Tribunal admits petition for Corporate Insolvency Resolution Process despite objections

The Tribunal admitted the petition for initiating the Corporate Insolvency Resolution Process, rejecting objections regarding the unregistered partnership firm's eligibility, the existence of outstanding operational debt, and technical flaws in the petition. The Tribunal directed the initiation of the resolution process, imposed a moratorium, appointed an Interim Resolution Professional, and set deadlines for further proceedings, ensuring compliance with statutory requirements. The case was scheduled for further consideration on a specified date.

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Issues:
1. Whether an unregistered partnership firm can initiate a petition under section 9 of the Code for Corporate Insolvency Resolution Process.
2. Whether the existence of an outstanding operational debt is a prerequisite for maintaining a petition under section 9 of the Code.
3. Whether technical flaws in the petition, such as the notarization of an affidavit on a non-judicial stamp paper from a different state, warrant rejection of the petition.

Issue 1: Unregistered Partnership Firm Filing Petition:
The petitioner, an unregistered partnership firm, sought initiation of Corporate Insolvency Resolution Process against the Corporate Debtor. The Corporate Debtor objected, citing the Partnership Act's section 69, which they claimed barred unregistered firms from initiating such petitions. The Tribunal analyzed previous judgments, including the Calcutta High Court's decision, emphasizing that the bar under the Partnership Act does not apply to statutory rights enforcement. The Tribunal concluded that the objections based on the firm's registration status were not sustainable, allowing the petition's admission.

Issue 2: Existence of Outstanding Operational Debt:
The Corporate Debtor contended that no outstanding operational debt existed, as a debit note had been issued for a higher amount than demanded. However, the Operational Creditor denied the existence of such a debit note. The Tribunal examined the evidence and found that the Corporate Debtor failed to substantiate the alleged debit note with any correspondence or proof of substandard goods return. Consequently, the Tribunal accepted the Operational Creditor's submission that no debit note had been issued, supporting the petition's merit.

Issue 3: Technical Flaws in the Petition:
The Corporate Debtor raised objections regarding technical flaws in the petition, specifically the notarization of an affidavit on a non-judicial stamp paper from a different state. The Operational Creditor defended this, stating the stamp paper's purchase location did not affect notarization validity. The Tribunal agreed, considering the defect as curable and not a basis for petition rejection. Consequently, the objections related to technical flaws were dismissed.

In conclusion, the Tribunal admitted the petition for initiating the Corporate Insolvency Resolution Process, rejecting objections regarding the unregistered partnership firm's eligibility, the existence of outstanding operational debt, and technical flaws in the petition. The Tribunal directed the initiation of the resolution process, imposed a moratorium, appointed an Interim Resolution Professional, and set deadlines for further proceedings, ensuring compliance with statutory requirements. The case was scheduled for further consideration on a specified date.

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