2022 (6) TMI 984 - 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 - HELD THAT - It is clear that even though there was no written agreement between the Operation Creditor and the Corporate Debtor, a business relation did exist between them and that the CD had in fact supplied the whole spices to the CD for which ad hoc payments were also made on numerous occasions except against the invoices in question. The Corporate Debtor has claimed that there are pre-existing disputes regarding the quality of goods supplied to the Corporate Debtor. However, the letters dated 27 June 2018 and 04 August 2018 regarding the same as sent by the Corporate Debtor are wrongfully addressed towards one Mr. Shankar Singh, whom the Corporate Debtor mistakenly addresses as the proprietor of Isha Food Products, Even though the relationship between Isha foods and Vashishta grinding works is not quite elaborated in the pleadings, it appears that no case has been made to prove that Shankar Singh is running all these companies, namely, Abhilasha Exports, Isha foods and Vashishtha Grinding, whereas the Operational Creditor has affirmed through an affidavit that the proprietor of Isha foods is Mr. Binod Kumar Chaudhary - Further, even if the wrongful mention of the addressee is taken to be a bona fide mistake, there is nothing on record to prove that the spurious goods being the blackish turmeric powder and other spurious powdered spices belonged to the batch of whole spices provided by Isha Food Products. The mere allegation of collusion being raised cannot, by itself, be sufficient to prevent the admission of the present petition. Otherwise, in every case, the Corporate Debtor can come up with a defence that the acknowledgment given was unauthorized, thus escaping the clutches of the law. This proposition, therefore, cannot be upheld since it will have unlimited consequences. This Adjudicating Authority is satisfied that a debt is due and payable by the Corporate Debtor towards the Operational Creditor and the Corporate Debtor has defaulted in the same. The petition has been filed in the requisite form and affidavit in compliance under section 9(3)(b) has been made. As such, this petition is complete in all respects. Petition admitted - moratorium declared.

Issues Involved:
1. Existence of debt and default.
2. Allegation of pre-existing disputes.
3. Authorization of the signatory to the application.
4. Limitation period for the claim.
5. Quality of goods supplied.
6. Collusion and fraudulent acts.
7. Compliance with procedural requirements under the Insolvency and Bankruptcy Code, 2016.

Issue-wise Detailed Analysis:

1. Existence of Debt and Default:
The Operational Creditor claimed that the Corporate Debtor owed a principal sum of Rs. 27,68,141/- along with interest @ 24% for the supplied spices. The Corporate Debtor acknowledged the receipt of goods and issued post-dated cheques, some of which were dishonored. The Tribunal found that a debt is due and payable by the Corporate Debtor towards the Operational Creditor, and the Corporate Debtor defaulted in making the payment.

2. Allegation of Pre-existing Disputes:
The Corporate Debtor argued that there were pre-existing disputes regarding the quality of goods supplied, citing letters dated 27 June 2018, 04 August 2018, and 28 August 2018. However, these letters were addressed to Mr. Shankar Singh, whom the Corporate Debtor mistakenly identified as the proprietor of Isha Food Products. The Tribunal noted that there was no evidence to prove that the spurious goods belonged to the batch supplied by Isha Food Products. The Tribunal also highlighted that the Corporate Debtor had acknowledged the debt and expressed an intention to pay through RTGS in the letter dated 04 August 2018.

3. Authorization of the Signatory to the Application:
The Corporate Debtor contended that the application was not in proper form as the signatory was not authorized. The Tribunal did not find merit in this argument, as the application was filed in the requisite form and the affidavit in compliance under section 9(3)(b) was made.

4. Limitation Period for the Claim:
The Corporate Debtor argued that the claim was barred by limitation. However, the Tribunal found that the date of default was 23 February 2018, and the petition was filed within the statutory period.

5. Quality of Goods Supplied:
The Corporate Debtor alleged that the goods supplied were of substandard quality. The Tribunal found no evidence to support this claim, noting that the Corporate Debtor had issued post-dated cheques for the invoices, indicating acceptance of the goods.

6. Collusion and Fraudulent Acts:
The Corporate Debtor alleged collusion between its Chief Accountant and the Operational Creditor. The Tribunal noted that the Corporate Debtor failed to provide any proof to establish this claim. Mere allegations of collusion cannot prevent the admission of the petition.

7. Compliance with Procedural Requirements:
The Tribunal found that the petition was complete in all respects and complied with the procedural requirements under the Insolvency and Bankruptcy Code, 2016. The application was admitted, and a moratorium under section 14 of the IBC was ordered.

Order:
The Tribunal admitted the application for initiating the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. A moratorium was declared, and Mr. Debdas Chakraborty was appointed as the Interim Resolution Professional (IRP). The Operational Creditor was directed to deposit a sum of Rs. 2,00,000/- with the IRP to meet the expenses of issuing public notice and inviting claims. The Tribunal also directed the Court Officer to communicate the order to the relevant parties and scheduled the next hearing for reporting progress on 27.07.2022.

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