2023 (5) TMI 530 - AT - Insolvency and Bankruptcy

Initiation of CIRP - Operational Creditors - existence of debt and dispute or not - proof of service of Section 8 Notice - burden of proof lies on the Operational Creditor proving delivery of goods or not - whether the Petition has been duly signed and verified by the competent person? - HELD THAT - The said issue was analyzed and finding was returned by the Adjudicating Authority that petition which was filed by Mr. Debabrata Basu on behalf of the Operational Creditor who was territory sales manager, East Zone was fully competent. The submission which has been pressed by the Learned Counsel for the Appellant is that the Operational Creditor did not file any proof of delivery of goods along with Section 9 Application where it was onus on the Operational Creditor to bring on record the proof of delivery of goods. Learned Counsel for the Appellant however does not raise any argument regarding non-service of Section 8 Notice, looking to the fact that although Operational Creditor did not file any proof of service of Section 8 notice along with Section 9 Application but supplementary affidavit was filed before the Adjudicating Authority bringing on record the proof of service of Section 8 Notice. It is very relevant to notice that at no point of time prior to filing reply to Section 9 Application, corporate debtor issued any such letter or complaint informing the Operational Creditor about non-delivery of goods. The tax invoice which was noticed above clearly contains the details of vehicles with their numbers by which goods were delivered. The fact is that at no point of time, the Corporate Debtor even raised a little finger about non-delivery of goods. In Demand Notice as well as Section 9 Application, there was categorical pleadings of the Operational Creditor that there is no dispute or demur with regard to goods supplied. The statement was made due to attending facts and circumstances when after supply of goods no issue regarding supply or delivery was raised - Present is a case where Demand Notice was not even replied by the Corporate Debtor and the plea raised in the Reply by the Corporate Debtor regarding non-supply of goods has been held to be dishonest plea and moonshine plea hence the judgement of this Tribunal in above case does not come to any help to the Appellant. The Adjudicating Authority did not commit any error in admitting Section 9 Application. Debt and Default being fully proved and all defences raised by the Corporate Debtor were groundless, no error has been committed by the Adjudicating Authority admitting Section 9 Application - there are no merit in the appeal. Appeal dismissed.

Summary

Issues Involved:

1. Competency of the person signing and verifying the petition.
2. Proof of delivery of goods by the Operational Creditor.
3. Non-service of Section 8 Notice.
4. Settlement possibility between the parties.

Summary:

1. Competency of the Person Signing and Verifying the Petition:

The primary issue analyzed by the Adjudicating Authority was whether the petition had been duly signed and verified by a competent person. The Adjudicating Authority found that Mr. Debabrata Basu, who signed the petition on behalf of the Operational Creditor, was fully competent. The legal precedent cited included the Hon'ble Supreme Court's ruling in Dale and Carrington Invt. (P) Ltd. and Ors V. P.K. Prathapan & Ors., which established that a company acts through its Directors and authorized agents. It was concluded that the procedural defects should not defeat a just cause, and the petition was validly signed and verified.

2. Proof of Delivery of Goods:

The Appellant contended that the Operational Creditor failed to file any document proving delivery of goods. However, the Adjudicating Authority noted that the Operational Creditor had issued multiple letters requesting payment and had provided tax invoices indicating the delivery details. The Corporate Debtor did not raise any issue regarding non-delivery of goods until the Reply to the Section 9 Application. The Adjudicating Authority found that the defense of non-delivery was dishonest and moonshine, especially since the Corporate Debtor had taken tax input credit for the goods.

3. Non-service of Section 8 Notice:

Although the Operational Creditor initially did not file proof of service of Section 8 Notice, a supplementary affidavit was later submitted, bringing the proof on record. The Appellant did not raise this issue during the appeal, and the Adjudicating Authority accepted the supplementary affidavit as sufficient proof of service.

4. Settlement Possibility Between the Parties:

The Adjudicating Authority noted that the Corporate Debtor had repeatedly sought adjournments on the grounds of a possible settlement. However, no settlement was reached, and the proceedings continued. The Corporate Debtor's conduct, including statements about potential settlements, further undermined its defense regarding non-delivery of goods.

Conclusion:

The Adjudicating Authority concluded that the Section 9 Application was rightly admitted, with debt and default being fully proved. The defenses raised by the Corporate Debtor were found to be groundless. The appeal was dismissed, affirming the decision to admit the Section 9 Application.