2019 (11) TMI 1723 - Tri - Insolvency and Bankruptcy

Corporate Insolvency Resolution Process: Court Admits Petition for Default in Payment

The court admitted the petition for Corporate Insolvency Resolution Process against the Corporate Debtor due to default in payment. The Corporate Debtor ... Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - Corporate Debtor argued that there is no liability of payment of amount to the Petitioner, the notice issued by the Petitioner is not a valid notice - HELD THAT:- Admittedly, there is a confirmation of debt on 12.02.2019 by the Corporate Debtor, which shows that there is an unpaid amount of ₹ 4,90,01,183/- outstanding payable to the Petitioner which has not been repaid, and the Corporate Debtor has not denied the issuance of the confirmation of balance. If there was no liability, why was the confirmation of balance dated 12.02.2019 issued by the Corporate Debtor. Hence debt and default are proved. Application admitted - moratorium declared. Issues:- Corporate Insolvency Resolution Process sought against Corporate Debtor for default in payment.- Confirmation of debt by Corporate Debtor.- Dispute regarding outstanding amounts and invoices.- Validity of notice issued by the Petitioner.- Appointment of Interim Resolution Professional.- Directions for Moratorium and CIRP.Corporate Insolvency Resolution Process:The Petitioner sought the initiation of Corporate Insolvency Resolution Process against the Corporate Debtor due to default in payment amounting to Rs. 4,90,01,183. The Petitioner provided evidence of invoices raised and acknowledged by the Corporate Debtor, along with confirmation of the outstanding balance. The Petitioner issued demand notices, and the Corporate Debtor did not dispute the debt, confirming the default.Confirmation of Debt:The Corporate Debtor confirmed the debt on 12.02.2019, acknowledging the unpaid amount of Rs. 4,90,01,183 owed to the Petitioner. This confirmation was crucial in establishing the existence of the debt and default, as the Corporate Debtor did not deny issuing the confirmation of balance.Dispute Regarding Outstanding Amounts:The Corporate Debtor disputed the contentions of the Petitioner, claiming that the invoices attached were actually invoices of the Corporate Debtor for materials supplied to the Petitioner. However, the confirmation of the outstanding balance by the Corporate Debtor contradicted this claim, supporting the Petitioner's case.Validity of Notice:The Corporate Debtor argued that the notice issued by the Petitioner was not valid and that there was no liability to pay the amount claimed. However, the confirmation of balance provided by the Corporate Debtor itself indicated the existence of the debt, strengthening the Petitioner's position.Appointment of Interim Resolution Professional:Mr. Nandkishor Vishnupant Deshpande consented to act as an Interim Resolution Professional, and the Bench approved his appointment to oversee the resolution process in compliance with the provisions of the Insolvency and Bankruptcy Code.Directions for Moratorium and CIRP:The Bench admitted the petition, declared a Moratorium, and issued specific directions, including prohibiting suits against the Corporate Debtor, ensuring continuity of essential goods/services supply, and appointing an Interim Resolution Professional. The Moratorium was to be effective until the completion of the Corporate Insolvency Resolution Process or until further orders were passed regarding the resolution plan or liquidation of the Corporate Debtor.