2019 (1) TMI 928 - Tri - Insolvency and Bankruptcy

Tribunal Admits Petition Under Insolvency Code, Imposes Moratorium

Ashapura Perfoclay Limited Versus Mahabir Techno Limited

The Tribunal admitted the petition under Section 9(5)(i) of the Insolvency and Bankruptcy Code, 2016, as it met all requirements without defects. A ... Corporate insolvency process - proof of outstanding debt - main contention raised in the reply filed vide diary No.1968 dated 04.06.2018 by the corporate debtor is that it has always disputed the amount/invoices on account of supply of sub-standard material - Held that:- Affidavit dated 21.02.2018 (Annexure-13 of the petition) has been filed by Sh. Sanjeev Khurana, Assistant General Manager of the operational creditor that the corporate debtor has neither disputed the existence of or amount of un-paid operational debt within the period specified by law nor provided the details of the pendency of the suit or arbitration proceedings in relation to any such dispute filed and further, there is no notice given by the corporate debtor relating to a dispute of the un-paid operational debt. We find that the affirmation made in the affidavit remain unrebutted by the corporate debtor in the reply filed. The conditions provided for in Section 9(5)(i) of the Code are satisfied and we therefore admit the petition filed by the operational creditor Ashapura Perfoclay Limited for initiating corporate insolvency resolution process in the case of the corporate debtor Mahabir Techno Limited. Issues Involved:1. Territorial Jurisdiction2. Authorization of Petition3. Existence of Operational Debt4. Delivery and Refusal of Demand Notice5. Response and Defense of Corporate Debtor6. Compliance with Section 9 of the Insolvency and Bankruptcy Code, 20167. Admission of Petition and Declaration of Moratorium8. Appointment of Interim Resolution ProfessionalIssue-wise Detailed Analysis:1. Territorial Jurisdiction:The corporate debtor, Mahabir Techno Limited, was incorporated on 30.12.1996 with its registered address in Kurukshetra, Haryana. The petition falls within the territorial jurisdiction of the Chandigarh Bench of the Tribunal.2. Authorization of Petition:The petition was signed by Sh. Sanjeev Khurana, Assistant General Manager of the operational creditor, M/s Ashapura Perfoclay Limited, authorized by a Board Resolution dated 14.11.2017.3. Existence of Operational Debt:The operational creditor supplied goods to the corporate debtor, who had a legal obligation to make payments within a stipulated period, failing which interest at 24% per annum was applicable. As of 06.06.2015, Rs. 14,72,856/- was due, and further supplies worth Rs. 21,97,748/- were made, leading to a total outstanding amount of Rs. 19,58,940/- as of 20.09.2017. The corporate debtor did not dispute the amount but failed to make the payment.4. Delivery and Refusal of Demand Notice:Mandatory notices dated 20.12.2017 were sent by speed post and were refused upon delivery attempt on 26.12.2017. The affidavit affirmed that the corporate debtor neither disputed the debt nor provided details of any suit or arbitration proceedings.5. Response and Defense of Corporate Debtor:The corporate debtor claimed that the supplied goods were sub-standard and sought replacements, which were not provided. They alleged an oral agreement for adjusting the disputed invoices in future transactions. However, no specific averments or supporting evidence were provided. The corporate debtor expressed willingness to settle the dispute mutually or through arbitration.6. Compliance with Section 9 of the Insolvency and Bankruptcy Code, 2016:The petition met the requirements of Section 9(1), (2), and (3) of the Code, including the delivery of demand notice, filing in prescribed Form-5, and an affidavit of no dispute. The operational creditor's bank confirmed no payment was received from the corporate debtor during the relevant period.7. Admission of Petition and Declaration of Moratorium:The petition was admitted under Section 9(5)(i) of the Code, as it was complete, and no defects were pointed out. The Tribunal declared a moratorium prohibiting suits, transferring assets, foreclosing security interests, and recovering property occupied by the corporate debtor. The supply of essential goods or services to the corporate debtor was directed to continue during the moratorium period.8. Appointment of Interim Resolution Professional:Mr. Vinod Kumar Mahajan was appointed as the Interim Resolution Professional (IRP). His duties include taking control of the corporate debtor's assets, making a public announcement, and constituting a committee of creditors. The IRP is required to send regular progress reports to the Tribunal.The Tribunal directed the corporate debtor, its directors, and associated personnel to cooperate with the IRP in managing the corporate debtor's affairs and accessing its books and records. The order was communicated to both parties and the IRP.