2021 (2) TMI 203 - Tri - IBC

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT - The Applicant has filed its bank statement stating that the amount claimed or any part thereof, has not been received by the applicant nor had any person, on its behalf had received in any manner the amount due to them as required u/s. 9(3)(c) of I B Code. The Applicant has filed an affidavit in compliance of section 9(3)(b) - present application is filed on the Performa prescribed under Rule 6 of the Insolvency and Bankruptcy Code, 2016 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 r/w Section 9 of the code and is complete. Considering the documents on records and submissions made, it is clear that the default in payment of operation debt has occurred. However, a dispute with the regards the amount of debt has been raised - This leaves no doubt that the default has occurred for the payment of the operational debt for which the invoices were raised by the applicant and the so called dispute raised by the corporate debtor is merely a moonshine dispute. As per the judgment of Hon ble Supreme Court in the case of Mobilox Innovations Private Limited Vs. Kirusa Software Private Limited 2017 (9) TMI 1270 - SUPREME COURT it has been held that the dispute has to be genuine and not moonshine and the husk needs to be separated from the grain. The applicant is entitled to claim the dues which is still outstanding and has remained unpaid till date. Therefore, the applicant is admitted. Petition admitted - moratorium declared.

Summary

Issues involved:
1. Application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 for initiating Corporate Insolvency process against a Corporate Debtor.
2. Dispute regarding outstanding payment between the Applicant and the Corporate Debtor.
3. Appointment of Interim Resolution Professional and imposition of moratorium.

Analysis:

Issue 1: Application under Section 9 of IBC, 2016
The Applicant, a company involved in the supply of construction materials, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency process against the Corporate Debtor, who had outstanding dues amounting to &8377; 29,85,157.31. The Corporate Debtor had failed to clear the liability despite admission of the debt and receipt of multiple reminders and notices. The Tribunal found the application to be in compliance with the necessary provisions and admitted it for further proceedings.

Issue 2: Dispute over outstanding payment
The Corporate Debtor had raised a dispute regarding the outstanding amount, claiming that certain payments had been made from their sister concern and contending that interest was not payable as per the invoices raised by the Applicant. However, the Tribunal noted that the Corporate Debtor's contentions were not substantiated, and the Applicant had provided evidence to refute the claims made by the Corporate Debtor. The Tribunal held that the default in payment had occurred, and the dispute raised by the Corporate Debtor was deemed to be unsubstantiated, citing the judgment of the Supreme Court in the case of "Mobilox Innovations Private Limited Vs. Kirusa Software Private Limited."

Issue 3: Appointment of Interim Resolution Professional and moratorium
In light of the admitted default by the Corporate Debtor and the application being deemed valid, the Tribunal appointed an Interim Resolution Professional to oversee the insolvency proceedings. A moratorium was imposed on the Corporate Debtor as per Section 14(1) of the Code, prohibiting certain actions against the Corporate Debtor during this period. The Applicant was directed to deposit a sum of &8377; 2 lakhs with the Interim Resolution Professional to cover expenses, and further instructions were provided regarding the communication of the order to the parties involved, the IRP, IBBI, and ROC for compliance.

This comprehensive analysis covers the key issues addressed in the judgment, detailing the legal proceedings and outcomes related to the application filed under the Insolvency and Bankruptcy Code, 2016.