Tribunal grants petition under Insolvency and Bankruptcy Code, appoints Resolution Professional, and orders moratorium.

The Tribunal admitted the petition under Section 9 of the Insolvency and Bankruptcy Code, appointing an Interim Insolvency Resolution Professional and ordering a moratorium under Section 13(1)(a) to prevent actions against the corporate debtor. The petition was found valid despite challenges regarding misjoinder of parties, form compliance, limitation period, non-compliance with MOU, retention of raw materials, and misuse of cheques. The Tribunal rejected these challenges, emphasizing the absence of prior disputes and upholding the petition's completeness.

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Issues Involved:
1. Misjoinder of parties.
2. Validity of Form 3 under Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016.
3. Limitation period for filing the petition.
4. Non-compliance with the Memorandum of Understanding (MOU) and retention of raw materials.
5. Purpose and misuse of cheques issued by the respondent.

Issue-wise Detailed Analysis:

1. Misjoinder of Parties:
The respondent argued that the petition was invalid due to the inclusion of SBSL's directors as parties. The Tribunal clarified that the petition was filed under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016, with KCPL as the applicant and SBSL as the corporate debtor. Since no relief was sought against the directors, the petition could not be dismissed on this ground.

2. Validity of Form 3 under Rule 5:
SBSL contended that Form 3 was not compliant with Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. The Tribunal examined Form 3 and Form 4, along with the petition, and found them to be in accordance with the prescribed rules. The forms were properly signed, and the necessary resolutions were filed, making the notice valid.

3. Limitation Period:
SBSL argued that the petition was barred by limitation. KCPL countered that the claim was within time as the cheques issued by SBSL on 10.01.2015 and 04.04.2015 were dishonoured, and payments were made on a running account basis. The Tribunal referred to decisions by the NCLAT, which stated that the Limitation Act is not applicable to proceedings under the IBC. Therefore, the petition was not barred by limitation.

4. Non-compliance with MOU and Retention of Raw Materials:
SBSL claimed that KCPL did not perform job work as per the MOU dated 31.10.2013 and retained raw materials worth Rs. 34,91,581/-. KCPL admitted to retaining the raw materials but argued that no dispute was raised by SBSL before the demand notice. The Tribunal had to determine if the dispute existed before the demand notice. The Tribunal referred to the Supreme Court's decision in Mobilox Innovations Pvt. Ltd. vs. Kirusa Software Pvt. Ltd., which stated that the adjudicating authority must reject the application if a genuine dispute exists. The Tribunal found that the issuance of cheques in 2014 and 2015 indicated no prior dispute, making the dispute raised in the reply notice an afterthought.

5. Purpose and Misuse of Cheques:
SBSL contended that the cheques were issued as a guarantee and were misused by KCPL. The Tribunal noted that there was no evidence to support the claim that the cheques were issued on 31.10.2013 (the date of the MOU) rather than the dates mentioned on the cheques. The Tribunal concluded that the cheques were issued on the dates mentioned, showing no prior dispute.

Conclusion:
The Tribunal admitted the petition as it was complete in all respects. Mr. Sitansh Magia was appointed as the Interim Insolvency Resolution Professional. A moratorium was ordered under Section 13(1)(a) of the IBC, prohibiting suits, asset transfers, and recovery actions against the corporate debtor. The order was to be communicated to the petitioner, respondent, and Interim Insolvency Resolution Professional. The application was disposed of with no order as to costs.

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