2022 (3) TMI 558 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditor - providing licenses for exporting various kind of material to the corporate debtor - existence of debt and dispute or not - HELD THAT - In order to establish its claim, the applicant has placed copy of the invoice dated 27.05.2019 and copies of Licenses alleged to have been issued in the favour of corporate debtor, but neither the invoice is acknowledged nor the licenses were signed by the corporate debtor. The ledger placed by the applicant is also not acknowledged or verified by the corporate debtor. The applicant has not placed any other document to show that the claimed operational debt is due and payable by the corporate debtor. Further, no communication or agreement has been placed before this Tribunal to establish the fact that the claim amount is due and payable by the respondent. Unless any cogent and convincing evidence is there on the record, merely on the basis of some invoices and copies of licenses, it could not be proved that the applicant herein was engaged by the respondent to arrange those licenses for the corporate debtor. In the absence of any reliable evidence, it could not be established that the applicant herein was actually engaged by the corporate debtor to arrange licenses for it. Accordingly, as per Section 9 of the Code, the applicant has failed to establish its claim against the respondent corporate debtor. The applicant measurably failed to establish the fact that its operational debt is payable by the respondent corporate debtor, thus the present application being devoid of any merit, stand rejected without any costs - application dismissed.

Summary

Issues Involved:
Application for initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of IBC 2016 based on alleged default by Corporate Debtor in payment for licenses provided by Operational Creditor.

Detailed Analysis:

1. Alleged Default and Transaction Details:
The Operational Creditor, engaged in export-import business, provided various licenses to the Corporate Debtor for exporting items. An outstanding balance of ?38,28,521 was claimed by the Operational Creditor, supported by invoices and ledger accounts showing non-payment by the Corporate Debtor. A demand notice was sent under Section 8 of the code, demanding payment.

2. Corporate Debtor's Response:
The Corporate Debtor contended that partial payments were made through banking channels and in cash, citing reasons such as settling accounts with dealers. They claimed to have paid a significant amount through bank channels and in cash. The Corporate Debtor also mentioned a previous transaction involving product quality issues and delayed payments.

3. Tribunal's Evaluation:
The Tribunal noted that the Operational Creditor failed to provide convincing evidence to establish the debt's validity. The invoices and licenses provided were not acknowledged or signed by the Corporate Debtor. The ledger presented was not verified by the Corporate Debtor. The absence of a tripartite agreement among the parties and licensing authorities was highlighted, indicating a lack of substantial proof of engagement between the Operational Creditor and the Corporate Debtor.

4. Decision and Conclusion:
Based on the evaluation, the Tribunal concluded that the Operational Creditor did not sufficiently prove the debt's legitimacy as per Section 9 of the Insolvency and Bankruptcy Code. Consequently, the application for CIRP initiation was rejected without imposing any costs. The Tribunal clarified that its decision should not prejudice the Operational Creditor's rights to pursue the matter in other forums.

This detailed analysis of the judgment provides insights into the transactional background, legal arguments presented, tribunal's assessment, and the ultimate decision regarding the application for CIRP initiation based on the alleged default by the Corporate Debtor in payment for licenses provided by the Operational Creditor.