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of <h1>Tribunal rules in favor of applicant in insolvency case, appoints Resolution Professional</h1> The Tribunal ruled in favor of the applicant, admitting the application under Section 9 of the Insolvency and Bankruptcy Code. It found the respondent ... Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT:- It is pertinent to note that the applicant has placed on record all the invoices, stating that the respondent itself had acknowledged the said invoices. There is no documentary evidence on record to show that any complaint was ever made or any proceedings were initiated by the respondent regarding the alleged mala fide acts of the applicant nor any correspondence is placed on record with respect to issuing fake/ bogus bills. Once the debt shown as due, it is for respondent to prove that there are no outstanding dues to be paid to the applicant. There has been much cloud in the submission of the respondent - Therefore, without any specific details of material particulars or evidence the fact of existence of a dispute cannot be sustained. In the present case, there is no such dispute as pre-existing, the dispute which was being claimed to be pre-existing by the corporate debtor did not survive and section 8 notice was issued much later on 01.11.2018 - the dispute was settled and the respondent has not challenged or taken any other steps against the decision of CERA, albeit a hypothetical or illusory dispute has been raised by the 'Corporate Debtor' and the same appears to be a moonshine defense. The present application is complete and the Operational Creditor is entitled to claim its dues, establishing the default in payment of the operational debt beyond doubt, and fulfilment of requirements under section 9(5) of the Code. Hence, the present application is admitted - Moratorium declared. Issues Involved:- Application under Section 9 of Insolvency and Bankruptcy Code, 2016 for initiation of Corporate Insolvency Resolution Process (CIRP) against a company.- Dispute regarding outstanding dues for services rendered by the applicant.- Allegations of deficient services and unprofessional conduct by the respondent.- Existence of a pre-existing dispute and attempts at conciliation and mediation.- Legal requirements and evidence for establishing default in payment of operational debt.- Appointment of Interim Resolution Professional and deposit for meeting expenses.- Imposition of moratorium on the respondent and communication of the order to relevant parties.Detailed Analysis:1. The application was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 by a partnership firm seeking to initiate the Corporate Insolvency Resolution Process against the respondent company for non-payment of dues amounting to Rs. 11,93,375. The applicant provided details of the services rendered, invoices raised, and the failure of the respondent to clear the outstanding amount despite multiple reminders and a demand notice under Section 8 of the Code.2. The respondent contested the application by alleging deficient services and unprofessional behavior on the part of the applicant, leading to disruptions in work and loss of labor hours. The respondent claimed the existence of a pre-existing dispute, citing attempts at resolution through a Construction Equipment Rental Forum (CERA) and email communications acknowledging settlement of payment dues.3. The Tribunal analyzed the evidence presented by both parties, including invoices, email correspondences, and the lack of any formal complaint or dispute resolution mechanisms initiated by the respondent. The Tribunal referred to legal precedents to determine the validity of the pre-existing dispute claimed by the respondent and emphasized the need for genuine disputes rather than hypothetical or illusory claims.4. In light of the evidence and legal principles, the Tribunal found in favor of the applicant, concluding that the application met the requirements under Section 9(5) of the Code. The Tribunal admitted the application, established the default in payment of operational debt, and asserted its jurisdiction to proceed with the case.5. The Tribunal appointed an Interim Resolution Professional, directed the Operational Creditor to deposit a sum of Rs. 2 lakhs for expenses, imposed a moratorium on the respondent as per Section 14(1) of the Code, and instructed the registry to communicate the order to relevant parties within a specified timeframe.6. The judgment encompassed a comprehensive analysis of the legal and factual aspects of the case, ensuring adherence to procedural requirements, consideration of evidence, and application of relevant legal principles to resolve the dispute and initiate the insolvency resolution process effectively.This detailed analysis covers the key issues involved in the judgment, providing a thorough understanding of the legal reasoning and decision-making process undertaken by the Tribunal.
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