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2021 (10) TMI 1234 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditor - existence of debt and dispute or not - service of demand notice - HELD THAT - There is a business relationship between Operational Creditor and Corporate Debtor, and medicines were supplied to the Corporate Debtor as per mutual understanding and on the basis of purchase order raised by Corporate Debtor from time to time. There exists no written agreement. Though it was claimed by the Corporate Debtor in his reply that there were delays in delivery, however, no evidence for such claim has been submitted by the Corporate Debtor. Further Corporate Debtor has not returned the medicines to Operational Creditor which were delivered to it - no evidence in support of claim of losses suffered by Corporate Debtor has been brought on record. Thus, it is frivolous or spurious defence which has been made to avoid initiation of CIRP. Hence, there is no merit in such claims made by the Corporate Debtor. It is also noticed that there is no pre existing dispute between Operational Creditor and Corporate Debtor, and no reply was sent by Corporate Debtor against the demand notice under section 8 of IBC, 2016 which was served on Corporate Debtor by hand delivery. It is clear that Corporate Debtor has defaulted in the payment of its debts. On the basis of the facts the application is otherwise defect free on record. However as far as amount of debt is concerned, the same would be determined by IP/IRP in the course of CIRP of the Corporate Debtor - Application admitted - moratorium declared.
Issues:
- Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 for initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. - Dispute regarding the claimed debt by the Operational Creditor against the Corporate Debtor. - Appointment of Interim Resolution Professional (IRP) and declaration of moratorium. Issue 1: Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 for initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. The Operational Creditor filed an application under Section 9 of the Code seeking initiation of CIRP against the Corporate Debtor for a claimed debt of ?3,67,63,463.80, including interest, with a default date of 21.06.2019. The Operational Creditor supplied medicines to the Corporate Debtor, "Arogya Retail," with invoices raised from 25.05.2019 to 15.10.2020. A demand notice was issued under Section 8(1) of the IBC, 2016, which the Corporate Debtor neither paid nor responded to. The Corporate Debtor disputed the amount claimed, citing delays in delivery and subsequent cancellation of orders due to losses incurred. However, the Adjudicating Authority found the Corporate Debtor's defense as frivolous and lacking evidence, leading to the admission of the application and declaration of moratorium. Issue 2: Dispute regarding the claimed debt by the Operational Creditor against the Corporate Debtor. The Corporate Debtor denied the Operational Creditor's claims, alleging delays in delivery and subsequent cancellation of orders due to losses incurred. However, the Corporate Debtor failed to provide evidence to support these claims. The Adjudicating Authority noted the absence of a pre-existing dispute and the Corporate Debtor's failure to respond to the demand notice served under Section 8 of the IBC, 2016. The Adjudicating Authority found the Corporate Debtor's defense unsubstantiated and lacking merit, leading to the admission of the Operational Creditor's application and the appointment of an Interim Resolution Professional (IRP). Issue 3: Appointment of Interim Resolution Professional (IRP) and declaration of moratorium. The Adjudicating Authority admitted the application, declared a moratorium, and appointed Mr. Navin Khandelwal as the IRP. The moratorium prohibited various actions against the Corporate Debtor, and the IRP was tasked with managing the CIRP process. The IRP was directed to make a public announcement, call for submission of claims, and ensure continuity of goods/services supply to the Corporate Debtor during the moratorium period. Additionally, the Operational Creditor was directed to pay an advance to the IRP for the smooth conduct of the CIRP. The Registry was instructed to communicate the order to relevant parties promptly. This comprehensive analysis of the judgment highlights the key issues involved in the case and the detailed findings and decisions made by the Adjudicating Authority regarding the initiation of the Corporate Insolvency Resolution Process.
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