2022 (2) TMI 1013 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors or not - function as principal or as an agent - existence of debt and dispute or not - HELD THAT - It is clear that the Petitioners have rendered the services and there is no dispute with respect to the defect of the services. The only dispute is whether the Respondent/corporate debtor has merely acted as an intermediary or was acting as the principal/co-principal with C K. In order to arrive at any conclusion, the transactions and invoices, which shows that the invoice was raised in favour of Respondent and not C K are properly perused. Furthermore, part payment is made by the Respondent and not by C K. The respondent has deducted TDS and same is evident from Form 26AS and the Operational Creditor has deposited GST amount of ₹ 37,08,000/- on the entire amount of invoice in favour of the respondent - the respondent was not merely acting as an agent rather it was acting as the principal and hence is liable to pay the amount to the petitioners which it defaulted in part. As a result, this authority is inclined to initiate the CIR Process of Corporate Debtor. Therefore, the present petition is admitted. Application admitted - moratorium declared.

Summary

Issues:
Operational Creditor's petition under Section 9 of IBC, 2016 for CIRP initiation against Corporate Debtor.

Detailed Analysis:

1. Operational Creditor's Claims:
- The Operational Creditors provided services to the Corporate Debtor and claimed unpaid dues of ?1,34,08,000.
- The Corporate Debtor partly paid the amount but disputed the relationship and liability.
- The Operational Creditors argued that Corporate Debtor had a direct contractual relationship with them, regardless of involvement of C & K.

2. Corporate Debtor's Defense:
- Corporate Debtor contended that the payment was made on instructions of C & K, acting as an intermediary for payment disbursement.
- Corporate Debtor disputed the debt, claiming no services were rendered directly to them.
- Corporate Debtor objected to the claim raised against a third party and denied privity of contract with Operational Creditors.

3. Judgment and Decision:
- After reviewing the transactions and invoices, the Tribunal found that the Corporate Debtor was not merely an agent but a principal in the transaction.
- The Tribunal concluded that the Corporate Debtor was liable to pay the outstanding amount to the Operational Creditors, which it failed to do.
- The Tribunal admitted the petition, initiated the CIR Process, and appointed an Insolvency Resolution Professional (IRP) for the Corporate Debtor.

4. Additional Directions:
- The Operational Creditor was directed to deposit a sum with the IRP to cover expenses related to the CIRP process.
- Moratorium was imposed on the Corporate Debtor as per Section 14(1) of the IBC, 2016, prohibiting certain actions during the moratorium period.
- Various administrative directions were given, including communication of the order to relevant parties and authorities for compliance.

In conclusion, the Tribunal found in favor of the Operational Creditors, holding the Corporate Debtor liable for the unpaid dues and initiating the Corporate Insolvency Resolution Process. The judgment provided detailed reasoning based on the contractual relationships and payment transactions between the parties, ensuring compliance with the Insolvency and Bankruptcy Code, 2016.