2022 (1) TMI 1130 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of pre-existing dispute or not - payment for Invoice Nos. 5 6 not paid, other invoices duly paid - whether the Operational Creditor has actually done the work for which he has raised Invoice No. 5 6 and as to whether there is any default to that effect by the Corporate Debtor? - HELD THAT - It is seen from the record that the Invoice No. 5 was dated 30.09.2017 which is prior to the approval of the Resolution Plan. However, the Operational Creditor/Applicant did not file any claim before the Resolution Professional and therefore he is not entitled to make any claim at this point of time regarding Invoice No. 5. Learned counsel for the Corporate Debtor also submitted that the original agreement between the Corporate Debtor and PWD stood terminated with effect from 23.03.2018 and therefore it cannot be accepted that the Operational Creditor carried out any work after the termination of the said contract - It is seen that the 6th Invoice dated 30.11.2018 i.e., much after the expiration of the main agreement. Learned Counsel for the Corporate Debtor would therefore submit that the Petitioner is not entitled to have any claim on the basis of Invoice Nos. 5 6. There is no cogent evidence filed by the Operational Creditor in order to substantiate its case with respect to the Invoices Nos. 5 6 raised on the basis of the work executed by it - The Operational Creditor has filed a copy of the email dated 20.07.2018 sent by the Corporate Debtor to the Operational Creditor asking it to submit the final measurement of the work and the bill. The Operational Creditor has also filed a copy of the letter dated 20.07.2018 addressed to the Corporate Debtor requesting it to release an amount of ₹ 44,17,530.68/-. The said letter bears endorsement purportedly by the Corporate Debtor which states that the bill will be processed for PWD certification. However, the said endorsement has not been properly stamped - Therefore, it cannot be presumed that the email dated 20.07.2018 and the letter dated 20.07.2018 will have any relevancy to show that the Applicant has done the work during the relevant period for which it has raised Invoice Nos. 5 6. The Applicant has failed to prove his case - Application dismissed.

Summary

Issues:
- Application under Section 9 of IBC for initiation of CIRP against Corporate Debtor
- Non-payment of operational debt by Corporate Debtor
- Dispute over unpaid invoices and work completion

Analysis:
1. The Operational Creditor filed an application under Section 9 of the IBC, claiming non-payment of operational debt by the Corporate Debtor amounting to ?44,65,745.68. The dispute arose from a work order executed between the parties for construction work, where the Corporate Debtor allegedly failed to pay for the electrical work subcontracted by the Operational Creditor.

2. The Operational Creditor raised six invoices, but the Corporate Debtor only paid for four, leaving a balance of ?44,65,745.68 on the last two invoices. Despite demands, the Corporate Debtor did not fulfill the payment obligations as per the work order terms.

3. The Corporate Debtor argued that the Operational Creditor failed to submit claims during the CIRP proceedings initiated earlier, and the approved Resolution Plan binds all stakeholders. However, the Operational Creditor contended that the invoices in question were raised within the stipulated time frame.

4. The Corporate Debtor disputed the authenticity of the invoices, claiming they were fabricated and mentioned GST numbers before registration. Additionally, they asserted that full payment was made, and the contract ended due to the Operational Creditor's failure to complete the project by the specified date.

5. The Corporate Debtor raised disputes regarding debt amount, service quality, and terminated the work order, mentioning ongoing arbitration proceedings. The Operational Creditor based their claim on the remaining unpaid invoices, challenging the Corporate Debtor's assertions.

6. The Tribunal noted the lack of substantial evidence supporting the Operational Creditor's claim for the outstanding invoices. The documents provided did not conclusively prove the completion of work or the validity of the invoices, leading to the dismissal of the application under Section 9 of the IBC.