2022 (7) TMI 1248 - 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 - The Operational Creditor itself produced on record along with the rejoinder, the correspondence that has taken place between the Operational Creditor and the Corporate Debtor, prior to the issuance of the Demand Notice. More particularly, the letter from Operational Creditor to Corporate Debtor dated 14.04.2017 whereby the Operational Creditor called upon the Corporate Debtor to pay a sum of Rs. 70,76,730/-. The Corporate Debtor replied to the aforesaid letter vide email dated 15.04.2017 pointing out to the Operational Creditor that as per their account statement Rs. 37,33,552.10 is only due and payable. The Operational Creditor sent one more letter dated 27.12.2017 giving some calculations calling upon the Corporate Debtor to pay Rs. 55,23,253/-. It appears from the evidence on record that there is a dispute even prior to the Demand Notice about the exact amount due and payable by the Corporate Debtor to the Operational Creditor. This Adjudicating Authority is sitting in a limited jurisdiction cannot dwell upon the issue as to whose account is accurate and correct. There appears a serious dispute about the actual amount payable by the Corporate Debtor to the Operational Creditor. In fact, the Corporate Debtor contends that nothing is due and payable now. The Corporate Debtor informed this fact in its reply to the notice. There appears dispute about whether any amount is payable by the Corporate Debtor to the Operational Creditor - Petition dismissed.

Summary

Issues:
Application under Section 9 of IBC for initiation of CIRP due to default in paying operational debt.

Analysis:
1. The application was filed by the Operational Creditor seeking initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor for defaulting on an operational debt of Rs. 55,23,253. The Operational Creditor sold goods to the Corporate Debtor on payment-on-demand terms, and despite repeated demands, the outstanding amount was not paid, leading to the application under Section 9 of the IBC.

2. The Corporate Debtor's defense was that it had paid the entire amount and no debt was due to the Operational Creditor. The Corporate Debtor claimed to have made payments for goods received during the relevant period and provided detailed statements and evidence to support its contention, including a ledger statement and bank statements.

3. The dispute centered around the amount claimed to be due and payable by the Corporate Debtor. The Operational Creditor asserted that a significant sum was outstanding, while the Corporate Debtor maintained that it had made all payments, even claiming an excess payment of Rs. 82,141. The correspondence between the parties prior to the Demand Notice highlighted the disagreement on the exact amount owed.

4. The Adjudicating Authority noted the existence of a serious dispute regarding the actual amount payable by the Corporate Debtor to the Operational Creditor. The Authority emphasized its limited jurisdiction and inability to resolve such disputes, stating that a detailed hearing was necessary to ascertain the accuracy of the accounts maintained by both parties, which should be addressed in the appropriate forum.

5. Citing the ruling in Mobilox Innovations Pvt. Ltd. Vs. Kirusa Software Pvt. Ltd., the Authority held that the application was not maintainable before them due to the unresolved dispute over the amount payable. Consequently, the application was rejected, and no costs were awarded to either party.

6. The judgment concluded with instructions for the Registry to provide copies of the order to both the petitioner and the respondent, thereby closing the case with the rejection of the application under Section 9 of the IBC.