Operational Creditor's Claim Upheld, CIRP Initiated for Defaulted Payment

The Tribunal admitted the application for the initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016. The Operational Creditor's claim for outstanding dues against the Corporate Debtor was upheld, leading to the appointment of an Interim Resolution Professional (IRP) and the imposition of a moratorium under Section 14(1) of the Code. The Tribunal found the default in payment of operational debt to be established and took necessary steps to proceed with the CIRP process.

---

---

Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016.
2. Existence of operational debt and default by the Corporate Debtor.
3. Pre-existing disputes raised by the Corporate Debtor.
4. Appointment of Interim Resolution Professional (IRP).
5. Imposition of moratorium under Section 14(1) of the Insolvency and Bankruptcy Code, 2016.

Detailed Analysis:

1. Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016
The application was filed by M/s. Quazar Infrastructure Private Limited (Applicant), an Operational Creditor, under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC, 2016), read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. The Applicant sought to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s. Minarch Overseas Pvt. Ltd. (Respondent), the Corporate Debtor.

2. Existence of Operational Debt and Default by the Corporate Debtor
The Applicant was awarded work contracts by the Respondent for civil, plumbing, fire fighting, and electrical works. The Applicant carried out the work and raised RA bills totaling Rs. 11,09,46,395/-. Payments received amounted to Rs. 6,14,15,261/- with TDS deductions of Rs. 34,30,427/-. The outstanding balance claimed was Rs. 4,61,00,707/-. Despite multiple reminders, the Respondent failed to pay the dues. A demand notice under Section 8 of the IBC, 2016 was sent on 22-3-2018, but the Respondent did not clear the outstanding amount.

3. Pre-existing Disputes Raised by the Corporate Debtor
The Respondent disputed the claim, stating that the Applicant unilaterally stopped work in April 2015 and did not complete the project. The Respondent argued that the last bill was provided in February 2015, and the Applicant failed to submit final bills or provide notice of completion as required. The Respondent claimed overpayment of Rs. 1,03,85,442/- based on their measurements. However, the Tribunal noted that the Respondent failed to raise any material dispute or provide proof of dispute before the demand notice was issued, as required by precedent cases like Innoventive Industries Ltd. v. ICICI Bank Ltd. and Mobilox Innovations (P.) Ltd. v. Kirusa Software (P.) Ltd.

4. Appointment of Interim Resolution Professional (IRP)
The Applicant did not propose the name of any IRP. Consequently, the Tribunal appointed Mr. Vinod Kumar Chaurasia as the IRP, directing him to take necessary steps as per Sections 15, 17, 18, 20, and 21 of the Code. The Operational Creditor was instructed to deposit Rs. 2 lacs with the IRP to cover expenses, subject to adjustment by the Committee of Creditors.

5. Imposition of Moratorium under Section 14(1) of the Insolvency and Bankruptcy Code, 2016
Upon admitting the application, the Tribunal imposed a moratorium as per Section 14(1) of the IBC, 2016, prohibiting actions against the Corporate Debtor. The Tribunal directed the registry to communicate the order to relevant parties and update the status of the Corporate Debtor on the Registrar of Companies' website.

Conclusion
The Tribunal admitted the application, establishing that the Operational Creditor was entitled to claim its dues, and the default in payment of the operational debt was beyond doubt. The Tribunal's jurisdiction was confirmed, and the necessary procedural steps for the initiation of CIRP were outlined, including the appointment of an IRP and the imposition of a moratorium.

---