2019 (6) TMI 966 - Tri - Insolvency and Bankruptcy

Initiation of Corporate Insolvency Resolution Process - Corporate Debtor - Corporate Debtor allegedly committed default in paying operational debt - whether there exist a dispute about the amount claimed which require investigation and adjudication? HELD THAT - The Operational Creditor did not disclose these facts in his application filed under Section 9 of Insolvency and Bankruptcy Code, 2016. But the Operational Creditor claimed from the Corporate Debtor exact same amount pertained to same period for which he had made allegations of cheating etc. This itself shows that there is a serious dispute pending about the amount claimed by the Operational Creditor against the Corporate Debtor - there exist dispute about the amount of debt, hence, this application is not maintainable in view of the provision of Section 9(5)(II)(d) of I B Code. However it has to be seen whether the Corporate Debtor by way of reply of demand notice under Section 8 of Insolvency and Bankruptcy Code, 2016 has brought this fact to the notice of the Corporate Debtor. The Corporate Debtor did not say anything in his affidavit-in-reply that he has sent notice etc. No copy of reply is produced on record. But the Operational Creditor himself admitted this fact stating that on 13.04.2018, he received reply from the Corporate Debtor raising frivolous and baseless dispute (point 8 Part V of the application under Section 9 of Insolvency and Bankruptcy Code, 2016). This makes it clear that the Corporate Debtor has brought to the notice of the Operational Creditor pendency of dispute about the amount of debt as claimed by him. Thus, there exists serious dispute pending in between the Operational Creditor and the Corporate Debtor about the amount of debt, which require proper adjudication - this application is not maintainable under Section 9(5)(II)(d) of I B Code. Petition dismissed.

Summary

Issues Involved:
Application under Section 9 of Insolvency and Bankruptcy Code, 2016 for Corporate Insolvency Resolution Process (CIRP) due to default in paying operational debt. Dispute regarding the amount claimed by the Operational Creditor against the Corporate Debtor.

Analysis:

Issue 1: Default in Paying Operational Debt
The Operational Creditor, M/s Anjani Gases, filed an application under Section 9 of the Insolvency and Bankruptcy Code against the Corporate Debtor, M/s B.P. Projects Pvt. Ltd., for defaulting on payment of operational debt amounting to ?1,45,74,133. The Operational Creditor supplied Industrial Oxygen Cylinders, Carbon dioxide Cylinders, and LPG Cylinders to the Corporate Debtor between 15.06.2014 to 31.05.2016, with an outstanding amount of ?1,10,23,431 along with interest. Despite repeated demands and a notice sent under Section 8 of the Code, the Corporate Debtor failed to pay, leading to the initiation of CIRP.

Issue 2: Dispute Regarding Amount Claimed
The Corporate Debtor contested the claim, stating that there was a serious dispute regarding the amount owed. They alleged that the Operational Creditor had been overpaid by ?5,56,889 and raised issues about holding charges, delivery charges, and the lack of tax invoices. The Corporate Debtor argued that the dispute required adjudication through a Civil Suit due to the complexities involved. They also highlighted the Operational Creditor's filing of false FIRs against them, challenging the FIR through a Writ Petition.

Judgment
After reviewing the evidence and arguments presented, the Tribunal found that a serious dispute existed between the Operational Creditor and the Corporate Debtor regarding the amount of debt claimed. The Corporate Debtor had brought this dispute to the notice of the Operational Creditor, and the existence of a genuine dispute was confirmed. As per the provisions of the Insolvency and Bankruptcy Code, the application under Section 9 was deemed not maintainable. Consequently, the Tribunal rejected the petition, emphasizing the need for proper adjudication of the dispute through appropriate legal channels.