Tribunal rules in favor of Creditor, initiating insolvency process for Debtor under Section 9.

The Tribunal ruled in favor of the Operational Creditor in an application under Section 9 of the Insolvency & Bankruptcy Code, initiating the Corporate Insolvency Resolution Process for the Corporate Debtor due to non-payment of interest on the original debt. The Tribunal found that the Corporate Debtor had accepted the terms of interest payment as stated in the invoices, despite the absence of explicit mention in purchase orders. Consequently, the Corporate Debtor was held liable to pay the outstanding interest, and an Interim Resolution Professional was appointed to oversee the resolution process.

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Issues:
- Application under section 9 of Insolvency & Bankruptcy Code, 2016 for Corporate Insolvency Resolution Process (CIRP) due to non-payment of interest by the Corporate Debtor.
- Dispute over the liability to pay interest on the original debt.
- Interpretation of agreements and invoices regarding interest payment.
- Compliance with statutory requirements under the I&B Code for initiating CIRP.

Analysis:
1. The Operational Creditor filed an application against the Corporate Debtor for non-payment of interest on the original debt, even though the principal amount was settled pending the application.
2. The Operational Creditor claimed that the terms of payment, including interest on delayed payment, were clearly mentioned in invoices and a separate agreement, which the Corporate Debtor had accepted by signing the documents.
3. The Corporate Debtor argued that the purchase orders did not mention interest on overdue amounts and that the Operational Creditor had not raised the issue of interest payment in earlier correspondences.
4. The main dispute revolved around whether there was a valid agreement to pay interest on late payments and if the Corporate Debtor had disputed the interest payment.
5. The Tribunal analyzed the definitions of debt and operational debt under the I&B Code to establish that interest payable on delayed payment constitutes part of the debt owed by the Corporate Debtor.
6. The Tribunal found that the invoices clearly stated the interest terms, which were accepted by the Corporate Debtor, while purchase orders did not negate the interest payment clause.
7. The Corporate Debtor's arguments regarding the merger scheme conditions and indemnity bond were deemed irrelevant, and the Tribunal ruled in favor of the Operational Creditor, holding the Corporate Debtor liable to pay the outstanding interest.
8. The Tribunal admitted the application under Section 9 of the I&B Code, initiating the Corporate Insolvency Resolution Process for the Corporate Debtor, and declared a moratorium on certain actions as per the Code.
9. An Interim Resolution Professional was appointed to oversee the resolution process and convene a Committee of Creditors for formulating a resolution plan within the stipulated timeline.
10. The Tribunal directed the Registry to communicate the order to the relevant parties and scheduled a progress report filing for a future date to monitor the resolution process.

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