2020 (5) TMI 175 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - Applicant had issued demand notice under section 8 of the Insolvency Bankruptcy Code, 2016 on the Corporate Debtor, to which no reply was given by the Corporate Debtor - debt due and payable - Existence of debt and dispute or not - time limitation. Whether dispute as raised by the Corporate Debtor is genuine or can be categorised as moonshine? - HELD THAT - The email conversation raising dispute is with respect to transactions between the Corporate Debtor and V. Together. The registration certificate filed by the Applicant vide dairy no. 2559/2019 reveals that V. Together is a HUF, different from M/s. V. One. The Corporate Debtor has nowhere stated, or objected to, or disputed, the invoices or its contents - Also, despite issuance of section 8 notice by the Applicant, the Corporate Debtor had neither raised any dispute nor made payment. There has been no initiative for setting dues after issuance of notice on the case filed before this Adjudicating Authority, which is the underlying rationale for prior issuance of demand notice under section 8 of the Insolvency Bankruptcy Code, 2016 - Defences of the Corporate Debtor are thus tenuous and vacillating. The Corporate Debtor can't hold ground on loose and shifting sands. Hence, the defence of dispute raised by the Respondent/Corporate Debtor is lame and without any forceful and pivotal foundation; which in the contextual backdrop can at best be categorised as moonshine defence. Thus, the belatedly raised dispute without establishing nexus and relevance cannot be termed as genuine dispute - this Tribunal is inclined to initiate Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor as envisaged under the provisions of IBC, 2016. Time limitation - HELD THAT - This Tribunal perused all the relevant papers and found them to be in order. The Registered Office of the Corporate Debtor is situated in Jaipur and therefore this Tribunal has jurisdiction to entertain and try this Application. The matter is also within the purview of Law of Limitation. Application admitted - moratorium declared.

Issues Involved:
1. Maintainability of the Petition
2. Existence of Operational Debt
3. Pre-existing Dispute
4. Limitation
5. Service of Demand Notice
6. Appointment of Interim Resolution Professional (IRP)

Issue-wise Detailed Analysis:

1. Maintainability of the Petition:
The Corporate Debtor contended that the Petition was filed in an individual capacity without documentary evidence of the signatory's relationship with the Applicant. However, the Tribunal noted that the Memo of Parties was amended to reflect Mr. Vijay Kumar Todi as the Proprietor of M/s. V. One, which was accepted by the Tribunal.

2. Existence of Operational Debt:
The Applicant claimed an outstanding amount of ?3,67,297/- for job-work performed. The Corporate Debtor argued that the supplies were rejected, and debit notes were issued. The Tribunal found that the Corporate Debtor did not dispute the invoices or their contents and that the debit notes lacked clear admittance by the Applicant. The Tribunal noted that the Form 26AS filed by the Applicant evidenced the deduction of TDS by the Corporate Debtor, supporting the Applicant’s claim.

3. Pre-existing Dispute:
The Corporate Debtor asserted a pre-existing dispute, citing rejected goods and debit notes. The Tribunal observed that the email communications and the registration certificate indicated that the disputes pertained to a different entity, "V. Together," not "M/s. V. One." The Tribunal concluded that the Corporate Debtor's defenses were inconsistent and lacked credibility, categorizing them as "moonshine defenses."

4. Limitation:
The Corporate Debtor argued that the Application was barred by limitation. The Tribunal found that the Corporate Debtor maintained a running account with the Applicant, and the relevant invoices were within the limitation period. Therefore, the Application was not barred by limitation.

5. Service of Demand Notice:
The Corporate Debtor contended that it did not receive the demand notice. The Tribunal found that the Applicant provided proof of delivery from the Department of Posts, and the presumption of delivery under the Indian Evidence Act, 1872, applied. The Tribunal concluded that the service of the demand notice was adequately addressed.

6. Appointment of Interim Resolution Professional (IRP):
The Tribunal appointed Ms. Anuradha Gupta as the IRP and directed her to take necessary steps under sections 15, 17, 18, 19, 20, and 21 of the Insolvency & Bankruptcy Code, 2016. The Tribunal also invoked the Moratorium under section 14 of the Code.

Conclusion:
The Tribunal initiated the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, finding that the defenses raised were not genuine and that the Applicant had established the existence of an operational debt. The Tribunal directed the IRP to take over the affairs of the Corporate Debtor and perform duties as required under the Code. The Application was admitted, and the Tribunal ordered the Operational Creditor to deposit ?2,00,000/- to the IRP's account within three days.

← Previous Next →