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2021 (8) TMI 1198 - 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 prior to the issuance of the Demand Notice - HELD THAT - The Corporate Debtor, throughout the averments made in the counter, seems to have only alleged that there exists a dispute between the parties. However, in order to substantiate the said averments made in the counter, no documentary evidence or proof has been filed by the Corporate Debtor to show that there exists a real dispute between the parties. As per the contention of the Corporate Debtor, if the materials supplied by the Operational Creditor is found to be defective, no correspondence whatsoever was exchanged between the parties in relation to the supply of the defective materials to the Corporate Debtor has been placed on record by the Corporate Debtor and all these allegations seem to be only a moonshine defence raised by the Corporate Debtor in order to defeat the claim of the Operational Creditor. There is no dispute in relation to the supply of goods by the Operational Creditor to the Corporate Debtor and also those defences raised by the Corporate Debtor are afterthought and also all these defences have been raised by the Corporate Debtor very much after the issuance of the Demand Notice which cannot be termed as a dispute as envisaged under Section 9 of IBC, 2016. Whether the Operational Creditor has proved the 'Operational Debt' and the 'default' committed on the part of the Corporate Debtor? - HELD THAT - It is seen that all the invoices raised by the Operational Creditor squarely falls for the period from 2017 to 2018 and the present application was filed before this Tribunal on 21.02.2020 and also the services provided by the Operational Creditor and the failure to make payment by the Corporate Debtor will fall within the meaning of Operational Debt , as stated under Section 5(20) of the IBC, 2016. The application is admitted - moratorium declared.
Issues Involved:
1. Whether there exists any dispute between the parties prior to the issuance of the Demand Notice. 2. Whether the Operational Creditor has proved the 'Operational Debt' and the 'default' committed on the part of the Corporate Debtor. Issue-wise Detailed Analysis: Issue 1: Existence of Dispute Prior to Demand Notice The Tribunal examined whether any dispute existed between the parties before the issuance of the Demand Notice. The Corporate Debtor alleged discrepancies in the supply of goods and billing issues, claiming these disputes should be resolved by a Competent Arbitral Tribunal as per the Purchase Order. However, the Tribunal noted that no documentary evidence or proof was provided by the Corporate Debtor to substantiate these claims. The Tribunal highlighted that if the materials supplied were indeed defective, there should have been some correspondence between the parties, which was not presented. Furthermore, the Tribunal observed that the Debit Notes issued by the Corporate Debtor on 30.04.2019 were only raised after the Operational Creditor issued a final reminder notice on 20.02.2019, suggesting that these defenses were afterthoughts. Consequently, the Tribunal concluded that there was no genuine dispute regarding the supply of goods by the Operational Creditor and that the defenses raised by the Corporate Debtor were not credible and were raised after the issuance of the Demand Notice, thus not constituting a dispute as envisaged under Section 9 of the IBC, 2016. Issue 2: Proof of Operational Debt and Default The Tribunal evaluated whether the Operational Creditor had established the existence of an 'Operational Debt' and the default by the Corporate Debtor. The Tribunal noted that the invoices raised by the Operational Creditor were for the period from 2017 to 2018, and the application was filed on 21.02.2020. The Tribunal confirmed that the services provided by the Operational Creditor and the failure of the Corporate Debtor to make payments fell within the definition of "Operational Debt" under Section 5(20) of the IBC, 2016. The Tribunal found that the Operational Creditor had sufficiently proved the debt and default by the Corporate Debtor. Conclusion: Based on the findings, the Tribunal admitted the petition filed by the Operational Creditor under Section 9(5) of the IBC, 2016. The Tribunal appointed Mr. K. Ganesan as the Interim Resolution Professional (IRP) to initiate the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. The Tribunal ordered a moratorium as per Section 14(1) of the IBC, 2016, which included the suspension of suits or proceedings against the Corporate Debtor, the prohibition of transferring or disposing of assets, and the continuation of essential goods or services to the Corporate Debtor during the moratorium period. The moratorium would remain in effect until the completion of the CIRP or until an order for liquidation or approval of the Resolution Plan is passed by the Adjudicating Authority. The Tribunal directed the Registry to communicate the order to the relevant parties and authorities, including the IBBI and the Registrar of Companies.
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