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2022 (3) TMI 595 - 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 - validity of demand notice - HELD THAT - The ratification in this case is done in respect of all the acts/deeds inclusive of filing the CP which means that the giving of section 8 notice by the Authorised Signatory is also validated by the said resolution. Apart from that, the earlier authorization is very widely worded which gives authorization to make applications, communications etc. - the notice given under Section 8 of the IBC and the Application filed under Section 9 of the IBC are under proper authorization. Non-filing of invoices along with the notice - HELD THAT - A letter was issued by the Operational Creditor on 04.07.2017 rejecting the proposal of the instalments without Post-Dated Cheques (PDCs) and also rejecting the plea of waiver of interest at 12% p.a. on the delayed payment. A letter dated 27.07.2017 was issued by the Corporate Debtor, categorically admitting that as per the books of the accounts the balance as on 31.03.2017 stands at ₹ 3,79,47,945/- and they are liable to pay the company the said amount as claimed by the letter of the Operational Creditor dated 18.07.2017. This letter seems to be in response to the letter dated 18.07.2017 by the Operational Creditor calling upon the Corporate Debtor to confirm the balance due to them as on 31.03.2017. Hence, when there is a clear admission on the part of Corporate Debtor with regard to the debt due as on 31.03.2017 which is the same amount which is claimed in the CP, rejecting the application for not filing invoices would be a travesty of justice. There seems to be no pre-existing dispute as contended - the Corporate Debtor is due an amount of ₹ 4,63,19,366/- to the Operational Creditor and has defaulted in discharging the said due and hence, CIRP can be initiated against the Corporate Debtor. It is a fit case to admit and order initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor - application admitted - moratorium declared.
Issues Involved:
1. Validity of the demand notice under Section 8 of the IBC, 2016. 2. Authorization of the signatory to initiate CIRP. 3. Proof of debt and default. 4. Existence of pre-existing dispute. 5. Appointment of Insolvency Resolution Professional (IRP). Issue-wise Detailed Analysis: 1. Validity of the Demand Notice under Section 8 of the IBC, 2016: The Corporate Debtor contended that the demand notice under Section 8 of the IBC, 2016, was not served at its registered office. The Tribunal noted that the Operational Creditor provided consignment details showing delivery of the notice to the registered office. The Tribunal referenced the NCLAT decision in Alloysmin Industries Vs. Raman Casting Private Limited, which held that serving the notice either at the registered office or corporate office is valid. Thus, the demand notice was deemed validly served. 2. Authorization of the Signatory to Initiate CIRP: The Corporate Debtor argued that the authorization given to the signatory did not specifically cover initiating CIRP under Section 9 of the IBC, 2016. However, the Operational Creditor later ratified the acts of the signatory, including filing the petition. The Tribunal held that the absence of authorization at the time of filing is a curable defect and that the subsequent ratification validated the initiation of CIRP. 3. Proof of Debt and Default: The Corporate Debtor argued that the invoices and other documents were not properly annexed to the petition. The Tribunal, however, noted the clear admission of debt by the Corporate Debtor through various correspondences. The Tribunal referenced the NCLAT judgment in Alloysmin Industries Vs. Raman Casting Private Limited, which emphasized the importance of undisputed claims and found that the Corporate Debtor had admitted the debt in multiple communications. Therefore, the Tribunal concluded that there was sufficient proof of debt and default. 4. Existence of Pre-existing Dispute: The Corporate Debtor contended that there were disputes regarding the invoices. However, the Tribunal found no evidence of any pre-existing dispute before the demand notice was issued. The Tribunal referenced the NCLT, Chennai judgment in Cellpap B.V. Vs. Oren Hydrocarbons Private Limited, which was not applicable as there was no pre-existing dispute in this case. The Tribunal concluded that the Corporate Debtor's claims of dispute were unfounded and raised only after the demand notice. 5. Appointment of Insolvency Resolution Professional (IRP): The Operational Creditor did not suggest any name for the IRP. Hence, the Tribunal appointed Mr. Immaneni Eswara Rao as the IRP, verifying that no disciplinary proceedings were pending against him. The Tribunal directed the IRP to take charge of the Corporate Debtor's management and proceed with the CIRP as per the provisions of the IBC. Conclusion: The Tribunal admitted the Company Petition, initiating the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. A moratorium was declared, and the appointed IRP was directed to take necessary steps in furtherance of the CIRP. The order emphasized the cooperation required from the Corporate Debtor's management and the communication of the order to relevant parties for compliance.
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