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2022 (4) TMI 1363 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existenc eof debt and dispute or not - no response to the demand notice were given - HELD THAT - The Operational Creditor, in Part-IV of the Application, has stated that total debt due and payable is, ₹ 11,75,995.96/-, inclusive of interest. The date of default is 15.08.2018. It is pertinent to note that the Operational Creditor has placed on record the demand notice along with invoices, ledger account, bank statements with its Application, stating that the Corporate Debtor itself had acknowledged the said invoices. Once the debt is shown as due, it is for the Corporate Debtor to prove that there are no outstanding dues to be paid to the Operational Creditor. The Corporate Debtor has in its reply acknowledged its liability to pay ₹ 2,57,572/-, being a part of the debt. However, no such payment has been made by the Corporate Debtor. Further, the corporate debtor has stated about the existence of some dispute with regards to the material supplied. However, no documents/communication has been annexed to prove the existence of any dispute. Hence, it appears to be an illusionary dispute. The present application is complete and the Operational Creditor is entitled to claim its dues, establishing the default in payment of the operational debt beyond doubt, and fulfillment of requirements under section 9(5) of the Code. Hence, the present application is admitted. Application admitted - moratorium declared.
Issues:
1. Application filed under Section 9 of Insolvency and Bankruptcy Code, 2016 for Corporate Insolvency Resolution Process (CIRP). 2. Operational Creditor seeking payment from Corporate Debtor for supply of scaffolding materials. 3. Dispute regarding outstanding operational debt and initiation of CIRP. 4. Response of Corporate Debtor to demand notice and allegations of concealed payments. 5. Legal principles regarding pre-existing disputes and plausible contentions. 6. Admittance of application, appointment of Interim Resolution Professional, and declaration of moratorium. Issue 1: Application under Section 9 of IBC for CIRP The application was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, by the Operational Creditor, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, based on the outstanding operational debt. Issue 2: Operational Creditor's Claim The Operational Creditor, engaged in supplying scaffolding materials, claimed an outstanding amount of ?11,75,995.96 from the Corporate Debtor, supported by invoices and ledger accounts reflecting the transactions between the parties. Issue 3: Dispute and CIRP Initiation Despite reminders and a demand notice, the Corporate Debtor did not respond or make payments, leading the Operational Creditor to file the application for CIRP initiation, citing the default in payment and the existence of outstanding dues. Issue 4: Corporate Debtor's Response The Corporate Debtor, in its reply, disputed the total amount claimed by the Operational Creditor, alleging concealment of payments and disputes regarding the quality of materials supplied, leading to a partial acknowledgment of ?2,57,572 as due. Issue 5: Legal Principles Citing legal precedents, the Tribunal highlighted that pre-existing disputes raised after the demand notice cannot be considered, emphasizing the need for a genuine dispute supported by evidence, not mere assertions. The Corporate Debtor's failure to prove the alleged disputes was deemed illusory. Issue 6: Admittance and Moratorium After thorough examination, the Tribunal admitted the application, appointed an Interim Resolution Professional, and declared a moratorium on certain actions against the Corporate Debtor, ensuring the continuation of essential services and specifying the effect and duration of the moratorium. This detailed analysis covers the key issues addressed in the judgment, including the legal aspects, creditor-debtor dynamics, dispute resolution, and the procedural steps taken by the Tribunal to initiate the Corporate Insolvency Resolution Process.
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