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2022 (2) TMI 563 - 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 - entire amount of dues paid by respondent or not - it is the specific case of the Respondent that it has paid the entire value of ₹ 1,20,76,611/- to the Petitioner and hence there is nothing to pay further - HELD THAT - It is seen from the record that the Respondent has paid the entire cost of the supplies made by the Petitioner. The Petitioner while not denying the same, however submits that, out of the total amount of ₹ 1,20,76,611/-, it has adjusted only ₹ 73,93,203/- towards the liability of the Respondent and whereas the balance amount was adjusted against the liabilities of a Partnership Firm by name, M/s. RMM Food Products, in which Mr. R.M. Shadab Hussain who is the Director of the Respondent/Corporate Debtor is also a Partner and it was done as per the understanding between the parties at the appropriate time. Once the Respondent is able to prove with the support of the Bank Statements and other record that the value of the supplies made by the Petitioner were paid back, there are no merit in the contention of the Petitioner. The Petitioner failed to substantiate its contention with regard to any understanding between the parties that it can adjust certain amount out of the payments made by the Respondent towards the payments required to be made by another legal entity which is a Firm by the name, M/s. RMM Food Products. This Adjudicating Authority, in a summary procedure like the CIRP under the IBC, 2016 cannot conduct a trial into these disputed issues. Petition dismissed.
Issues Involved:
1. Whether the Corporate Debtor has paid the entire amount due to the Operational Creditor. 2. Whether the Operational Creditor can adjust payments made by the Corporate Debtor towards the liabilities of another entity, RMM Food Products. 3. Whether the Corporate Insolvency Resolution Process (CIRP) can be initiated based on the claims made by the Operational Creditor. Issue-wise Detailed Analysis: 1. Payment of Entire Amount Due: The Operational Creditor, M/s. Sicagen India Limited, claimed that it supplied materials worth ?1,20,76,611/- to the Corporate Debtor, M/s. Tasa Foods Private Limited, and that only ?73,93,203/- had been paid, leaving a balance of ?46,83,408/-. The Corporate Debtor contended that it had paid the entire amount due, supported by bank statements and other records showing payments from 24.03.2011 to 25.08.2014. The Tribunal found that the Corporate Debtor had indeed paid the entire amount of ?1,20,76,611/- and that there was no outstanding payment due to the Operational Creditor. 2. Adjustment of Payments Towards Liabilities of Another Entity: The Operational Creditor argued that out of the total amount paid by the Corporate Debtor, ?73,93,203/- was adjusted towards the Corporate Debtor's liability, and the balance was adjusted against the liabilities of RMM Food Products, a partnership firm associated with the Corporate Debtor's director. The Tribunal noted that the Operational Creditor failed to provide evidence of any agreement or understanding that allowed such an adjustment. The Tribunal emphasized that in a summary procedure like CIRP under the IBC, 2016, it cannot delve into disputed issues without substantial evidence. 3. Initiation of CIRP: The Operational Creditor sought to initiate CIRP against the Corporate Debtor under Section 9 of the Insolvency and Bankruptcy Code, 2016. The Corporate Debtor opposed this, arguing that the entire payment had been made and that the Operational Creditor's claims were baseless and intended to use the proceedings as a recovery mechanism. The Tribunal, after examining the evidence and arguments, concluded that there was no operational debt owed by the Corporate Debtor to the Operational Creditor. Consequently, the Tribunal found no merit in the petition for initiating CIRP and dismissed the same. Conclusion: The Tribunal dismissed the petition filed by the Operational Creditor, M/s. Sicagen India Limited, against the Corporate Debtor, M/s. Tasa Foods Private Limited, for initiating CIRP. The Tribunal determined that the Corporate Debtor had paid the entire amount due and that the Operational Creditor's claim of adjusting payments towards another entity's liabilities was unsubstantiated. The Tribunal emphasized that it cannot conduct a trial into disputed issues in a summary procedure under the IBC, 2016.
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