Tribunal Upholds Insolvency Application Against India Techs Ltd.

The Tribunal admitted the application filed by M/s. Capedge P. Ltd. under Section 9 of the Insolvency and Bankruptcy Code against M/s. India Techs Ltd. It found the application maintainable, disregarding the corporate debtor's objection on non-receipt of the demand notice as evidence proved otherwise. The Tribunal dismissed the claim of a pre-existing dispute between the parties, emphasizing the lack of genuine dispute prior to the demand notice. Compliance with procedural requirements was confirmed, leading to the appointment of Mr. Sasitharan Ramaswamy as the interim resolution professional. A moratorium under Section 14 of the Insolvency and Bankruptcy Code was declared, halting certain actions against the corporate debtor.

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Issues Involved:
1. Maintainability of the application under Section 9 of the Insolvency and Bankruptcy Code, 2016.
2. Existence of a pre-existing dispute between the operational creditor and the corporate debtor.
3. Compliance with procedural requirements under the Insolvency and Bankruptcy Code.
4. Appointment of an Interim Resolution Professional (IRP).
5. Declaration of moratorium under Section 14 of the Insolvency and Bankruptcy Code.

Detailed Analysis:

1. Maintainability of the application under Section 9 of the Insolvency and Bankruptcy Code, 2016:
The operational creditor, M/s. Capedge P. Ltd., filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate the insolvency resolution process against the corporate debtor, M/s. India Techs Ltd. The application was supported by an affidavit and several documentary evidences including a demand notice dated February 11, 2019, demanding payment of unpaid operational debt amounting to Rs. 1,71,74,366. The corporate debtor contested the maintainability of the application, citing non-receipt of the demand notice. However, the Tribunal found this objection irrelevant as the operational creditor produced the original acknowledgment due card indicating receipt of the demand notice at the office of the corporate debtor.

2. Existence of a pre-existing dispute between the operational creditor and the corporate debtor:
The corporate debtor argued that there was a pre-existing dispute regarding the services rendered by the operational creditor. They claimed the operational creditor deviated from the terms of the consultancy agreements and did not provide the promised services. The corporate debtor also cited a letter dated January 21, 2018, asking for further information on services rendered. The Tribunal examined these claims in light of the Supreme Court judgments in Innoventive Industries Ltd. v. ICICI Bank and Mobilox Innovations P. Ltd. v. Kirusa Software P. Ltd., which require that any dispute must be pre-existing, i.e., prior to the receipt of the demand notice. The Tribunal found no evidence of a genuine dispute, noting that the corporate debtor merely sought additional information, which does not constitute a pre-existing dispute.

3. Compliance with procedural requirements under the Insolvency and Bankruptcy Code:
The Tribunal scrutinized the compliance of procedural requirements under the Insolvency and Bankruptcy Code. The operational creditor had issued a demand notice and provided proof of its receipt. The Tribunal also directed the corporate debtor to submit audited financial statements for the relevant financial years, which were not provided due to alleged deficiencies in service by the financial consultant. The Tribunal found the application to be complete in all respects and the operational creditor succeeded in establishing the default in payment of the operational debt beyond doubt.

4. Appointment of an Interim Resolution Professional (IRP):
The operational creditor did not specify the name of the resolution professional. Consequently, the Tribunal appointed Mr. Sasitharan Ramaswamy as the interim resolution professional (IRP) to carry out the functions as mentioned under the Insolvency and Bankruptcy Code. The operational creditor was directed to deposit Rs. 2 lakhs with the IRP to meet the expenses for performing his functions.

5. Declaration of moratorium under Section 14 of the Insolvency and Bankruptcy Code:
The Tribunal declared a moratorium under Section 14 of the Insolvency and Bankruptcy Code, which prohibits:
(a) Institution or continuation of suits or proceedings against the corporate debtor.
(b) Transferring, encumbering, alienating, or disposing of any assets of the corporate debtor.
(c) Any action to foreclose, recover, or enforce any security interest created by the corporate debtor.
(d) Recovery of any property by an owner or lessor where such property is occupied by or in possession of the corporate debtor.

The moratorium shall be effective from the date of the order until the completion of the corporate insolvency resolution process or approval of the resolution plan or liquidation order by the Tribunal.

Conclusion:
The Tribunal admitted the application, declared a moratorium, and appointed an interim resolution professional. The operational creditor was directed to deposit Rs. 2 lakhs with the IRP. The registry was instructed to communicate the order to all relevant parties. The application was disposed of with no order as to costs.

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