2022 (7) TMI 881 - 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 - Even though the Corporate Debtor has tried to convince this Adjudicating Authority as regards some pre-existing disputes and has raised certain frivolous grounds of defence but we are not convinced with any of the grounds of defence taken by the Corporate Debtor. Moreover, the Corporate Debtor has neither filed any evidence that they had duly served the notice of termination upon the Operational Creditor nor has raised any dispute prior to the filing of this proceedings nor replied to the statutory noticed sent by the Operational Creditor. The application filed by the Operational Creditor under Section 9 of the Insolvency Bankruptcy Code, 2016 for initiating Corporate Insolvency Resolution Process against the Corporate Debtor, is hereby admitted - Moratorium declared.

Issues Involved:
1. Whether the petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 is maintainable.
2. Whether there exists an operational debt and default by the Corporate Debtor.
3. Whether there are any pre-existing disputes between the parties.
4. The validity of the termination of the Memorandum of Understanding (MoU) by the Corporate Debtor.
5. The appointment of the Interim Resolution Professional (IRP).

Issue-wise Detailed Analysis:

1. Maintainability of the Petition:
The petition was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. The Operational Creditor complied with all procedural formalities, including filing an affidavit under Section 9(3)(b), and the petition was complete in all respects. The tribunal found the petition maintainable and deserving of admission.

2. Existence of Operational Debt and Default:
The Operational Creditor provided storage facilities to the Corporate Debtor as per the MoU dated 23rd August 2017, with a monthly consideration of Rs. 16,19,692/-. The Corporate Debtor failed to pay the monthly charges from December 2019, resulting in an unpaid operational debt of Rs. 4,58,20,473/-. A statutory demand notice was issued on 8th September 2021, but the Corporate Debtor did not respond or raise any disputes. The tribunal was convinced that there was an operational debt and default by the Corporate Debtor.

3. Pre-existing Disputes:
The Corporate Debtor argued that there were pre-existing disputes, including issues with the ingress and egress to the land due to actions by Kolkata Port Trust and the claim that the Operational Creditor had not obtained permission for subletting. However, the tribunal found these arguments unconvincing and without evidence. The tribunal noted that the Corporate Debtor did not raise any disputes prior to the filing of the proceedings nor replied to the statutory notice. Thus, the tribunal concluded that there were no pre-existing disputes.

4. Termination of the MoU:
The Corporate Debtor claimed to have terminated the MoU by a letter dated 6th January 2020, citing failure by the Operational Creditor to pay lease rent to Kolkata Port Trust. However, the tribunal found no evidence that the notice of termination was served upon the Operational Creditor. The tribunal also noted that the Corporate Debtor continued to acknowledge its obligations under the MoU, as evidenced by its letter dated 19th December 2019 agreeing to pay 50% of the property tax. Therefore, the tribunal did not accept the termination of the MoU as valid.

5. Appointment of Interim Resolution Professional (IRP):
The tribunal appointed Mr. Bijay Murmuria as the Interim Resolution Professional (IRP), as proposed by the Operational Creditor. The IRP was directed to convene a meeting of the Committee of Creditors and submit a resolution plan within 105 days from the insolvency commencement date. The Operational Creditor was directed to deposit Rs. 1,00,000/- with the IRP for preliminary expenses and fees.

Order:
The tribunal admitted the application filed by the Operational Creditor under Section 9 of the Insolvency & Bankruptcy Code, 2016, and declared a moratorium in accordance with Sections 13 and 15 of the IBC, 2016. The moratorium prohibits the institution or continuation of suits, transferring of assets, and recovery actions against the Corporate Debtor. The tribunal also directed the IRP to make a public announcement and call for the submission of claims, and to convene a Committee of Creditors to evolve a resolution plan. The matter was listed for filing of the Progress Report on 31/08/2022.

Conclusion:
The tribunal found the petition maintainable, established the existence of an operational debt and default, dismissed claims of pre-existing disputes, invalidated the termination of the MoU by the Corporate Debtor, and appointed an IRP to proceed with the CIRP.

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