2022 (6) TMI 48 - 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 - Time Limitation - Whether the documentary evidence furnished with application shows that the aforesaid debt is due and payable and has not yet been paid by the Corporate Debtor? HELD THAT - This application being under section 9 of the I B Code, 2016 the Operational Creditor shall establish that an operational debt is due and payable by the Corporate Debtor, exceeding Rs. 1 lac besides default, in payment of the same by the Corporate Debtor. A perusal of the invoices, delivery challans and ledger accounts of the Corporate Debtor clearly disclose that the applicant had supplied garments to the Corporate Debtor for the value mentioned therein. The plea of the Corporate Debtor that it had not received supplies from the Operational Creditor cannot be accepted for the reason that the invoices contained TIN number of the Corporate Debtor besides GST has been paid on the goods supplied - there exists an operational debt of a sum of Rs. 24,75,740/- due and payable by the Corporate Debtor to the Operational Creditor and the same was defaulted by the Corporate Debtor. Time limitation - HELD THAT - The acknowledgement of debt is within the meaning of section 18 of the Limitation Act. The applicant had established operational debt due and payable by the Corporate Debtor and the Corporate Debtor has defaulted in repayment of the same. Therefore, it is a fit case to put the Corporate Debtor under CIRP - petition admitted - moratorium declared.

Issues Involved:
1. Whether the petition is barred by limitation.
2. Whether the Operational Creditor has substantiated the supply of goods and the existence of debt.
3. Whether the cheque issued by the Corporate Debtor was in discharge of debt or as security.
4. Whether the debt claimed by the Operational Creditor is due and payable.
5. Whether the Corporate Insolvency Resolution Process (CIRP) should be initiated.

Issue-wise Detailed Analysis:

1. Whether the petition is barred by limitation:
The Corporate Debtor argued that the petition is barred by limitation under Section 238A of the Insolvency and Bankruptcy Code (IBC) and Article 137 of the Limitation Act, 1963. The Operational Creditor countered this by stating that there was an acknowledgment of debt in an appeal filed before the Hon'ble High Court of Calcutta on 10.01.2017, which extended the limitation period by another three years, making the petition filed on 02.12.2019 within the limitation period. The Tribunal agreed with the Operational Creditor, citing Section 18 of the Limitation Act and relevant case laws, concluding that the debt is not barred by limitation.

2. Whether the Operational Creditor has substantiated the supply of goods and the existence of debt:
The Operational Creditor provided invoices, delivery challans, and ledger accounts as evidence of the supply of goods to the Corporate Debtor between 11.06.2015 and 06.08.2015. The Corporate Debtor disputed the authenticity of the invoices and denied receiving the goods. However, the Tribunal found that the invoices contained the Corporate Debtor’s TIN number and GST was paid on the goods supplied. Additionally, the Corporate Debtor did not dispute the ledger account. Therefore, the Tribunal concluded that the Operational Creditor had substantiated the supply of goods and the existence of debt.

3. Whether the cheque issued by the Corporate Debtor was in discharge of debt or as security:
The Corporate Debtor claimed that the cheque for Rs. 24,75,740/- was issued as security for a different transaction, not in discharge of any operational debt. The Tribunal noted that this claim was unsubstantiated and contrary to the Corporate Debtor’s own admission in pleadings before the Hon'ble High Court of Calcutta, where it acknowledged procuring goods and issuing the cheque. The Tribunal rejected the Corporate Debtor’s claim and accepted that the cheque was issued in partial discharge of the debt.

4. Whether the debt claimed by the Operational Creditor is due and payable:
The Tribunal examined the evidence, including invoices, delivery challans, and ledger accounts. It found that the Operational Creditor had established an operational debt of Rs. 24,75,740/- due and payable by the Corporate Debtor. The Tribunal also noted that the Corporate Debtor had defaulted in making the payment. Therefore, the Tribunal concluded that the debt claimed by the Operational Creditor is due and payable.

5. Whether the Corporate Insolvency Resolution Process (CIRP) should be initiated:
Based on the findings that the debt is due and payable, not barred by limitation, and the Corporate Debtor defaulted in repayment, the Tribunal decided to initiate the Corporate Insolvency Resolution Process (CIRP). The Tribunal admitted the petition under Section 9 of the IBC, declared a moratorium under Section 14, and appointed an Interim Resolution Professional (IRP) to carry out the functions as prescribed under the Code.

Conclusion:
The Tribunal admitted the petition, initiated the CIRP, declared a moratorium, and appointed an IRP. The Corporate Debtor was found to have defaulted on an operational debt that was due and payable, and the petition was within the limitation period. The Operational Creditor successfully substantiated the supply of goods and the existence of debt.

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