2021 (4) TMI 769 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - Operational Creditor - pre-existing dispute or not - HELD THAT - No disputes were raised as covered under section 5(6) of the Code which provides that the dispute includes a suit or arbitration proceedings relating to-(a) the existence of the amount of debt; (b) the quality of goods or service; or (c) the breach of a representation or warranty . Therefore, there is no pre-existing dispute before issuance of the demand notice to the corporate debtor. Further, there is undisputed amount of ₹ 22,17,175/- which has already been admitted by the Corporate debtor in their reply to the demand notice dated 12.09.2019 also in addition raised dispute to wriggle out of applicant s claim. The corporate debtor has not placed on record any document which exhibits the plausible dispute between the parties. It can be thus inferred that there is no merit in the so-called dispute raised by the corporate debtor in reply to the application. This leaves no doubt that the default has occurred with respect to the payment of the operational debt of the applicant. From the records and the reply of the corporate debtor to the present application, it cannot be inferred that dispute of the corporate debtor is of genuine nature, which merely is a moonshine dispute. The registered office of corporate debtor is situated in Delhi and therefore this Tribunal has jurisdiction to entertain and try this application. The date of default as per Form V occurred on 17.08.2018 and the application is filed on 18.10.2019, hence the debt is not time barred and the application is filed within the period of limitation. In the given facts and circumstances, the present application is complete and the Applicant is entitled to claim its dues, which remain uncontroverted by the Corporate Debtor, establishing the default in payment of the operational debt beyond doubt. Application admitted - moratorium declared.

Summary

Issues:
Application under section 9 of Insolvency and Bankruptcy Code, 2016 for initiation of Corporate Insolvency process against a private limited company. Dispute over outstanding payment for supply of Solar Photovoltaic Pump Sets. Jurisdiction of the Tribunal to entertain the application. Time bar for filing the application. Appointment of Insolvency Resolution Professional. Moratorium following the admission of the application.

Detailed Analysis:

1. Application under section 9 of IBC, 2016:
The application was filed by Natraj Proteins Limited against Claro Energy Private Limited for initiating the Corporate Insolvency process due to irregular payment issues. The applicant alleged non-payment of a significant amount by the corporate debtor despite various assurances and demands.

2. Dispute over outstanding payment:
The corporate debtor disputed the outstanding amount, claiming over-invoicing and non-receipt of payments from the end customer. The applicant denied the allegations and provided evidence of the debt, including demand notices and communication records.

3. Jurisdiction of the Tribunal:
The Tribunal established its jurisdiction to entertain the application based on the location of the corporate debtor's registered office in Delhi. This jurisdictional aspect was crucial for the Tribunal to proceed with the case.

4. Time bar for filing the application:
The Tribunal determined that the application was filed within the period of limitation, as the date of default occurred on 17.08.2018, and the application was submitted on 18.10.2019, ensuring it was not time-barred.

5. Appointment of Insolvency Resolution Professional:
The Tribunal named Mr. Rajesh Lohia as the Interim Resolution Professional, subject to certain conditions and disclosures. The Operational Creditors were directed to deposit a sum with the IRP to meet expenses related to the insolvency resolution process.

6. Moratorium following admission of the application:
Upon admission of the application, a moratorium was imposed on the corporate debtor as per the provisions of Section 14(1) of the Code, prohibiting certain actions during this period. The specific terms and conditions of the moratorium were outlined for compliance by the parties involved.

This detailed analysis covers the key issues addressed in the legal judgment by the National Company Law Tribunal, New Delhi, regarding the application under the Insolvency and Bankruptcy Code, 2016, and the subsequent actions and decisions taken by the Tribunal in response to the dispute between the parties involved.