Operational Creditor's Petition Upheld, Insolvency Resolution Process Initiated

The Tribunal found the petition maintainable under sections 8 and 9 of the Insolvency and Bankruptcy Code, 2016. It dismissed the corporate debtor's objections, ruling that the operational creditor had complied with requirements and established default. The insolvency resolution process was initiated, appointing an Interim Resolution Professional and imposing a moratorium under section 14 of the I&B Code, 2016. The Tribunal directed further actions as per sections 15, 17, and 18, with a report to be filed within the statutory period.

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Issues Involved:
1. Maintainability of the petition under sections 8 and 9 of the Insolvency and Bankruptcy Code, 2016 (I&B Code, 2016).
2. Alleged breach of contract by the operational creditor.
3. Dispute raised by the corporate debtor regarding the quality and specifications of goods supplied.
4. Existence of default and compliance with procedural requirements under the I&B Code, 2016.

Detailed Analysis:

1. Maintainability of the Petition:
The corporate debtor contended that the petition was not maintainable under section 8(1) of the I&B Code, 2016, due to the operational creditor's failure to produce English translations of certain documents and the incomplete nature of the petition. The Tribunal found these contentions unsustainable as the petitioner had produced legible copies and English translations as directed.

2. Alleged Breach of Contract:
The corporate debtor argued that the operational creditor failed to supply goods as per the specifications in the purchase orders, specifically lacking Test Certificates and Guarantee Certificates, constituting a breach of contract. The Tribunal noted that the corporate debtor received the goods without protest and issued a cheque promising to repay the amount due as per the invoices, indicating acceptance of goods.

3. Dispute Regarding Quality and Specifications:
The corporate debtor claimed that the goods supplied were not as per the terms stipulated in the purchase orders, referring to a disparity between the description in the purchase orders and the invoices. The Tribunal observed that despite the dissimilarity in the description, the corporate debtor accepted the goods and issued cheques, which were later dishonoured. The Tribunal concluded that the dispute raised by the corporate debtor was not bona fide and was raised with an ulterior motive to object to the petition.

4. Existence of Default and Procedural Compliance:
The Tribunal examined the sequence of events and payments made by the corporate debtor, noting that despite partial payments, a significant amount remained unpaid. The Tribunal found that the operational creditor had established the existence of default and had complied with the procedural requirements under sections 8 and 9 of the I&B Code, 2016, including the issuance of a demand notice and obtaining a certificate from the bank confirming non-payment of the debt.

Conclusion:
The Tribunal held that the objections raised by the corporate debtor were unsustainable under law and found that the petition was complete and maintainable. The existence of default was established, and the petition for initiating the insolvency resolution process was admitted. The Tribunal appointed an Interim Resolution Professional and declared a moratorium in terms of section 14 of the I&B Code, 2016, directing the interim resolution professional to take necessary steps as per sections 15, 17, and 18 and file a report within the statutory period.

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