2022 (4) TMI 997 - 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 - threshold monetary limit involved - HELD THAT - The applicant is totally silent why the Operational Creditor did not file the case even after there was no reply by the corporate Debtor within 10 days from the receipt of the notice. The Operational Creditor has filed this application under Section 9 of the IBC only on 18/2/2022. The applicant is totally silent about the time taken for filing the Insolvency Proceedings (this application) i.e., about 1 year and 11 months. In the instant case, the case was filed on 18/2/2022 for a debt amount of ₹ 7,78,708/- which is less than the threshold amount as fixed by the aforesaid notification. In addition to that the applicant is claiming an amount of ₹ 6,00,000/-, it is not relevant to the facts to be considered against the present Corporate Debtor, they cannot do so for initiation of CIRP against the present Corporate Debtor. Application dismissed.

Summary

Issues:
Application under Section 9 of IBC for unpaid invoices against Corporate Debtor, Clubbing of debt amounts in the application, Compliance with threshold amount for Section 9 application, Delay in filing insolvency proceedings.

Analysis:
The judgment pertains to an application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 by an Operational Creditor against a Corporate Debtor for unpaid invoices totaling ?7,78,708. The Operational Creditor supplied Flexible Packing materials to the Corporate Debtor, who made delayed payments and eventually stopped paying altogether. A Demand Notice was served, but the Corporate Debtor did not respond within the stipulated time. The Operational Creditor then filed the petition for insolvency proceedings.

The Tribunal noted that the Operational Creditor had previously withdrawn a case involving a debt of ?6,00,000 from a different entity. The Operational Creditor combined this amount with the current claim, leading to ambiguity regarding the actual debt amount being pursued. Additionally, a Gazette Notification by the Government specified a minimum default amount of ?1 crore for Section 9 applications post a certain date, which the current claim did not meet.

The Tribunal emphasized the importance of timely filing of insolvency proceedings and highlighted the requirement for the Operational Creditor to adhere to the prescribed procedures. Quoting relevant sections of the IBC, the Tribunal referenced previous NCLAT decisions to support its ruling. The judgment cited cases where the threshold limit for Section 9 applications was upheld, emphasizing the need for strict compliance with the law.

Ultimately, the Tribunal dismissed the application, citing non-compliance with the threshold amount specified in the notification and the ambiguity surrounding the debt amounts clubbed together in the petition. The judgment concluded that the application failed on both counts and was therefore dismissed without costs on March 31, 2022.