Petition under Section 9 of IBC rejected due to genuine dispute over debt and late filing

The tribunal rejected the petition under Section 9 of the IBC due to the existence of a genuine dispute regarding the amount due, failure to prove the debt was undisputed, and filing beyond the limitation period. The rejection was based on the nature of the proceedings as recovery rather than insolvency resolution. The petitioner was not precluded from seeking other legal remedies, and no costs were awarded.

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Issues Involved:
1. Default of payment by the Corporate Debtor.
2. Existence of a genuine dispute regarding the amount due.
3. Admissibility criteria under Section 9 of the IBC, 2016.
4. Limitation period for filing the petition.
5. Nature of the proceedings under IBC as recovery proceedings.

Detailed Analysis:

1. Default of Payment by the Corporate Debtor:
The petitioner, M/s. GupShup Technology India Pvt. Ltd., filed the petition under Section 9 of the IBC, 2016, against M/s. Interpid Online Retail Pvt. Ltd., alleging a default of Rs. 82,41,053/-. The agreement between the parties required the petitioner to send monthly invoices, which the respondent was to verify and pay within fifteen business days. The petitioner issued a demand notice on 24.10.2017, but the respondent failed to pay the outstanding amount, prompting the filing of the petition.

2. Existence of a Genuine Dispute Regarding the Amount Due:
The respondent contended there was a genuine dispute regarding the amount due, requesting the petitioner to provide relevant messages, email logs, and other supporting data to verify the claimed amounts. The respondent highlighted discrepancies in the amounts claimed in different notices, with the petitioner initially demanding Rs. 57,86,148/- and later Rs. 82,41,053/-. The respondent also referenced a draft settlement agreement for Rs. 31,00,000/- and accused the petitioner of not providing necessary documents to verify the invoices.

3. Admissibility Criteria Under Section 9 of the IBC, 2016:
The tribunal noted that for an application under Section 9 to be admitted, there must be no repayment of the unpaid operational debt, and no notice of dispute should have been received by the operational creditor. The petitioner issued a legal notice on 11.10.2017 for Rs. 57,86,148/- and a subsequent demand notice on 24.10.2017 for Rs. 82,41,053/-. The respondent's email dated 05.09.2017 and reply dated 24.10.2017 raised disputes regarding the claimed amounts, indicating a genuine dispute existed.

4. Limitation Period for Filing the Petition:
The tribunal referenced the Hon’ble Supreme Court's judgment in B.K. Educational Services (P.) Ltd. v. Prag Gupta & Associates, which held that the Limitation Act applies to proceedings before the NCLT/NCLAT. The petitioner's claim fell due on various dates starting from October 2011, and the petition was filed in January 2018. The tribunal found no explanation for the laches and delay, indicating the petition was not filed within the prescribed limitation period.

5. Nature of the Proceedings Under IBC as Recovery Proceedings:
The tribunal emphasized that the IBC is not intended as a substitute for a recovery forum. The Hon’ble Supreme Court in Mobilox Innovations (P.) Ltd v. Kirusa Software (P.) Ltd. and Transmission Corpn. of APLtd. v. Equipment Conductors and Cables Ltd. established that the existence of a real dispute bars the invocation of IBC provisions. The tribunal concluded that the petitioner failed to substantiate an undisputed debt and that the proceedings appeared to be for recovery rather than insolvency resolution.

Conclusion:
The tribunal rejected C.P.(IB) No.25/BB/2018 under Section 9(5)(i)(a) of the IBC, 2016, due to the existence of a bona fide dispute, failure to prove the debt was undisputed, and the petition being filed beyond the limitation period. The rejection does not preclude the petitioner from seeking other legal remedies. No order as to costs was made.

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