Multiple debtor application rejected under Insolvency Code due to non-compliance. Key lesson: file against single Corporate Debtor.

The application under Section 9 of the Insolvency and Bankruptcy Code against multiple debtors was rejected by the Tribunal. The application was deemed not maintainable as it was filed against more than one debtor, contrary to the requirement of lodging it against a single Corporate Debtor. Additionally, the Tribunal found that Part-II of the Code, which deals with corporate persons, was not applicable to the individuals described as directors and authorized signatories of a company. The dispute regarding the outstanding amount and settlement, coupled with the applicant's failure to prove the claimed debt, led to the rejection of the application.

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Issues:
1. Application under Section 9 of the Insolvency and Bankruptcy Code against multiple debtors.
2. Applicability of Code to individuals under Part-II.
3. Dispute regarding outstanding amount and settlement between parties.
4. Onus of proof on the applicant for the claimed debt.
5. Rejection of the application under Section 9.

Issue 1: Application under Section 9 against multiple debtors
The Tribunal noted that the application was filed under Section 9 of the Insolvency and Bankruptcy Code against multiple debtors. It was highlighted that an application under Section 9 can only be lodged against a single Corporate Debtor, as per the relevant form. Therefore, the application against more than one debtor was deemed not maintainable under the Code.

Issue 2: Applicability of Code to individuals under Part-II
The Tribunal pointed out that Part-II of the Code deals with insolvency resolution and liquidation for corporate persons, while Part-III pertains to individuals and partnership firms. As the respondents were described as directors and authorized signatories of a company, they fell under the ambit of individuals under the Code. Hence, Part-II was deemed not applicable to these individuals.

Issue 3: Dispute regarding outstanding amount and settlement
The Tribunal examined the dispute regarding the outstanding amount claimed by the applicant and the settlement reached between the parties. The respondent provided receipts showing partial payments made towards a settlement amount, which the applicant had not fully disclosed. The Tribunal found that the claimed debt was not admitted by the respondent, leading to a clear dispute on the amount owed, which fell within the ambit of a disputed claim under the Code.

Issue 4: Onus of proof on the applicant for the claimed debt
Referring to a previous judgment, the Tribunal emphasized that when the claimed debt is not admitted by the respondent, the onus lies on the applicant to prove the claim. The applicant's failure to dispute the receipts provided by the respondent and the lack of complete disclosure were noted as factors against the applicant's claim.

Issue 5: Rejection of the application under Section 9
Based on the analysis of the issues, the Tribunal concluded that the application failed and was rejected. It was emphasized that any observations made in the order should not be construed as an expression of opinion on the merit of the controversy, and the applicant's right before any other forum would not be prejudiced by the dismissal of the instant application.

By considering the specific legal provisions, the Tribunal thoroughly analyzed each issue raised in the case, ultimately leading to the rejection of the application under Section 9 of the Insolvency and Bankruptcy Code.

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