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2018 (1) TMI 1249 - Tri - Insolvency and BankruptcyCorporate insolvency process - existence of debt - Held that - The onus is on the Operational Creditor under IBC, 2016 to establish that the debt is owed in absolute terms and that it should not or cannot be assailed by the Corporate Debtor in any manner other than being it illusory or moonshine. If it is otherwise than it gives rise to a plausible contention to be put up by the Corporate Debtor and the same cannot be considered as moonshine or illusory. Thus taking into consideration all the above and as the notice of demand dated 26.04.2017 not being supported by proper authorization, as well as the application under Section 9 of IBC, 2016 as filed on behalf of the Operational Creditor not having been filed by persons who are authorized to file as per Board Resolution dated 07.02.2017 and further in view of existence of a plausible dispute between the parties and cannot be decided in a summary manner, this application stands dismissed.
Issues Involved:
1. Limitation period applicability under IBC, 2016. 2. Authorization to issue demand notice under Section 8 of IBC, 2016. 3. Existence of dispute regarding the operational debt. 4. Compliance with Section 9(3)(c) of IBC, 2016. Detailed Analysis: 1. Limitation Period Applicability under IBC, 2016: The Corporate Debtor contended that the claim was barred by limitation under the Limitation Act, 1963. However, the Tribunal referred to judgments by the Hon'ble NCLAT, particularly in the case of Black Pearl Hotels (P.) Ltd. v. Planet M Retail Ltd., where it was held that the Limitation Act, 1963 does not apply to IBC, 2016. The Tribunal reiterated that the right to apply under IBC, 2016 accrues only from 1st December 2016, and thus, the plea of limitation raised by the Corporate Debtor was not considered. 2. Authorization to Issue Demand Notice under Section 8 of IBC, 2016: The Corporate Debtor argued that the demand notice issued under Section 8 was not signed by an authorized person. The Tribunal examined the authorization of Mr. Satish Kumar K, who signed the notice, and found that the authorization letter was dated 22.08.2017, which was posterior to the date of the notice (24.04.2017). The Tribunal cited the judgment in Shriram EPC Ltd. v. Rio Glass Solar SA, emphasizing that the notice must be signed by a person holding a position with or in relation to the Operational Creditor and duly authorized by the Board of Directors. Since Mr. Satish Kumar K was not authorized at the time of issuing the notice, the Tribunal found the notice invalid. 3. Existence of Dispute Regarding the Operational Debt: The Corporate Debtor raised multiple grounds indicating the existence of a dispute: - Inconsistencies in the amounts claimed in different communications. - Discrepancies in the invoices and payments. - The project was not completed, and the Operational Creditor had admitted to only partial execution. The Tribunal noted these inconsistencies and referenced the Mobilox Innovations (P.) Ltd. v. Kirusa Software (P.) Ltd. case, which stated that if a plausible contention requiring further investigation exists, the application should be rejected. The Tribunal concluded that there was a genuine dispute, making the summary jurisdiction inappropriate for resolving the matter. 4. Compliance with Section 9(3)(c) of IBC, 2016: The Corporate Debtor argued that the Operational Creditor failed to comply with Section 9(3)(c) of IBC, 2016, which requires a certificate from the financial institution confirming the non-payment of the operational debt. The Tribunal found that the certificates produced by the Operational Creditor were inconsistent with the admitted payments and claims. The Tribunal held that the onus is on the Operational Creditor to establish the debt unequivocally, which was not met in this case. Conclusion: The Tribunal dismissed the application on the grounds of improper authorization for issuing the demand notice, existence of a plausible dispute regarding the operational debt, and non-compliance with Section 9(3)(c) of IBC, 2016. The Tribunal emphasized that the dismissal does not preclude the Operational Creditor from seeking other legal remedies.
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