2020 (3) TMI 1213 - AT - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - section 9 of the Insolvency and Bankruptcy Code 2016 - HELD THAT - There is no dispute that the address of the notice was proper address of the registered office of the corporate debtor. The operational creditor did what was expected from it under the law and corporate debtor merely by putting up hands and saying that I did not receive would not be sufficient. The Adjudicating Authority also dealt with this aspect and found that notice was duly served. We also hold that the notice was duly served as required by the law. What corporate debtor could do is to show that there is a pre-existing dispute or that the dues are not payable in law or in fact. It is not the case of the appellant-corporate debtor that the corporate debtor was or is ready to pay the dues claimed in default and if section 8 notice had been received it would have paid the dues and avoided the invoking of the IBC. There is no material to show any preexisting dispute. What the corporate debtor is trying to say is that there were certain transactions between the operational creditor and corporate debtor along with Univercell and MPS and thus the Adjudicating Authority should look into all those transactions and on such basis it is tried to be said that the dues are not payable - The attempt of the corporate debtor to push through mutual tripartite agreement (page 80) did not succeed as operational creditor did not join the same. If anything the document would rather show acceptance of liability by the corporate debtor. Even if the parties and/or their sister concerns are indulging in various transactions and deals when there is an independent transaction of sale giving rise to dues and there is default in payment of the same that indeendent transaction cannot be doubted or put into shadows due to other dealings between the parties and/or their sister concerns. Section 9 application was properly admitted - Appeal dismissed.

Issues Involved:

1. Admission of Section 9 application under the Insolvency and Bankruptcy Code, 2016 (IBC).
2. Claim of outstanding dues by the operational creditor.
3. Delivery and acceptance of goods.
4. Alleged pre-existing dispute and cross-dealings.
5. Service of Section 8 notice.
6. Lifting of the corporate veil.
7. Validity of the deed of assignment and mutual tripartite agreement.
8. Arbitration proceedings and their impact on the current case.

Issue-wise Detailed Analysis:

1. Admission of Section 9 application under the Insolvency and Bankruptcy Code, 2016 (IBC):
The operational creditor, Optiemus Infracom Ltd., filed an application under Section 9 of the IBC against Indus Mobile Distribution P. Ltd., which was admitted by the Adjudicating Authority (National Company Law Tribunal, Single Bench, Chennai) on March 28, 2019. The appeal was filed by a shareholder and director of the corporate debtor against this order.

2. Claim of outstanding dues by the operational creditor:
The operational creditor claimed ?27,79,59,587.21 as outstanding dues for mobile handsets and accessories sold to the corporate debtor from February 25, 2015, to March 20, 2018. The operational creditor provided invoices and delivery documents to substantiate the claim. A cheque issued by the corporate debtor for ?27,79,59,587 bounced, leading to the issuance of a notice under Section 8 of the IBC.

3. Delivery and acceptance of goods:
The operational creditor delivered the goods to Univercell Telecommunications India P. Ltd., a sister concern of the corporate debtor, as per the arrangement between the parties. The corporate debtor acknowledged the delivery of mobile handsets and accessories to its sister concern.

4. Alleged pre-existing dispute and cross-dealings:
The appellant argued that the goods delivered to Univercell were later sold to MPS Telecom Retail P. Ltd., a subsidiary of the operational creditor, and thus, the liability was disputed. However, the operational creditor contended that the asset purchase agreement between Univercell and MPS did not include the stock transferred and was already under arbitration.

5. Service of Section 8 notice:
The operational creditor sent the Section 8 notice to the registered address of the corporate debtor through Blue Dart Courier and the Postal Department, with delivery reports placed before the Adjudicating Authority. The corporate debtor claimed non-receipt of the notice, but the Adjudicating Authority found the notice was duly served.

6. Lifting of the corporate veil:
The appellant referred to the judgment in ArcelorMittal India P. Ltd. v. Satish Kumar Gupta, arguing that the corporate veil should be lifted to examine cross-dealings between the parties. However, the Tribunal found no pre-existing dispute or improper conduct that warranted lifting the veil.

7. Validity of the deed of assignment and mutual tripartite agreement:
The appellant referred to a deed of assignment and a mutual tripartite agreement involving the corporate debtor, MPS Telecom, and the operational creditor. The operational creditor did not sign the tripartite agreement, rendering it incomplete. The Tribunal found that the incomplete document did not affect the liability of the corporate debtor.

8. Arbitration proceedings and their impact on the current case:
The arbitration proceedings regarding the asset purchase agreement between Univercell and MPS started after the Section 9 application was filed. The Tribunal held that the arbitration proceedings did not create a pre-existing dispute affecting the current case.

Conclusion:
The Tribunal dismissed the appeal, finding no substance in the arguments raised by the corporate debtor. The Section 9 application was properly admitted, and the operational creditor's claim was upheld. The Tribunal agreed with the Adjudicating Authority's decision and found that the corporate debtor was liable for the outstanding dues.

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