2022 (9) TMI 139 - 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 pertinent to note that the Corporate Debtor has been subjected to CIRP in the matter of REXSONA TILES PVT. LTD. VERSUS WAAMAN PRODUCTS PVT. LTD. 2022 (9) TMI 11 - NATIONAL COMPANY LAW TRIBUNAL , NEW DELHI BENCH which is an Application under Section 9 of IBC, 2016. The Operational Creditor i.e. New Pearl Vitrified Pvt. Ltd. is, therefore, directed to approach the IRP appointed in the above-referred matter and take further steps for filing their claim - Matter disposed off.

Summary

Issues:
- Application under section 9 of the Insolvency and Bankruptcy Code, 2016 for initiation of Corporate Insolvency Resolution Process.
- Dispute between Operational Creditor and Corporate Debtor regarding unpaid operational debt.
- Allegations of defective material supply and non-payment by Corporate Debtor.
- Legal validity of interest claimed by Operational Creditor.
- Previous CIRP order against Corporate Debtor in a related matter.

Analysis:
1. The application was filed under section 9 of the Insolvency and Bankruptcy Code, 2016 by the Operational Creditor, seeking initiation of Corporate Insolvency Resolution Process against the Corporate Debtor for unpaid operational debt. The Operational Creditor, engaged in selling vitrified tiles globally, detailed the transactions leading to the petition, including purchase orders and a dishonored cheque, culminating in a demand notice for the outstanding amount.

2. The Corporate Debtor, in response, raised objections stating they are in the business of manufacturing and selling vitrified tiles. They claimed that the material supplied by the Operational Creditor was substandard, causing rejection by their customers and subsequent losses. The Corporate Debtor also highlighted partial payment made and disputed the interest claimed by the Operational Creditor due to lack of supporting documentation.

3. After considering the submissions from both parties, the Tribunal noted a previous order subjecting the Corporate Debtor to Corporate Insolvency Resolution Process in a related matter. Consequently, the Tribunal directed the Operational Creditor to approach the Insolvency Resolution Professional appointed in the previous case for further action and allowed liberty for revival/restoration of the matter if a settlement is reached or if the CIRP is terminated or set aside in appeal.

4. The Tribunal disposed of the matter accordingly, instructing the transfer of case folders and related documents to the record room. The judgment emphasizes the legal process under the Insolvency and Bankruptcy Code, highlighting the importance of adherence to procedural requirements and previous orders in related cases for consistent application of insolvency resolution mechanisms.