2022 (3) TMI 816 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - threshold monetary limit for admitting the application - HELD THAT - The corporate debtor has already admitted its liability to pay ₹ 3,10,789/- to the applicant even after alleged adjustments of the Scrap batteries. As far as the objection regarding non-receiving of Demand Notice is concern, the applicant has already proved that the due service of the Demand Notice can be legally presumed as the notice was returned with a remark SHIFTED - In the facts it is seen that the applicant clearly comes within the definition of Operational Creditor as the Corporate Debtor itself has admitted the fact of receiving goods supplied by the applicant. On a bare perusal of Form -5 filed under Section 9 of the Code read with Rule 4 of the Rules shows that the form is complete and there is no infirmity in the same. An application under Section 9 of the Code is acceptable so long as the debt is proved to be due and there has been occurrence or existence of default. In respect of applications filed before 24.03.2020 what is material is that the default is for at least ₹ 1 Lakh. In view of Section 4 of the Code, the moment default is of Rupees one lakh or more, the application to trigger Corporate Insolvency Resolution Process under the Code is maintainable. The corporate debtor has failed to show that there is no debt or default in existence so as to avoid the provisions of the Code - since the corporate debtor already issued a cheque in order to clear its liability and also admitted its liability to pay ₹ 3,10,789 which is more than ₹ 1 lac, the claim of applicant deserves to be allowed. Application admitted - moratorium declared.

Summary

Issues:
1. Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 for Corporate Insolvency Resolution Process initiation.
2. Validity of the demand notice sent by the applicant.
3. Dispute regarding the amount owed by the Corporate Debtor to the applicant.
4. Appointment of Interim Resolution Professional.
5. Direction for deposit by the applicant with the Interim Resolution Professional.
6. Declaration of moratorium under Section 14 of the Code.

Analysis:

Issue 1: Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 for Corporate Insolvency Resolution Process initiation:
The petitioner, an Operational Creditor, filed a petition under Section 9 of the Code seeking initiation of Corporate Insolvency Resolution Process against the Corporate Debtor. The Corporate Debtor admitted a liability of ?3,10,789 to the applicant. The Tribunal found that the debt was due and a default existed, meeting the requirements for initiating the insolvency process. The application was accepted based on the admitted liability and default by the Corporate Debtor.

Issue 2: Validity of the demand notice sent by the applicant:
The applicant sent a demand notice under Section 8 of the Code, which was returned with a remark "SHIFTED." The Tribunal held that due service of the Demand Notice could be presumed, citing legal precedents. The notice was considered to have been effectively served, despite being returned.

Issue 3: Dispute regarding the amount owed by the Corporate Debtor to the applicant:
The Corporate Debtor disputed the amount owed, claiming adjustments for scrap batteries supplied. However, the applicant denied these claims, asserting that the Corporate Debtor had admitted to receiving goods and had issued cheques as part payment. The Tribunal found in favor of the applicant, considering the admitted liability and default by the Corporate Debtor.

Issue 4: Appointment of Interim Resolution Professional:
The Tribunal appointed Mr. Anshuj Dhingra as the Interim Resolution Professional for the Corporate Debtor. Specific conditions and disclosures were required to be met by the appointed IRP, and the applicant was directed to deposit a sum with the IRP to cover expenses related to the resolution process.

Issue 5: Direction for deposit by the applicant with the Interim Resolution Professional:
The Tribunal directed the applicant to deposit a specified amount with the Interim Resolution Professional to meet expenses related to the resolution process. The amount was subject to adjustment by the Committee of Creditors and was to be paid back to the applicant accordingly.

Issue 6: Declaration of moratorium under Section 14 of the Code:
A moratorium was declared by the Tribunal in accordance with Section 14 of the Code, imposing restrictions on various actions against the Corporate Debtor. Exceptions to the moratorium were outlined, and the obligations of the Interim Resolution Professional and related parties were specified to ensure compliance with the Code, Rules, and Regulations.

This comprehensive analysis covers the key issues addressed in the judgment, detailing the Tribunal's findings and decisions on each matter presented before it.