2020 (12) TMI 1253 - Tri - Insolvency and Bankruptcy

Tribunal dismisses insolvency application citing lack of evidence and payment discrepancies.

The Tribunal dismissed the application under Section 9 of the Insolvency & Bankruptcy Code due to limitations and lack of evidence supporting the ... Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - Time limitation - HELD THAT:- It is not in dispute that all the supply has been made by the Operational Creditor in the month of July 2015. It is also not in dispute that the Operational Creditor is operating in business to business segment i.e. it is not in case where such supplies are being made to numbers of clients on specific date or from different locations. Therefore, there are no substance in the claim of the Operational Creditor that date of Invoice and number of Invoice could not matched. Even, otherwise, the supply has been made in the month of July 2015, as stated earlier, and the application has been filed on July 18, 2019, hence, aspect of limitation is to be seen. No material has been brought on record to show that name of the Corporate Debtor has been changed. In view of the fact that the Corporate Debtor has attached its Annual report for 2018-19 in the name and style of M/S, Girdharilal Sugar and Allied Industries Limited, the name of the Corporate Debtor remained the same, Therefore, the said payment could not be said to have been made by the Corporate Debtor. Even otherwise a paltry payment, assuming to have been made by the Corporate Debtor, cannot extend the limitation period for all debts as each supply is an independent contract. The said petition is, therefore, not maintainable. Petition not maintainable and is dismissed. Issues:Application under Section 9 of the Insolvency & Bankruptcy Code, 2016 for Corporate Insolvency Resolution Process based on outstanding dues of Rs. 59,75,055 - Discrepancy in invoices - Financial constraints of the Corporate Debtor - Limitation period for debt - Authenticity and validity of Invoices.Analysis:1. Application under Section 9 of the Insolvency & Bankruptcy Code:The Operational Creditor, Hira International Limited, filed an application under Section 9 to initiate Corporate Insolvency Resolution Process against the Corporate Debtor, M/S Girdharilal Sugar and Allied Industries Limited, due to outstanding dues of Rs. 59,75,055. The application was based on the supply of Soya Bean to the Corporate Debtor as per their commercial arrangement in July 2015.2. Discrepancy in Invoices:A discrepancy was noted in the invoices issued by the Operational Creditor, where Invoice No. 304 was dated 25.07.2015, while Invoice Nos. 274, 275, and 276 were dated 28.07.2015. The Operational Creditor explained that two sales counters were maintained, leading to the discrepancy. However, the Tribunal found no substance in the claim of mismatched dates, considering all supplies were made in July 2015.3. Financial Constraints of the Corporate Debtor:The Corporate Debtor pleaded financial constraints as the reason for non-payment. It was highlighted that recovery proceedings by a Financial Creditor were also initiated against the Corporate Debtor. Despite the financial constraints, the Tribunal assessed the situation based on the material available on record.4. Limitation Period for Debt:The Tribunal considered the aspect of limitation for the debt. A payment of Rs. 2.00 lacs was claimed to have been received from the Corporate Debtor on 24.11.2017. However, upon examination of the Operational Creditor's bank statement, it was found that the payment was received from M/S. Premier Nutritions, not the Corporate Debtor. The Tribunal emphasized that each supply constitutes an independent contract, and a partial payment by a different entity does not extend the limitation period for all debts.5. Authenticity and Validity of Invoices:The Tribunal dismissed the application under Section 9 on grounds of limitation and merit, considering the authenticity and validity of the Invoices raised by the Operational Creditor. It was concluded that the application was not maintainable due to the lack of evidence supporting the claim, and the matter was disposed of accordingly.6. Conclusion:The Tribunal directed the Registry to communicate the order to the Operational Creditor and Corporate Debtor, completing necessary formalities within seven working days. The order was to be uploaded on the website promptly after pronouncement.