2021 (2) TMI 86 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - record of contractual agreement or not - copy of invoices not produced - nature of professional services rendered by the Operational Creditor not clear - proof of service of demand notice ot provided - HELD THAT - There is no record of any contractual arrangement between the Operational Creditor and the Corporate Debtor - Copy of the invoice has not been attached. What has been attached at p.49 is only a calculation sheet mentioning the principal amount of the invoice, the interest calculation. There is no record of the invoice having been served on the Corporate Debtor - There is no record of what professional services have been rendered by the Operational Creditor - Proof of service of Demand Notice has not been attached to the Petition. However, proof of posting in the form of Speed Post receipt No.EM779732264IN dated 12.04.2019 has been attached as Exhibit D at p.59. The tracking receipt attached at p.51 only records that Item Dispatched. This is not enough to satisfy the requirement of section 9(5)(ii)(c) of the IBC read with rule 5(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, both of which use the term delivered. The pre-requisites of section 9 of the IBC have not been satisfied. Therefore, the present petition fails and therefore, the same is rejected in terms of section 9(5)(ii)(c) of the IBC.

Summary

Issues:
- Initiation of Corporate Insolvency Resolution Process under section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC).
- Jurisdiction of the National Company Law Tribunal Mumbai Bench.
- Failure of the Corporate Debtor to make payment leading to the petition.
- Lack of contractual arrangement between the parties.
- Insufficient documentation and proof provided by the Operational Creditor.
- Rejection of the petition under section 9(5)(ii)(c) of the IBC.

Initiation of Corporate Insolvency Resolution Process:
The Tribunal dealt with a Company Petition under section 9 of the IBC filed by an Operational Creditor seeking to initiate Corporate Insolvency Resolution Process against a Corporate Debtor for non-payment of a specified amount. The Operational Creditor alleged that the Corporate Debtor failed to make payment of a principal sum and interest, leading to the petition.

Jurisdiction of the Tribunal:
The Corporate Debtor, a private company, was incorporated under the Companies Act, 1956, with its registered office in Maharashtra. The Tribunal established its jurisdiction to handle the petition based on the Corporate Debtor's incorporation in the State of Maharashtra.

Failure of the Corporate Debtor:
The Operational Creditor raised invoices for professional services provided to the Corporate Debtor, granting a credit period for payment. Despite serving a Demand Notice, the Corporate Debtor did not respond, indicating a lack of dispute regarding the debt.

Lack of Contractual Arrangement and Insufficient Documentation:
The Tribunal noted the absence of a documented contractual arrangement between the parties, missing invoice copies, and unclear details regarding the professional services rendered. Additionally, the proof of service of the Demand Notice was found to be inadequate, failing to meet the legal requirements under the IBC.

Rejection of the Petition:
Due to the failure to satisfy the prerequisites of section 9 of the IBC, including insufficient documentation and proof, the Tribunal rejected the petition under section 9(5)(ii)(c) of the IBC. The decision emphasized that the rejection should not prejudice the petitioner's right to seek legal recourse through other judicial forums.

This detailed analysis of the judgment highlights the key issues addressed by the Tribunal in the context of the Insolvency and Bankruptcy proceedings, emphasizing the importance of meeting legal requirements and providing adequate documentation in such cases.