Tribunal dismisses Insolvency application due to genuine dispute in Freight Forwarding Agreement

The Tribunal dismissed the application under section 9 of the Insolvency & Bankruptcy Code, 2016, for Corporate Insolvency Resolution Process. The dispute arose from a Freight Forwarding Agreement, with the Operational Creditor claiming an amount from the Corporate Debtor. The Tribunal found discrepancies in the invoiced amounts and ruled in favor of the Corporate Debtor, stating that the Code cannot be used in the presence of a genuine dispute. The petition was dismissed based on the clear dispute raised by the Corporate Debtor.

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Issues:
1. Application under section 9 of Insolvency & Bankruptcy Code, 2016 for Corporate Insolvency Resolution Process.
2. Claim amount based on Freight Forwarding Agreement.
3. Dispute regarding demurrage charges and outstanding dues.
4. Existence of a contractual agreement for payment.

Analysis:
1. The Application filed by the Operational Creditor sought initiation of Corporate Insolvency Resolution Process against the Corporate Debtor under section 9 of the Insolvency & Bankruptcy Code, 2016.
2. The Operational Creditor, a Private Limited Company, claimed an amount of Rs. 1,76,91,451/- with interest from the Corporate Debtor based on the Freight Forwarding Agreement dated 07.12.2016.
3. The dispute primarily revolved around demurrage charges and outstanding dues. The Operational Creditor alleged that the Corporate Debtor failed to pay for detention charges, leading to disputes over invoiced amounts.
4. The Corporate Debtor contested the claim, arguing that there was no underlying contract or agreement for the claimed amount. They disputed the liability and highlighted discrepancies in the invoices raised by the Operational Creditor.
5. The Tribunal found that the Freight Forwarding Agreement did not mention demurrage charges, and the Corporate Debtor had paid all amounts due as per the agreement. The Bond letter cited by the Operational Creditor was deemed ineffective due to the absence of a mutually agreed effective date.
6. Citing the Supreme Court decision in Mobilox Innovations Pvt. Ltd. v/s Kirusa Software (P) Limited, the Tribunal emphasized that the Insolvency & Bankruptcy Code is not a substitute for a recovery forum and cannot be invoked in the presence of a genuine dispute.
7. Consequently, the Tribunal dismissed the petition, CP 4603(IB)/MB/2018, based on the existence of a clear dispute raised by the Corporate Debtor, as provided under section 5(6)(a) of the Code.

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