Partnership firm wins insolvency case for non-payment against private limited company

The Tribunal granted the application under section 9 of the Insolvency and Bankruptcy Code, 2016, filed by a partnership firm against a private limited company for non-payment of an outstanding amount for materials supplied. The Corporate Debtor's claim of debt assignment lacked merit as evidence of the Applicant's involvement was not provided. Jurisdiction was established, and an Interim Resolution Professional was appointed, initiating the insolvency resolution process with a moratorium period in place.

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Issues:
1. Application filed under section 9 of Insolvency and Bankruptcy Code, 2016 for Corporate Insolvency Resolution Process (CIRP).
2. Dispute over outstanding payment of materials supplied to the Corporate Debtor.
3. Allegation of default in payment by the Corporate Debtor.
4. Response of Corporate Debtor claiming assignment of debt to Principal Employer.
5. Jurisdiction of the Tribunal to entertain the application.
6. Appointment of Interim Resolution Professional and deposit of funds.

Analysis:
1. The Applicant, a partnership firm, filed an application under section 9 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, a private limited company. The Applicant alleged non-payment of an outstanding amount of &8377; 1,46,49,934/- along with interest, for electrical materials supplied to the Corporate Debtor between Dec 2017 to June 2018.

2. The Applicant claimed that despite supplying materials worth &8377; 3,15,42,453/-, the Corporate Debtor only paid &8377; 1,68,92,519/-, leaving a significant outstanding balance. The Corporate Debtor allegedly failed to make full payments as per the purchase orders, leading to a cessation of further supplies by the Applicant.

3. The Corporate Debtor, in response, contended that the debt had been assigned to a Principal Employer, and the Applicant had orally consented to this arrangement. However, the Tribunal found that the Corporate Debtor failed to provide evidence of the Applicant's involvement or acceptance of this assignment, leading to a lack of merit in the dispute raised by the Corporate Debtor.

4. The Tribunal noted that the Corporate Debtor's attempt to create a pre-existing dispute regarding the debt assignment was unsubstantiated. The Applicant denied being a party to agreements cited by the Corporate Debtor and refuted claims of delayed deliveries or mediator roles, emphasizing the non-payment issue.

5. Jurisdiction of the Tribunal was established based on the location of the Corporate Debtor's registered office in Delhi. The Tribunal found the application timely filed within the limitation period and admitted it for further proceedings under the Insolvency and Bankruptcy Code.

6. Consequently, the Tribunal appointed an Interim Resolution Professional and directed the Applicant to deposit funds to meet expenses related to the insolvency resolution process. The admission of the application triggered a moratorium period under the Code, prohibiting certain actions against the Corporate Debtor during this period.

This detailed analysis of the judgment highlights the issues, contentions of the parties, Tribunal's findings, and the consequential orders issued in the case.

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