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2022 (6) TMI 873 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT - The corporate debtor in its reply letter dated 14.05.2016 to the legal notice of the Petitioner dated 22.04.2016, the Respondent has admitted that the claims in furtherance of the debit notice of Rs.15,60,326.94 was revised and reduced to Rs.10,43,923.20, this by itself is also an admission of liability by the Corporate Debtor. However, the Corporate Debtor has contended that the payment thereof is subject to the condition of the Petitioner returning the defective spare parts to the Corporate Debtor. In this regard, Petitioner has already submitted that all the defective goods lying with them were returned to the Corporate Debtor on 21.10.2015 by courier, and the same was communicated to the Corporate Debtor vide email dated 24.10.2015. Moreover, the Petitioner has filed the copy of the said e-mail. Hence the Petitioner has proved the existence of debt and default on the part of the Corporate Debtor. The Petitioner has filed the present Petition before this Tribunal on 22.06.2018 and as such the Notification effected in increasing the threshold limit from Rupees One Lakh to Rupees One Crore as on and from 24.03.2020 does not apply to the present case. Under the said circumstances, since the debt and default on the part of the Corporate Debtor being proved and also by looking at the consent given by an Insolvency Professional, this petition is hereby admitted. Petition admitted - moratorium declared.
Issues:
1. Application filed under section 9 of Insolvency and Bankruptcy Code, 2016 for default in repayment. 2. Dispute regarding invoices and service quality between Operational Creditor and Corporate Debtor. 3. Defense raised by Corporate Debtor citing a dismissed company petition and counterclaim. 4. Admittance of liability by Corporate Debtor subject to conditions. 5. Appointment of Interim Resolution Professional and initiation of Corporate Insolvency Resolution Process. Analysis: 1. The application was filed under section 9 of the Insolvency and Bankruptcy Code, 2016 by the Operational Creditor against the Corporate Debtor for default in repaying an amount. The Operational Creditor had been duly authorized to initiate the Corporate Insolvency Resolution Process (CIRP) due to non-payment by the Corporate Debtor. 2. A service agreement existed between the Operational Creditor and the Corporate Debtor for maintenance and services to pharmaceutical equipment. Invoices were raised by the Operational Creditor against the Corporate Debtor, leading to a dispute over the quality of service and non-payment. The Operational Creditor issued Section 8 notices, while the Corporate Debtor claimed termination of the agreement and raised a counterclaim. 3. The Corporate Debtor defended itself by mentioning a dismissed company petition on the same subject and raised a counterclaim against the Operational Creditor. The Corporate Debtor contended that the amount claimed was in dispute and not maintainable under the IBC, offering to deposit the principal amount until resolution of the dispute. 4. The Corporate Debtor admitted liability subject to conditions regarding defective spare parts. The Operational Creditor denied the contentions raised by the Corporate Debtor and argued that the claim fell within the definition of debt under the Code, justifying the petition. 5. After hearing submissions from both parties, the Tribunal found that the debt and default by the Corporate Debtor were proven. The Tribunal admitted the petition, appointed an Interim Resolution Professional, and ordered the initiation of the Corporate Insolvency Resolution Process against the Corporate Debtor. Various directions were given regarding the CIRP process, costs, moratorium, management, and public announcement. This detailed analysis outlines the legal proceedings, arguments presented, and the Tribunal's decision in the case involving an application under the Insolvency and Bankruptcy Code, 2016, emphasizing the issues of default, disputes, liability, and the initiation of the Corporate Insolvency Resolution Process.
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