Tribunal Admits Partnership Firm's Petition Against Corporate Debtor for Unpaid Yarn Debt

The Tribunal admitted the petition filed by a partnership firm against a corporate debtor for non-payment of debt arising from the sale of yarn. The petitioner complied with all Insolvency and Bankruptcy Code requirements, including proving the existence of debt and default. The Tribunal dismissed the corporate debtor's dispute regarding the delivery of goods as unsupported and declared a moratorium, prohibiting certain actions until the resolution process concludes. The petition was admitted, and an Interim Resolution Professional was to be appointed formally.

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Issues Involved:
1. Existence of Debt and Default
2. Compliance with Insolvency and Bankruptcy Code (IBC) Requirements
3. Dispute Regarding Delivery of Goods
4. Timeliness of the Claim
5. Appointment of Interim Resolution Professional (IRP)
6. Declaration of Moratorium

Detailed Analysis:

1. Existence of Debt and Default:
The petitioner, a partnership firm engaged in trading yarn, filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, against the corporate debtor, Ajay Knitwears and Fabrics Private Limited. The debt arose from the sale of yarn, and the petitioner provided various invoices and a demand notice dated 11.08.2017. The corporate debtor acknowledged a debt of Rs. 8,98,285 in its financial statement for the year ending 31.03.2016, which the petitioner argued as an explicit acknowledgment of the debt.

2. Compliance with Insolvency and Bankruptcy Code (IBC) Requirements:
The petitioner complied with all procedural requirements under Sections 8 and 9 of the Code, including sending a demand notice, filing the application in the prescribed form, and providing necessary affidavits and certificates from financial institutions. The Tribunal confirmed that the petition was filed after the expiry of the 10-day period from the date of delivery of the demand notice, fulfilling the requirements of Section 9(1) to (3) of the Code.

3. Dispute Regarding Delivery of Goods:
The corporate debtor contended that no goods were delivered against the invoices and requested proof of delivery through letters dated 20.06.2009 and 24.07.2010. The Tribunal found these letters to be created documents unsupported by any proof, as they lacked dispatch records and were sent to an incorrect address. The Tribunal dismissed the corporate debtor's argument as spurious, hypothetical, and illusory, emphasizing that the dispute raised was not genuine.

4. Timeliness of the Claim:
The corporate debtor argued that the claim was time-barred. However, the Tribunal noted that the acknowledgment of the debt in the financial statement for the year ending 31.03.2016 extended the limitation period. The Tribunal also observed that the deletion of the trade payable in the balance sheet for March 2017 appeared to be an afterthought. Thus, the Tribunal concluded that the claim was not time-barred.

5. Appointment of Interim Resolution Professional (IRP):
The petitioner proposed Mr. Anjum Goyal as the Interim Resolution Professional (IRP), providing the necessary written communication and confirming that there were no pending disciplinary proceedings against him. The Tribunal found the proposal and documentation to be in order.

6. Declaration of Moratorium:
The Tribunal admitted the petition and declared a moratorium under Section 14(1) of the Code, prohibiting the institution or continuation of suits, transferring or disposing of assets, and actions to foreclose or recover property. The moratorium would remain effective until the completion of the corporate insolvency resolution process or until the Tribunal approved a resolution plan or ordered liquidation.

Conclusion:
The Tribunal concluded that the petitioner had complied with all necessary requirements and that the corporate debtor's dispute was not genuine. The petition was admitted, and a moratorium was declared, with the matter listed for the formal appointment of the Interim Insolvency Resolution Professional.

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