Corporate Debtor in Default: Moratorium Imposed, Interim Resolution Professional Appointed

The Tribunal admitted the petition under Sections 8 and 9 of the Insolvency & Bankruptcy Code, finding the Corporate Debtor in default of payment without raising any dispute. Consequently, a moratorium was imposed, prohibiting suits against the Corporate Debtor, and an Interim Resolution Professional was appointed. The order took effect from 20.11.2018, with a progress report scheduled for 10th Dec 2018.

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Issues Involved:
1. Default in payment by the Corporate Debtor.
2. Issuance of demand notice and subsequent non-payment.
3. Adjustment of payments and issuance of promissory note and post-dated cheques.
4. Dishonour of cheques and winding-up notice.
5. Dispute regarding the withholding of bills of lading by the Operational Creditor.
6. Alleged losses due to delay in delivery of documents.
7. Existence of a dispute under the Insolvency and Bankruptcy Code, 2016.
8. Admissibility of the petition under Sections 8 and 9 of the Insolvency and Bankruptcy Code, 2016.

Detailed Analysis:

1. Default in payment by the Corporate Debtor:
The Operational Creditor filed a Company Petition under Section 9 of the Insolvency & Bankruptcy Code, 2016, alleging that the Corporate Debtor defaulted in making payment of Rs. 16,48,721.98. The Operational Creditor is a Private Limited Company engaged in logistics services.

2. Issuance of demand notice and subsequent non-payment:
The Operational Creditor issued a demand notice dated 29th May 2017 under Section 8 of the Insolvency & Bankruptcy Code, 2016, stating that the Corporate Debtor is liable to pay Rs. 16,48,721.98, which remained unpaid. Interest accrued on this amount at 24% p.a., totaling Rs. 3,74,035.04, making the total amount due Rs. 20,22,757.02.

3. Adjustment of payments and issuance of promissory note and post-dated cheques:
The Corporate Debtor made partial payments totaling Rs. 4,50,000, which were adjusted against outstanding invoices. Additionally, the Corporate Debtor issued a Promissory Note for Rs. 46,67,815, covering its liability and that of its sister concern, Mrunmaha Agro Pvt. Ltd. Six post-dated cheques were issued by the Corporate Debtor and its sister concern.

4. Dishonour of cheques and winding-up notice:
Cheques presented by the Operational Creditor were dishonoured with remarks such as "Payment stopped by Drawer" and "Fund insufficient." Consequently, the Operational Creditor issued a Winding-up Notice dated 19.10.2016, demanding payment of Rs. 46,67,815.

5. Dispute regarding the withholding of bills of lading by the Operational Creditor:
The Corporate Debtor argued that the Operational Creditor withheld bills of lading, preventing the shipment of goods, which were then stored in the port warehouse. The Corporate Debtor claimed that this withholding hampered its cash flow and led to penalties and demurrage charges.

6. Alleged losses due to delay in delivery of documents:
The Corporate Debtor contended that the delay in releasing bills of lading resulted in losses, including a compensation payment of USD 4000 and additional demurrage charges amounting to USD 37,544.

7. Existence of a dispute under the Insolvency and Bankruptcy Code, 2016:
The Tribunal noted that the dispute raised by the Corporate Debtor regarding the withholding of bills of lading did not qualify as a pre-existing dispute under the Insolvency and Bankruptcy Code, 2016. The Tribunal referred to the Supreme Court judgment in Mobilox Innovations Private Limited v. Kirusa Software Private Limited, emphasizing that the existence of a genuine dispute must be plausible and not a feeble legal argument.

8. Admissibility of the petition under Sections 8 and 9 of the Insolvency and Bankruptcy Code, 2016:
The Tribunal found that the Company Petition was complete in all respects under Sections 8 and 9 of the Insolvency & Bankruptcy Code. The Corporate Debtor defaulted in making the payment, and no dispute was raised after receiving the demand notice. Consequently, the petition was admitted.

Judgment:
The Tribunal admitted the petition and prohibited the institution of suits or continuation of pending suits against the Corporate Debtor. It imposed a moratorium and appointed an Interim Resolution Professional to carry out the functions under the Insolvency & Bankruptcy Code. The order was to take effect from 20.11.2018 until the completion of the corporate insolvency resolution process or further orders. The Tribunal directed immediate communication of the order to the parties involved and scheduled a progress report for 10th Dec 2018.

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