2022 (5) TMI 82 - Tri - Insolvency and Bankruptcy

Seeking direction to respondent to deposit the amount forthwith to the account of the RP maintained for the purpose of CIRP towards the contribution towards its share of CIRP Cost - levy of maximum penalty of one crore rupees to the respondent for initiating the Insolvency Resolution Process with malicious intent under Section 65(1) of Insolvency and Bankruptcy Code, 2016 in addition to the CIRP cost (in case of failure to deposit the amount) - HELD THAT - Since the Operational Creditor has not paid the amount to the RP, which the operational creditor has to pay for the initiation and completion of the CIRP, the Resolution Professional is forced to file this application. After issue of notice, the respondent appeared through counsel on 17.12.2021 and stated that the Respondent wanted to file a counter to the application and the matter was adjourned to 06.01.2022 granting time. However, since no reply/ counter has been filed by the Respondent, this Tribunal on 06.01.2022 directed Shri. P. R. Shanmugham, Director of the Respondent Company to appear in person through VC. On 31.01.2022, Shri. P. R. Shanmugham appeared and stated that he has paid Rs. 1,00,000/- and sought further time to settle the dues - He was directed to deposit the balance amount within two weeks. However, the balance amount was not deposited by him. Hence, vide order dated 17.02.2022, he was directed to pay the balance amount of Rs. 3,43,377/- to the account of RP on or before 08.03.2022. But this direction was also not complied with by the Respondent and as a special case; the time for payment was extended upto 16.03.2022 making it clear that no further time will be granted. Even though the Tribunal gave amble opportunity to the Respondent to make the payment, all the directions have been flouted by him. In order to proceed with the CIRP, it is necessary that all the parties should cooperate and make the respective payments. The Operational Creditor who filed this IB petition should be a party who should take more vigilant action to complete the process, so that they will get their share of money at the earliest possible. Respondent is directed to make the payment of Rs. 3,02,358/- to the Resolution Professional immediately at any rate within 2 weeks from the date of receipt of this order - Application disposed off.

Summary

Issues:
1. Application filed by Resolution Professional under Sections 60(5) and 65(1) of the Insolvency and Bankruptcy Code, 2016 against Operational Creditor.
2. Failure of Operational Creditor to deposit required amounts towards CIRP costs.
3. Dispute over payment obligations and alleged malicious intent of Operational Creditor.
4. Non-compliance with Tribunal orders by the Operational Creditor leading to legal action.

Issue 1: Application filed by Resolution Professional under Sections 60(5) and 65(1) of the Insolvency and Bankruptcy Code, 2016 against Operational Creditor:
The Resolution Professional (RP) filed an application seeking relief against the Operational Creditor under Sections 60(5) and 65(1) of the Insolvency and Bankruptcy Code, 2016. The application aimed to direct the respondent to deposit a specified amount towards its share of CIRP costs and impose penalties for non-compliance.

Issue 2: Failure of Operational Creditor to deposit required amounts towards CIRP costs:
The Operational Creditor failed to deposit the necessary amounts towards its share of CIRP costs despite multiple directives from the RP and the Tribunal. The RP diligently followed procedures and communicated payment obligations to the Operational Creditor, who consistently disregarded the payment requests, leading to legal action.

Issue 3: Dispute over payment obligations and alleged malicious intent of Operational Creditor:
The RP detailed the amount owed by the Operational Creditor towards CIRP costs, emphasizing the necessity of timely payments for the resolution process. The RP accused the Operational Creditor of initiating the CIRP with malicious intent to recover dues rather than for resolution purposes, highlighting the seriousness of the Operational Creditor's non-compliance with payment obligations.

Issue 4: Non-compliance with Tribunal orders by the Operational Creditor leading to legal action:
Despite various opportunities and directives from the Tribunal to settle dues, the Operational Creditor consistently failed to comply with payment obligations. The Tribunal granted multiple extensions for payment, but the Operational Creditor continued to default on payments, leading to the Tribunal's decision to direct immediate payment of the outstanding amount to the RP within a specified timeframe.

In conclusion, the Tribunal allowed the application and directed the Operational Creditor to make immediate payment to the Resolution Professional within a specified timeframe. The Tribunal emphasized the importance of cooperation from all parties involved in the CIRP process and highlighted the necessity for timely payments to facilitate the resolution process effectively.