2022 (1) TMI 1131 - Tri - Insolvency and Bankruptcy

Maintainability 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 - The corporate debtor in it reply has failed to produce any document or communication exchanged between the parties showing any pre-existing dispute with respect to the defect in the quality of the material shortage with respect to quantity of material supplied by the operational creditor. Further, the corporate debtor has for the first time raised its dispute in the reply to the application. The corporate debtor had duly acknowledged its outstanding balance in the letter dated 06.12.2016 wherein the corporate debtor has put its company's stamp and signature. Therefore, the present case is fit for admission. Time Limitation - HELD THAT - As per Form V, Part IV, the Corporate Debtor is liable to pay an outstanding sum of ₹ 32,16,152.50/-. The date of default is 06.12.2016 and the present application was filed on 06.12.2019. Hence the debt is not time barred and the application is filed within the period of limitation. Jurisdiction - HELD THAT - 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 complete and the operational creditor 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:
1. Application under section 9 of Insolvency and Bankruptcy Code, 2016 for initiating Corporate Insolvency process.

Analysis:
The operational creditor filed an application under section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process against the Corporate Debtor. The operational creditor claimed that the Corporate Debtor had placed a purchase order for materials, which were duly supplied along with tax invoices. The Corporate Debtor issued cheques that were dishonored due to insufficient funds, leading to legal notices and reminders for payment. Despite partial payments made by the Corporate Debtor, a significant outstanding amount remained unpaid, acknowledged by the Corporate Debtor in writing.

The Corporate Debtor disputed the operational debt, alleging defects in the supplied materials and losses incurred. However, the Tribunal found that the Corporate Debtor failed to provide any evidence of pre-existing disputes regarding material quality or quantity. The Corporate Debtor's acknowledgment of the outstanding balance in a confirmation letter supported the operational creditor's claim. The Tribunal concluded that the application was valid for admission.

The Tribunal determined the outstanding sum owed by the Corporate Debtor, which was not time-barred, and established its jurisdiction to hear the case. Considering the uncontested dues and the Corporate Debtor's failure to refute the default in payment, the Tribunal admitted the application under section 9(5) of the IBC, 2016.

The Tribunal appointed an Interim Resolution Professional (IRP) to oversee the Corporate Insolvency Resolution Process and directed the operational creditor to deposit a specified amount with the IRP for expenses. Additionally, a moratorium was imposed on certain actions against the Corporate Debtor, as per Section 14 of the IBC, 2016, during the resolution process. The Tribunal issued various directives for communication, compliance, and record-keeping to ensure the orderly progression of the resolution proceedings.

In conclusion, the Tribunal admitted the operational creditor's application for initiating the Corporate Insolvency Resolution Process, appointed an IRP, imposed a moratorium, and issued necessary directives for compliance and communication among the involved parties and regulatory authorities.