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2021 (6) TMI 571 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - time limitation - HELD THAT - Though there is no specific date of default mentioned, the same issue was considered by the bench and vide order dated 30.01.2020, the bench has decided that the matter is within limitation - Accordingly, demand notice was issued on 16.09.2017 and the present application is filed on 21.05.2019. Hence the application is not time barred and filed within the period of limitation. The registered office of corporate debtor is situated in Delhi and therefore this Tribunal has jurisdiction to entertain and try this application - The 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. Existence of debt and dispute or not - HELD THAT - There exists an operational debt which is due and payable by the corporate debtor. An objection has been raised by the corporate debtor, with regards the service of the demand notice, which is not maintainable, as the demand notice was served at the registered office of the corporate debtor as per the MCA records and was returned with the remark 'refused to accept', which is considered as good service in the eyes of law as held by the Hon'ble Supreme Court time and again. Further, disputes have also been raised by the corporate debtor, but there is a clear admission of debt of more than 1 Lakh in reply filed by the corporate debtor in August 2019. The application is admitted - moratorium declared.
Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016. 2. Service of Demand Notice and Compliance with Rules. 3. Alleged Pre-Existing Dispute and Limitation Period. 4. Admission of Debt and Default. 5. Appointment of Interim Resolution Professional (IRP) and Moratorium. Detailed Analysis: 1. Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016: The application was filed by the authorized representative of Schneider Electric India Pvt. Ltd. to initiate CIRP against Apex Electro Devices Pvt. Ltd. The applicant, a manufacturer of electrical equipment, supplied goods to the corporate debtor, who failed to make payments against 366 invoices from March 2015 to December 2016. Despite assurances and legal notices, no payment was received, leading to the filing of the application under Section 9 of the Insolvency and Bankruptcy Code, 2016. 2. Service of Demand Notice and Compliance with Rules: The corporate debtor contested the service of the demand notice, claiming it was not served as per the mandatory provisions. The applicant countered that the notice was refused at the registered office, which constitutes good service under the law. The tribunal supported this view, citing the Hon'ble Supreme Court's stance that refusal to accept a notice is considered valid service. 3. Alleged Pre-Existing Dispute and Limitation Period: The corporate debtor raised objections regarding pre-existing disputes over short supply, damaged goods, and interest claims. The tribunal noted that disputes raised were related to transactions from 2012-2013, whereas the invoices in question were from 2015-2016. The tribunal relied on several precedents, including "Manjeet Kaur Sran Vs. Tricolite Electrical Industries Limited" and "Innoventive Industries Ltd. Vs. ICICI Bank," to conclude that the application was within the limitation period and the disputes did not negate the existence of the debt. 4. Admission of Debt and Default: The tribunal observed that the corporate debtor admitted a liability of ?1,42,87,068.32 in their reply, which exceeds the threshold of ?1 Lakh for initiating CIRP. The tribunal cited the "Innoventive Industries Ltd. Vs. ICICI Bank" judgment, emphasizing that the Code is triggered by a default of ?1 Lakh or more, and once a default is established, the application must be admitted unless incomplete. 5. Appointment of Interim Resolution Professional (IRP) and Moratorium: The tribunal appointed Mr. Akhil Ahuja as the IRP and imposed a moratorium as per Section 14 of the Code, prohibiting certain actions against the corporate debtor. The operational creditor was directed to deposit ?2 lacs with the IRP for expenses. The tribunal ensured compliance with procedural requirements, including communication of the order to relevant parties and authorities. Conclusion: The tribunal admitted the application for initiating CIRP against the corporate debtor, appointed an IRP, and imposed a moratorium. The objections raised by the corporate debtor regarding the service of the demand notice, pre-existing disputes, and limitation were dismissed, establishing the existence and default of the operational debt.
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