Tribunal admits insolvency petition, rejects corporate debtor's claim, appoints IRP, declares moratorium.

The tribunal admitted the insolvency petition, rejecting the corporate debtor's claim of a pre-existing dispute and confirming the operational debt. An Interim Resolution Professional (IRP) was appointed, and a moratorium was declared to facilitate the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC) 2016. Compliance with procedural requirements was noted, and the matter was scheduled for a progress report.

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Issues Involved:
1. Existence of operational debt.
2. Alleged pre-existing dispute.
3. Compliance with procedural requirements under the Insolvency and Bankruptcy Code (IBC) 2016.
4. Appointment of Interim Resolution Professional (IRP).
5. Declaration of moratorium.

Detailed Analysis:

1. Existence of Operational Debt:
The petitioner, an operational creditor, filed an insolvency petition under Section 9 of the Insolvency and Bankruptcy Code 2016, seeking the initiation of Corporate Insolvency Resolution Process (CIRP) against the corporate debtor. The petitioner provided details of various work contracts and purchase orders issued by the corporate debtor, along with running bills and invoices amounting to Rs. 53,667,324. The petitioner contended that despite the completion of the contracted work, the corporate debtor failed to clear the outstanding dues, leaving a balance of Rs. 4,258,844 unpaid.

2. Alleged Pre-existing Dispute:
The corporate debtor argued for the dismissal of the petition on the grounds of pre-existing disputes, citing delays and quality issues in the completion of work by the petitioner. The corporate debtor presented email correspondences highlighting these delays and deficiencies. However, the tribunal found that the emails only indicated requests to expedite work and did not constitute a substantial and genuine dispute. The tribunal concluded that the dispute raised by the corporate debtor was superficial and unsupported by valid evidence, thus not meeting the criteria for a pre-existing dispute under Section 8(2) of the IBC.

3. Compliance with Procedural Requirements:
The tribunal noted that the petitioner met the requirements of Sections 5(20) and 5(21) of the IBC, establishing the existence of operational debt and the petitioner's status as an operational creditor. The petitioner had also complied with Section 9(3)(b) by filing an affidavit and bank statements. The demand notice under Section 8(1) was duly served to the corporate debtor, who failed to bring any substantial dispute within the statutory period of 10 days.

4. Appointment of Interim Resolution Professional (IRP):
As the petitioner did not propose the name of an insolvency professional, the tribunal appointed Mr. Arun Gupta as the Interim Resolution Professional (IRP) from the panel recommended by the Insolvency and Bankruptcy Board of India (IBBI). The IRP was directed to carry out functions as specified under the Code, including the collation of claims and determination of the financial position of the corporate debtor.

5. Declaration of Moratorium:
The tribunal declared a moratorium under Section 14 of the IBC, prohibiting the institution or continuation of suits or proceedings against the corporate debtor, transferring or disposing of assets, and recovering property by owners or lessors. The supply of essential goods or services to the corporate debtor was to continue uninterrupted during the moratorium period. The tribunal directed the IRP to inform the progress of insolvency proceedings and submit compliance reports.

Conclusion:
The tribunal admitted the insolvency petition, finding no substantial pre-existing dispute and confirming the existence of operational debt. The appointment of the IRP and declaration of moratorium were ordered to facilitate the CIRP, ensuring compliance with the procedural requirements of the IBC. The matter was listed for a progress report on 13.6.2018.

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