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2021 (6) TMI 353 - 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 - Whatever dispute mentioned by corporate debtor is only after receiving the section 8 notice which is an after thought to shrug off the liability by the corporate debtor - In the present case, there is no such dispute is pre-existing and the same is a merely a spurious defense. Further, that the proposal for settlement amounts to admission on part of the Corporate Debtor. The operational debt has become due and default has occurred and application being complete needs to be admitted. The registered office of corporate debtor is situated in Delhi and therefore this Tribunal has jurisdiction to entertain and try this application - The date of default is 16.05.2019, and the present application was filed on 06.12.2019, hence the debt is not time barred and the application is filed within the period of limitation. The present application is complete and the Applicant is entitled to claim its dues, establishing the default in payment of the operational debt beyond doubt. The present application is admitted, in terms of section 9 (5) of IBC, 2016 - Moratorium declared.
Issues:
- Application under section 9 of Insolvency and Bankruptcy Code, 2016 - Dispute regarding payment of operational debt - Jurisdiction of the Tribunal - Appointment of Interim Resolution Professional (IRP) - Deposit by Operational Creditors with the IRP - Moratorium under Section 14 of the Code Analysis: 1. Application under section 9 of Insolvency and Bankruptcy Code, 2016: The Applicant filed an application seeking initiation of the Corporate Insolvency process against the Corporate Debtor under section 9 of the IBC, 2016. The Applicant, a limited company based in China, alleged that the Corporate Debtor had not made full payment for goods supplied, despite receiving them and acknowledging the debt in various emails. The Corporate Debtor, on the other hand, raised concerns about the quality and quantity of goods supplied, leading to a dispute over the outstanding amount. 2. Dispute regarding payment of operational debt: The Applicant contended that the Corporate Debtor acknowledged the debt and assured payment in multiple emails before receiving the demand notice under Section 8 of the IBC. The Tribunal noted that the Corporate Debtor's objections seemed to be an afterthought to avoid payment, as no evidence of a pre-existing dispute was presented. The Tribunal cited a previous judgment to emphasize the need to distinguish genuine disputes from feeble legal arguments. Consequently, the Tribunal found the Applicant entitled to claim its dues and admitted the application. 3. Jurisdiction of the Tribunal: The Tribunal asserted its jurisdiction to entertain the application, considering the registered office of the Corporate Debtor was in Delhi. This allowed the Tribunal to proceed with the case and make decisions regarding the insolvency proceedings. 4. Appointment of Interim Resolution Professional (IRP): As the Applicant did not propose the name of an IRP, the Tribunal appointed Mr. Umesh Singhal from the list provided by IBBI as the IRP for the Corporate Debtor. The appointment was subject to certain conditions and requirements to ensure the smooth functioning of the Corporate Insolvency Resolution Process (CIRP). 5. Deposit by Operational Creditors with the IRP: The Tribunal directed the Operational Creditors to deposit a specified sum with the appointed IRP to cover the expenses related to the CIRP. This deposit was to be made within a week from the date of the order and would be subject to adjustment by the Committee of Creditors. 6. Moratorium under Section 14 of the Code: With the application being admitted under Section 9(5) of the IBC, the Tribunal imposed a moratorium on the Corporate Debtor as per the provisions of Section 14(1) of the Code. The moratorium would restrict certain actions against the Corporate Debtor during the insolvency proceedings, with specific provisions coming into force as outlined in Sections 14(2) to 14(4) of the Code. This comprehensive analysis of the judgment highlights the key issues addressed by the Tribunal and the decisions made regarding the insolvency proceedings between the Applicant and the Corporate Debtor.
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