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2022 (5) TMI 918 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of dispute between the parties prior to the issuance of the Demand Notice or not - Whether the applicant is an Operational Creditor and the debt is Operational Debt? - HELD THAT - The Hon'ble Supreme Court while interpreting the definitions of Operational Creditor and Operational Debt, in the case of SWISS RIBBONS PVT. LTD. AND ANR. VERSUS UNION OF INDIA AND ORS. 2019 (1) TMI 1508 - SUPREME COURT has held that Operational Creditors are relatable to supply of goods and services in the operation of business . Thus, it is manifestly clear that the Applicant had supplied goods to the Corporate Debtor in terms of the Seller's Contract and therefore, the Applicant is an Operational Creditor and the debt owed to it is an Operational Debt. Whether there exists any dispute between the parties prior to the issuance of the Demand Notice? - HELD THAT - On perusal of the counter filed by the Corporate Debtor, it is seen that the Corporate Debtor, throughout the averments made in the counter, seems to have only alleged that there exists a dispute between the parties. Further as per the contention of the Corporate Debtor, if the shipment was dispatched by the Applicant in violation to the seller's contract, the Corporate Debtor ought to have at least raised the objection at the point in time when the shipping company had sent a mail to the Corporate Debtor to clear the consignment. However, no documentary evidence or proof has been filed by the Corporate Debtor to show that it had objected to the shipment - the Operational Creditor has also filed an Affidavit under Section 9(3)(b) of IBC, 2016 wherein it has been stated that the Demand Notice has been served. Further in relation to the 'Pecuniary Jurisdiction' the total amount claimed to be defaulted exceeds Rs. 1 crore and as such this Tribunal has the 'Pecuniary Jurisdiction' to entertain this Petition, as filed by the Operational Creditor. The Petition as filed by the Operational Creditor, is required to be admitted under Section 9(5) of the IBC, 2016 - Application admitted - moratorium declared.
Issues Involved:
1. Whether the applicant is an Operational Creditor and the debt is Operational Debt. 2. Whether there exists any dispute between the parties prior to the issuance of the Demand Notice. Detailed Analysis: 1. Whether the applicant is an Operational Creditor and the debt is Operational Debt: The Tribunal examined the definitions under Sections 5(20) and 5(21) of the Insolvency and Bankruptcy Code, 2016 (IBC). Section 5(20) defines an "Operational Creditor" as a person to whom an operational debt is owed, and Section 5(21) defines "Operational Debt" as a claim in respect of the provision of goods or services. The Tribunal referred to the Supreme Court's interpretation in Swiss Ribbons Pvt. Ltd. & Anr. v. Union of India, which clarified that Operational Creditors are related to the supply of goods and services in the operation of business. The Tribunal noted that the applicant, M/s. Dhatu International PTE Limited, had supplied goods to the Corporate Debtor, M/s. Ferrosco Industries Private Limited, under a seller's contract dated 06.06.2019. The applicant claimed a sum of Rs. 1,01,62,118.50, including interest, as operational debt due to non-payment by the Corporate Debtor. The Tribunal concluded that the applicant is indeed an Operational Creditor and the debt owed is an Operational Debt. 2. Whether there exists any dispute between the parties prior to the issuance of the Demand Notice: The Tribunal reviewed the counter filed by the Corporate Debtor, which alleged that the invoices dated 19.06.2019 and 03.07.2019 were not accepted and were raised in violation of the seller's contract. The Corporate Debtor argued that the shipment should have been dispatched only after receiving a 10% advance payment, which was not done. However, the Tribunal observed that the Corporate Debtor did not provide any documentary evidence to show that it had objected to the shipment when the shipping company requested the clearance of the consignment. The Tribunal also noted that the Corporate Debtor had agreed to take delivery of the materials, as evidenced by email communications. The Tribunal found that the allegations of the Corporate Debtor were a "moonshine defence" to defeat the claim of the Operational Creditor. The Tribunal also considered the affidavit filed by the Operational Creditor under Section 9(3)(b) of IBC, stating that the Demand Notice had been served and that there was no pre-existing dispute regarding the unpaid debt. Conclusion: Based on the facts and circumstances, the Tribunal admitted the application filed by the Operational Creditor under Section 9(5) of the IBC, 2016. The Tribunal appointed Ms. Chitra Perinkulam Ragavan as the Interim Resolution Professional and declared a moratorium under Section 14(1) of the IBC. The moratorium includes the suspension of suits, transfer of assets, and recovery actions against the Corporate Debtor. The Tribunal directed the Operational Creditor to pay Rs. 1,00,000 to the Interim Resolution Professional for expenses related to the insolvency resolution process. The Tribunal's order was communicated to the Operational Creditor, Corporate Debtor, Insolvency and Bankruptcy Board of India (IBBI), and the Registrar of Companies.
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