Tribunal admits insolvency application against corporate debtor, appoints Interim Resolution Professional

The Tribunal admitted the application filed by M/s. Avon Clothing Private Limited under Section 9 of the Insolvency and Bankruptcy Code, 2016 against M/s. Siddarth Intercrafts Private Limited. The corporate debtor's objections were considered trivial and unsupported, leading to the appointment of an Interim Resolution Professional and the declaration of a moratorium under Section 14(1) of the Code. The Tribunal found the applicant entitled to claim its dues, and the application was disposed of accordingly.

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Issues Involved:
1. Debt and Default
2. Dispute Raised by Corporate Debtor
3. Jurisdiction
4. Limitation
5. Appointment of Interim Resolution Professional (IRP)
6. Moratorium

Issue-wise Detailed Analysis:

1. Debt and Default:
The application was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 by the operational creditor, M/s. Avon Clothing Private Limited, against the corporate debtor, M/s Siddarth Intercrafts Private Limited. The applicant claimed an outstanding amount of Rs. 20,16,921/- for the supply of grey cloth, which was not paid by the corporate debtor despite several reminders and a demand notice. The corporate debtor admitted to the supply of goods and receipt of invoices but raised objections regarding the quality, quantity, and timing of the supply.

2. Dispute Raised by Corporate Debtor:
The corporate debtor raised multiple objections, including issues with the quality and quantity of goods, authorization of the applicant's representative, incomplete bank statements, and non-compliance with Section 9(3)(c) of the Code. The applicant countered these objections, stating that the objections were technical and had been addressed. The Tribunal found the objections to be trivial and unsupported by concrete evidence, categorizing them as a "moonshine dispute." The Tribunal referred to precedents from the Supreme Court and High Courts, emphasizing that a genuine dispute must be supported by evidence and not be a mere afterthought.

3. Jurisdiction:
The registered office of the corporate debtor is situated in Jaipur, giving the Tribunal jurisdiction to entertain the application.

4. Limitation:
The default occurred on 22.03.2017, and the application was filed within the period of limitation, making it timely and valid.

5. Appointment of Interim Resolution Professional (IRP):
The applicant named Mr. Brij Kishore Sharma as the Interim Resolution Professional, who was duly appointed by the Tribunal. The IRP was directed to perform his functions as per Sections 15, 17, 18, 19, 20, and 21 of the Code, with all personnel connected with the corporate debtor required to cooperate with the IRP.

6. Moratorium:
Upon admission of the application, a moratorium under Section 14(1) of the Code was declared, prohibiting actions against the corporate debtor. The moratorium would remain effective until the completion of the corporate insolvency resolution process or until an order for liquidation or approval of a resolution plan is passed.

Conclusion:
The Tribunal found the application to be complete and the applicant entitled to claim its dues. The objections raised by the corporate debtor were deemed trivial and unsupported by evidence. The application was admitted under Section 9(5) of the Insolvency and Bankruptcy Code, 2016, and a moratorium was declared. The IRP was appointed to manage the corporate insolvency resolution process, with all relevant parties required to cooperate. The application was disposed of in terms of the above order.

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