2018 (7) TMI 757 - Tri - Insolvency and Bankruptcy

Corporate insolvency process - Held that - The acknowledgement of the debt is available in the accounts of the petitioner since 2008-09 upto 31. 03. 2016. As already discussed above, the respondent s contention that the financial statement of respondent placed on record by the petitioner has been made in connivance with the ex-employee of the respondent is not supported by any proof and moreover, the Balance Sheet as at March 2016 filed by the petitioner at Annexure A-11 of the application is signed by the Chartered Accountant as well as two Directors. Therefore, the respondent s explanation is found without any basis. The respondent has sought to rely upon the Balance Sheet as in March 2017 (Exh. R-3) and has stated that no dues to the petitioner are shown therein. However, the respondent has not filed on record any details to reconcile the account of the petitioner shown in the Balance Sheet of the respondents of March 2016 and March 2017. The deletion of the Trades Payable to Mahavir Traders in the Balance Sheet of March 2017 appears to be an afterthought by the respondents to remove evidence of the Trades Payable of Mahavir Traders in the respondents accounts. In view of the foregoing discussion, the respondent s contention that the claim is time barred cannot be accepted. The petitioner, being an operational creditor, is not bound to propose the name of the Resolution Professional to be appointed as Interim Resolution Professional. The petitioner, however, has filed written communication in Form 2 (Annexure A-10 of application and Annexure A-2 of diary No. 2831 dated 11. 12. 2017) from Mr. Anjum Goyal, registered Resolution Professional having allotted Registration No. IBBI/IPA-002/IP-N00251/2017- 18/10765, giving all the necessary particulars as required in the form and that he is presently not serving as IRP/RP/Liquidator in any proceedings. It is also stated by him that there are no proceedings pending against him with the Insolvency and Bankruptcy Board of India (IBBI) or ICSI. Having perused the form, we find the same to be in order. We find that all the compliances have been made and the application is complete and the petition deserves to be admitted.

Summary

Issues Involved:
1. Existence of Debt and Default
2. Compliance with Insolvency and Bankruptcy Code (IBC) Requirements
3. Dispute Regarding Delivery of Goods
4. Timeliness of the Claim
5. Appointment of Interim Resolution Professional (IRP)
6. Declaration of Moratorium

Detailed Analysis:

1. Existence of Debt and Default:
The petitioner, a partnership firm engaged in trading yarn, filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, against the corporate debtor, Ajay Knitwears and Fabrics Private Limited. The debt arose from the sale of yarn, and the petitioner provided various invoices and a demand notice dated 11.08.2017. The corporate debtor acknowledged a debt of ?8,98,285 in its financial statement for the year ending 31.03.2016, which the petitioner argued as an explicit acknowledgment of the debt.

2. Compliance with Insolvency and Bankruptcy Code (IBC) Requirements:
The petitioner complied with all procedural requirements under Sections 8 and 9 of the Code, including sending a demand notice, filing the application in the prescribed form, and providing necessary affidavits and certificates from financial institutions. The Tribunal confirmed that the petition was filed after the expiry of the 10-day period from the date of delivery of the demand notice, fulfilling the requirements of Section 9(1) to (3) of the Code.

3. Dispute Regarding Delivery of Goods:
The corporate debtor contended that no goods were delivered against the invoices and requested proof of delivery through letters dated 20.06.2009 and 24.07.2010. The Tribunal found these letters to be created documents unsupported by any proof, as they lacked dispatch records and were sent to an incorrect address. The Tribunal dismissed the corporate debtor's argument as spurious, hypothetical, and illusory, emphasizing that the dispute raised was not genuine.

4. Timeliness of the Claim:
The corporate debtor argued that the claim was time-barred. However, the Tribunal noted that the acknowledgment of the debt in the financial statement for the year ending 31.03.2016 extended the limitation period. The Tribunal also observed that the deletion of the trade payable in the balance sheet for March 2017 appeared to be an afterthought. Thus, the Tribunal concluded that the claim was not time-barred.

5. Appointment of Interim Resolution Professional (IRP):
The petitioner proposed Mr. Anjum Goyal as the Interim Resolution Professional (IRP), providing the necessary written communication and confirming that there were no pending disciplinary proceedings against him. The Tribunal found the proposal and documentation to be in order.

6. Declaration of Moratorium:
The Tribunal admitted the petition and declared a moratorium under Section 14(1) of the Code, prohibiting the institution or continuation of suits, transferring or disposing of assets, and actions to foreclose or recover property. The moratorium would remain effective until the completion of the corporate insolvency resolution process or until the Tribunal approved a resolution plan or ordered liquidation.

Conclusion:
The Tribunal concluded that the petitioner had complied with all necessary requirements and that the corporate debtor's dispute was not genuine. The petition was admitted, and a moratorium was declared, with the matter listed for the formal appointment of the Interim Insolvency Resolution Professional.