2019 (10) TMI 56 - AT - Insolvency and Bankruptcy

Appeal allowed, CIRP order set aside. Pre-existing dispute settled. Application withdrawn. Parties directed to pay.

Dinesh Kishinchandgajria Versus Kanan Graphics Pvt. Ltd. And Anr.

Dinesh Kishinchandgajria Versus Kanan Graphics Pvt. Ltd. And Anr. - TMI Issues:Initiation of Corporate Insolvency Resolution Process based on a plea of pre-existing dispute.Analysis:The appeal was filed against the order to initiate Corporate Insolvency Resolution Process against the Corporate Debtor. The proceeding was initiated by an Operational Creditor under the Insolvency and Bankruptcy Code, 2016 (I&B Code). The Appellant claimed a pre-existing dispute, which was not acknowledged due to lack of evidence.During the hearing, evidence in the form of emails was presented to support the existence of a pre-existing dispute regarding the supply of goods. It was revealed that the parties had settled the matter, with 50% of the payment already received by the 1st Respondent. The Committee of Creditors had not been constituted at that time.The Resolution Professional informed the Tribunal about the expenses incurred and the fee entitlement. After negotiations, a settlement was reached, and the impugned order was set aside. The 1st Respondent was allowed to withdraw the application under Section 9 of the I&B Code, and the proceedings before the Adjudicating Authority were closed.Both the Appellant and the Corporate Debtor were directed to jointly pay a sum to the Resolution Professional within a specified time frame. Consequently, all orders appointing the Interim Resolution Professional, declaring moratorium, and other related actions were set aside. The Respondent Company was released from the legal constraints and permitted to operate independently through its Board of Directors immediately.In conclusion, the appeal was allowed with the mentioned observations and directions, without any costs imposed.