NCLT Chandigarh: Jurisdiction in Supply Dispute, Insolvency Proceedings Initiated

The National Company Law Tribunal, Chandigarh Bench, found jurisdiction in a case involving supply of goods and outstanding payment, where a balance default amount of Rs. 70,33,514.60 existed. The respondent did not respond to the demand notice under the Insolvency and Bankruptcy Code, 2016, leading to the initiation of insolvency resolution proceedings. The Tribunal appointed Mr. Sanjay Kumar Aggarwal as the Interim Resolution Professional, declared a moratorium, and issued specific directions for managing the corporate debtor's affairs.

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Issues Involved:
1. Jurisdiction of the Tribunal
2. Supply of Goods and Outstanding Payment
3. Demand Notice and Response
4. Alleged Oral Arrangement and Dispute
5. Compliance with Insolvency and Bankruptcy Code, 2016
6. Appointment of Interim Resolution Professional
7. Moratorium and Directions

Issue-wise Detailed Analysis:

1. Jurisdiction of the Tribunal:
The respondent-corporate debtor was incorporated on 30.08.2005 and has its registered office in Lalru, Derabassi Sub-Division, Punjab. Hence, the matter falls within the territorial jurisdiction of the National Company Law Tribunal, Chandigarh Bench.

2. Supply of Goods and Outstanding Payment:
The petitioner-operational creditor supplied goods/materials to the respondent-corporate debtor as per invoices from 06.09.2012 to 11.05.2017. Payments were adjusted/set-off in the books of account, resulting in a balance default amount of Rs. 70,33,514.60 as on 18.11.2017. The petitioner maintained a ledger account reflecting these transactions.

3. Demand Notice and Response:
The petitioner sent a demand notice dated 06.11.2017 under Section 8(1) of the Insolvency and Bankruptcy Code, 2016, which was delivered to the respondent on 07.11.2017. The respondent did not reply to the demand notice, and the petitioner filed the petition on 23.11.2017, complying with the 10-day period required by Section 9(1) of the Code.

4. Alleged Oral Arrangement and Dispute:
The respondent claimed an oral arrangement existed wherein it supplied "Yarn" against the price of chemicals from the petitioner. The petitioner allegedly stopped buying "Yarn," leading to an increase in the debt shown. The respondent contended that the petition was premature due to this arrangement and challenged the amount claimed by the petitioner.

5. Compliance with Insolvency and Bankruptcy Code, 2016:
The Tribunal found that the application filed in Form No.5 was complete and complied with Sections 9(3)(a), (b), and (c) of the Code. The respondent admitted an outstanding liability of Rs. 68,20,235/-, fulfilling the criteria for initiating the insolvency resolution process under Section 8(1) of the Code.

6. Appointment of Interim Resolution Professional:
The petitioner proposed Mr. Sanjay Kumar Aggarwal as the Interim Resolution Professional (IRP), who consented and provided necessary particulars in Form No.2. The Tribunal found no disciplinary proceedings against him and appointed him as the IRP for 30 days or as determined by the committee of creditors.

7. Moratorium and Directions:
The Tribunal declared a moratorium prohibiting:
(a) Institution or continuation of suits or proceedings against the corporate debtor.
(b) Transfer, encumbrance, alienation, or disposal of corporate debtor's assets.
(c) Actions to foreclose, recover, or enforce any security interest.
(d) Recovery of property by an owner or lessor.

The Tribunal directed the supply of essential goods/services to continue during the moratorium. The IRP was instructed to manage the corporate debtor's affairs, constitute the committee of creditors, make a public announcement, appoint two registered valuers, and file weekly reports to the Tribunal.

Conclusion:
The petition was admitted, initiating the corporate insolvency resolution process, and Mr. Sanjay Kumar Aggarwal was appointed as the Interim Resolution Professional. The moratorium was declared, and specific directions were issued to ensure compliance with the Code.

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