Tribunal Admits CIRP Petition for Unpaid Operational Debt

The Tribunal admitted the petition for the initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor for an unpaid operational debt. The Tribunal found that the operational debt existed, was due, and the default had occurred, leading to the appointment of an Interim Resolution Professional (IRP) to manage the process. A moratorium was declared, and the IRP was directed to protect the Corporate Debtor's property in accordance with the Insolvency and Bankruptcy Code, 2016. The petition was admitted with necessary observations and directions.

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Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016.
2. Existence of operational debt and default.
3. Pre-existing dispute regarding the debt.
4. Validity of the petition filed by a partnership firm.
5. Appointment of an Interim Resolution Professional (IRP).

Issue-Wise Detailed Analysis:

1. Initiation of Corporate Insolvency Resolution Process (CIRP):
The petition was filed by the Operational Creditor under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking the initiation of CIRP against the Corporate Debtor. The petition was filed on 11.07.2019 for an unpaid operational debt amounting to INR 1,81,61,422.00. The Tribunal noted that the petition was filed within the limitation period, with the date of default being 30.11.2016.

2. Existence of Operational Debt and Default:
The Operational Creditor claimed that the Corporate Debtor was indebted for INR 1,81,61,422.00 along with interest. The invoices raised by the Operational Creditor were accepted by the Corporate Debtor, and part payments were made, confirming the debt. The Tribunal found that the operational debt was above Rs. One Lac and the default had occurred on 30.11.2016.

3. Pre-existing Dispute Regarding the Debt:
The Corporate Debtor argued that there was a pre-existing dispute regarding the quality of goods supplied and discrepancies in the ledger account. However, the Tribunal observed that no pre-existing dispute was found before the filing of the application. The Operational Creditor maintained a running account, and the part payments made by the Corporate Debtor fortified the claim that the dues were admitted and undisputed.

4. Validity of the Petition Filed by a Partnership Firm:
The Corporate Debtor contended that the partnership firm had no locus to file the petition. However, the Tribunal did not find merit in this argument, as the petition was filed through an authorized person, and all necessary details were provided.

5. Appointment of an Interim Resolution Professional (IRP):
The Operational Creditor did not suggest any name for the IRP. The Tribunal appointed Shri Gopal Krishana Saraswat as the IRP, directing him to make a public announcement of the moratorium and to perform all functions as per the provisions of the Code. The Tribunal emphasized the legal obligation of the Corporate Debtor's personnel to assist the IRP.

Observations and Order:
The Tribunal, after considering the material and facts, was satisfied that the operational debt existed, was due, and the default had occurred. The petition was admitted on 13.03.2020, and a moratorium was declared as per Sections 13 and 14 of the Insolvency and Bankruptcy Code, 2016. The IRP was directed to follow the provisions of the Code and protect the value of the Corporate Debtor's property.

The Tribunal ordered that an authentic copy of the order be communicated to the Operational Creditor, Corporate Debtor, IRP, and the Registrar of Companies. The petition was admitted with the observations and directions mentioned above.

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