2020 (5) TMI 348 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - time limitation - HELD THAT - A letter was sent on 23-6-2016 to Quickdel informing that as per the account statement as on 31-3-2016, ₹ 50,02,846 is receivable from Quickdel and that on 2-8-2016, confirmation was received that as on 31-3-2016, Quickdel owed an amount of ₹ 42,49,251 to Grey Orange. Relevant email from Ms. Varsha Goel, Accounts Executive of Quickdel and copy of the written communication are stated to be filed at Annexures-E and F of the petition. In the reply, Quickdel has stated that after checking the record, it is submitted that no such letter even signed acknowledged by Grey Orange or its employee as alleged as per the records maintained by Quickdel and the same is forged and fabricated. In the absence of any evidence to support the contention, the genuineness of the emails and the confirmation (Annexure-F of the petition) is accepted - it is held that Quickdel has not been able to prove that a dispute truly exists in fact. The dispute sought to be raised is spurious, hypothetical and illusory and assertions of fact unsupported by evidence. The dispute sought to be raised is therefore, rejected. Time Limitation - HELD THAT - Section 238A of the Code inter alia provides that the provisions of the Limitation Act, 1963 shall, as far as may be, apply to the proceedings before the Adjudicating Authority. The specific dates of default are not given in Part IV of the application. We have therefore, to accept the averment of the learned counsel for Quickdel that the limitation starts from 14-9-2015. The effect of the acknowledgement dated 2-8-2016 (Annexure-F of the application) is required to be examined - In the present case the acknowledgement of liability in writing is made before the expiration of the period for filing suit or application in respect of the claimed amount of ₹ 42,49,251. The acknowledgement dated 2-8-2016 is signed by Ms. Varsha Goel, Accounts Executive of Quickdel. No specific averment has been made that Ms. Varsha Goel, Accounts Executive was not authorized to sign the acknowledgement. Therefore, as per Section 18 of the Limitation Act, a fresh period of limitation is to be computed from the time when the acknowledgement was signed - the plea that the application under section 9 is not filed within limitation is not accepted. Application admitted - moratorium declared.

Summary

Issues Involved:

1. Initiation of Corporate Insolvency Resolution Process (CIRP)
2. Existence of operational debt and default
3. Pre-existing dispute
4. Limitation period for filing the application
5. Appointment of Interim Resolution Professional (IRP)
6. Declaration of Moratorium

Detailed Analysis:

1. Initiation of Corporate Insolvency Resolution Process (CIRP):
The application was filed by Grey Orange India Pvt. Ltd. under Section 9 of the Insolvency & Bankruptcy Code, 2016 for initiation of CIRP against Quickdel Logistics Pvt. Ltd. The application was supported by an affidavit and a Board resolution authorizing the filing. The Tribunal confirmed jurisdiction based on the registered address of Quickdel.

2. Existence of Operational Debt and Default:
Grey Orange provided warehouse automation systems to Quickdel and raised invoices that were not disputed. Quickdel acknowledged the debt multiple times, including through emails and a written confirmation on 2-8-2016, confirming an amount of ?42,49,251 as due. Legal notices for recovery were sent but remained unresponded. The Tribunal found that the operational debt was unpaid and default had occurred.

3. Pre-existing Dispute:
Quickdel argued that disputes existed from the inception of the agreement, citing various communications and a complaint to the Economic Offences Wing. However, the Tribunal found that the disputes were not genuine. The emails acknowledging successful automation and the debt were accepted as valid. Quickdel's claims of pre-existing disputes were deemed spurious, hypothetical, and unsupported by evidence.

4. Limitation Period for Filing the Application:
The date of default was contested, with Quickdel arguing that the limitation started from 14-9-2015. However, the Tribunal held that the acknowledgment of debt on 2-8-2016 gave a fresh cause of action, making the application filed on 22-5-2019 within the limitation period as per Section 18 of the Limitation Act, 1963.

5. Appointment of Interim Resolution Professional (IRP):
Grey Orange did not propose an IRP. The Tribunal, following the guidelines and panel provided by the National Company Law Tribunal, appointed Mr. Somnath Gupta as the IRP. His credentials were verified, and there were no adverse findings against him.

6. Declaration of Moratorium:
The Tribunal declared a moratorium in terms of Section 14 of the Code, prohibiting suits, transferring assets, foreclosing security interests, and recovering properties occupied by the corporate debtor. Essential supplies to the corporate debtor were to continue during the moratorium period. The order of moratorium would remain effective until the completion of the CIRP or until the approval of a resolution plan or liquidation order.

Conclusion:
The Tribunal admitted the application for initiation of CIRP against Quickdel Logistics Pvt. Ltd., declared a moratorium, and appointed Mr. Somnath Gupta as the IRP. The Tribunal directed the IRP to manage the corporate debtor's affairs, constitute a Committee of Creditors, and submit regular progress reports.