2020 (9) TMI 474 - Tri - Insolvency and Bankruptcy

Maintainability of petition - initiation of CIRP - Corporate Debtor has committed default for a total outstanding amount - Petitioner and Respondent submit that the Parties are inclined to settle the matter, however, the Respondent has not provided a settlement schedule acceptable to the Petitioner - HELD THAT - As the parties have come forward to settle the matter, and the Respondent is seeking a staggered schedule of payments as terms of settlement, at this point we would not go into the merits of the claim or the dispute, and allow time to the Petitioner and the Respondent to settle the matter mutually. If the settlement fails, the Petitioner would be at liberty to file a fresh petition for admission - the Respondent's plea that it be given some more time to negotiate/settle/clear the debt needs to be accepted, and the Respondent/Corporate Debtor be directed to settle the debt at the earliest in consultation with the Petitioner/Operational Creditor, considering the amount involved and the present economic scenario, despite the argument of the Petitioner that it is a fit case for admission. Petition is disposed of by directing the Respondent/Corporate Debtor to repay the debt or the amount as settled with the Petitioner within a period of four months, failing which, the Petitioner would be at liberty to file a fresh petition for admission.

Summary

Issues:
1. Initiation of Corporate Insolvency Resolution Process under Section 9 of IBC, 2016.
2. Default committed by the Corporate Debtor for a specific outstanding amount.
3. Dispute regarding payment and settlement between the Operational Creditor and the Corporate Debtor.

Analysis:
1. The judgment pertains to a petition filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 by ACC Limited against Vishwas Concrete Products Private Limited seeking initiation of Corporate Insolvency Resolution Process due to a default in payment amounting to ?1,31,31,402 along with interest. The petition included relevant documents such as invoices, balance confirmation letters, demand notices, and affidavits to support the claim of default by the Operational Creditor.

2. The Operational Creditor alleged that the Corporate Debtor issued a dishonored cheque, admitted to a significant outstanding amount, and refused to acknowledge a demand notice. The Corporate Debtor, on the other hand, denied the allegations, claiming the existence of a dispute to be referred to arbitration. The Corporate Debtor argued that certain invoices were fabricated, and there was a mutual agreement for setoff, which the Operational Creditor failed to honor.

3. During the hearing, both parties expressed willingness to settle the matter amicably. The Respondent sought time to clear the debt through staggered payments, which was accepted by the Tribunal. The Tribunal refrained from delving into the merits of the claim or dispute, allowing the parties time to negotiate a settlement. The judgment directed the Corporate Debtor to repay the debt within four months, failing which the Operational Creditor would be at liberty to file a fresh petition for admission, emphasizing the importance of settling the debt considering the economic scenario.

This detailed analysis of the judgment highlights the key issues involved, the arguments presented by both parties, and the Tribunal's decision to allow time for settlement before taking further action.