, which ordinarily shall be completed within 180 days, reckoning from the day this Order is passed. Application admitted - moratorium declared.
Issues:
1. Initiation of Corporate Insolvency Resolution Process under Section 9 of the IBC, 2016 against a Corporate Debtor. 2. Validity of the Board Resolution authorizing the Operational Creditor to file the insolvency application. 3. Dispute regarding the amount claimed by the Operational Creditor and payments made by the Corporate Debtor. 4. Reconciliation of accounts by an Independent Chartered Accountant. 5. Declaration of moratorium and appointment of Interim Resolution Professional. Detailed Analysis: 1. The judgment pertains to a petition filed under Section 9 of the IBC, 2016 seeking initiation of Corporate Insolvency Resolution Process against the Corporate Debtor, M/s. Hema Engineering Industries Limited. The Operational Creditor claimed a debt of ?4,73,33,795/- due and payable by the Corporate Debtor. The petition included details of the goods supplied, payment terms, acknowledgments, and non-payment issues leading to the insolvency application. 2. The Corporate Debtor challenged the validity of the Board Resolution authorizing the Operational Creditor to file the insolvency application. The Corporate Debtor argued that the Resolution was limited to filing suits for recovery and not insolvency proceedings. However, the Operational Creditor presented a clear Board Resolution authorizing the initiation of legal actions, including insolvency applications, against the Corporate Debtor. The Tribunal rejected the Corporate Debtor's objection, upholding the validity of the Resolution. 3. Disputes arose regarding the amount claimed by the Operational Creditor and the payments made by the Corporate Debtor. The Corporate Debtor contested the debt amount, citing debit notes and payments made through a third party. However, the Tribunal found the Corporate Debtor's arguments unsubstantiated, rejecting claims of overpayment and suppression of facts. The Tribunal relied on invoices, demand notices, and the report of an Independent Chartered Accountant to establish the default in payments by the Corporate Debtor. 4. An Independent Chartered Accountant reconciled the accounts of both parties, concluding an outstanding amount of ?3,61,73,329/-. Despite objections raised by the Corporate Debtor, the Tribunal accepted the findings of the Chartered Accountant, highlighting the lack of evidence supporting the Corporate Debtor's claims. The reconciliation process played a crucial role in determining the actual debt owed by the Corporate Debtor to the Operational Creditor. 5. The Tribunal admitted the insolvency application, ordering the commencement of the Corporate Insolvency Resolution Process against the Corporate Debtor. A moratorium was declared, prohibiting various actions against the Corporate Debtor's assets, and an Interim Resolution Professional was appointed to manage the affairs of the Corporate Debtor. The Tribunal directed the Operational Creditor to cover the IRP's expenses and emphasized cooperation from all parties involved in the resolution process.
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