2022 (4) TMI 1162 - 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 - HELD THAT - It is apparent that the remittance of the amount was to be made by Shri Vaibhavi Logistics only on behalf of Panoli Products Private Limited. Although, a copy of ledger containing account of Shri Vaibhavi Logistics has been placed on record, but that is qua running account from July 2014 to March 2015, where some freight charges etc. also shown to be paid. From the said ledger record, it is not established whether the said amount was paid on behalf of Panoli Product Private Limited for the purpose of making the payment to the Operational Creditor. Although, one payment appears to have been made by Shri Vaibhavi Logistics to Operational Creditor, but subsequent two payments of amounting U.S.D 3441.00 and U.S.D 3330.00, were made by the Corporate Debtor to Operational Creditor, which proves that the payments were to be made by the Corporate Debtor to the Operational Creditor. Even otherwise, in such like circumstances, the 'principle of estoppel' comes into play as above said two payments made by the Corporate Debtor to the Operational Creditor directly. Therefore, the Corporate Debtor is hereby estopped to allege that the payment were to be made by Shri Vaibhavi Logistics. Moreover, as per addendum, the payment were even otherwise to be made on behalf of Corporate Debtor itself. The word 'on behalf of clearly indicates that the ultimate responsibility to pay the same was that of the Corporate Debtor as there is nothing on the record to prove that the Corporate Debtor was absolutely discharged from its liability. The Corporate Debtor failed to prove on record that all such payments as shown in the ledger were actually made by it only for the purpose of making the payment to the Operational Creditor. In fact, those payments appeared to be made with respect of some freight charges apart from other credits debits. Therefore, in the absence of any convincing evidence on record that the said payment was exclusively to be made by Shri Vaibhavi Logistics to the Operational Creditor, it could not be presumed that the responsibility to make the payment was only of that of Shri Vaibhavi Logistics. This Tribunals of affirm view that the Corporate Debtor failed to make the payment to the Operational Creditor with respect to the invoices raised. Accordingly, the present petition stands admitted - petition admitted - moratorium declared.

Summary

Issues:
Application for initiation of CIRP under Section 9 of IBC 2016 against Corporate Debtor for alleged default. Disputed outstanding balance, objections raised by Corporate Debtor, application details, addendum agreement interpretation, payment responsibility, dispute resolution, appointment of IRP, deposit requirement, moratorium initiation.

Analysis:
The applicant, an operational creditor, filed an application seeking to initiate Corporate Insolvency Resolution Process (CIRP) against the Respondent Corporate Debtor for an alleged default with an outstanding balance of USD 349,677.04. The applicant detailed transactions involving lease agreements for tanker containers, issuance of invoices, and subsequent outstanding dues. The applicant issued a Demand Notice under Section 8 of the Code, followed by the application under Section 9(3)(b) due to non-receipt of payment or dispute notice.

The Corporate Debtor raised objections disputing the claimed amount, penalty component, payment responsibility under an addendum agreement, lack of reconciliation of accounts, limitation bar on certain invoices, and threshold limit for the present application. The Corporate Debtor argued that payments were to be made by a third party, Shri Vaibhavi Logistics, on its behalf, and disputed the outstanding dues based on the addendum agreement.

The operational creditor responded, highlighting that most payments were made directly by the Corporate Debtor, satisfying CIRP initiation requirements. The operational creditor emphasized the agreed interest amount, unchallenged invoices, and acknowledged payments made by the Corporate Debtor.

The Tribunal analyzed the addendum agreement and payment records, concluding that the Corporate Debtor was responsible for making payments directly to the operational creditor. The Tribunal invoked the principle of estoppel, emphasizing the Corporate Debtor's direct payments as proof of its liability. The Tribunal cited a relevant Supreme Court case to support its decision on dispute resolution.

Consequently, the Tribunal admitted the application, appointed an Insolvency Resolution Professional (IRP), directed a deposit by the applicant for IRP expenses, initiated a moratorium period under Section 14 of the Code, and issued communication directives to relevant parties and authorities for compliance and record-keeping.

In summary, the Tribunal's detailed analysis of the addendum agreement, payment responsibility, dispute resolution principles, and procedural directives resulted in the admission of the CIRP application against the Corporate Debtor, with subsequent actions outlined for IRP appointment, deposit requirement, and moratorium initiation.