Tribunal Admits Petition for Corporate Insolvency Resolution

The Tribunal admitted the petition filed by Kumar Brothers Pharma Pvt. Ltd. against Vascular Therapeutics India Pvt. Ltd. for initiating the Corporate Insolvency Resolution Process. A moratorium was declared, prohibiting suits and recovery actions against the Corporate Debtor. Mr. Mahesh Sureka was appointed as the Interim Resolution Professional to oversee the process in accordance with the Insolvency and Bankruptcy Code, 2016.

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Issues Involved:
1. Existence of Operational Debt and Default
2. Validity of Oral Agreement and Written Instructions
3. Admission of Liability by the Corporate Debtor
4. Applicability of Email Instructions
5. Admissibility of the Petition under Section 9 of IBC, 2016
6. Declaration of Moratorium and Appointment of Interim Resolution Professional (IRP)

Detailed Analysis:

1. Existence of Operational Debt and Default:
The Petitioner, Kumar Brothers Pharma Pvt. Ltd., claimed an amount of Rs. 57,62,383/- including interest from the Corporate Debtor, Vascular Therapeutics India Pvt. Ltd. The Corporate Debtor denied the liability, arguing that the payment was contingent on the acceptance of the returned stock by the principal supplier, India Medtronic Pvt. Ltd. However, the Tribunal found that the debt of Rs. 46,89,274/- was acknowledged in the Corporate Debtor's books of accounts, qualifying it as an operational debt under Section 3(11) and Section 5(21) of the IBC, 2016. The Tribunal also concluded that there was a default as defined under Section 3(12) of the IBC, 2016.

2. Validity of Oral Agreement and Written Instructions:
The Corporate Debtor contended that there was an oral agreement stipulating that payments would be made only upon the acceptance of the returned stocks by the principal supplier. The Petitioner denied the existence of any such oral agreement. The Tribunal noted that there was no written agreement supporting the Corporate Debtor's claim and that the Petitioner had returned the NV products based on written instructions from the Corporate Debtor, which included a 10% deduction for restocking charges.

3. Admission of Liability by the Corporate Debtor:
The Tribunal highlighted the letter from the Corporate Debtor's Chartered Accountant, which certified that an amount of Rs. 46,80,274.25/- was payable to the Petitioner as of 31st March 2017. This admission in the Corporate Debtor's books of accounts was considered as conclusive evidence of the debt, reinforcing the Petitioner’s claim.

4. Applicability of Email Instructions:
The Corporate Debtor relied on an email dated 08.10.2015, which pertained to the return of PV products and stipulated that payments would be made only upon acceptance by the principal supplier. The Tribunal found that this email was not applicable to the NV products in question. Therefore, the Corporate Debtor's contention based on this email was dismissed.

5. Admissibility of the Petition under Section 9 of IBC, 2016:
The Tribunal found that the application filed by the Operational Creditor was in proper Form 5, as prescribed under the Adjudicating Authority Rules, and was complete. The operational debt exceeded the threshold limit, and the default was established. Consequently, the application for initiating the Corporate Insolvency Resolution Process (CIRP) was admitted.

6. Declaration of Moratorium and Appointment of Interim Resolution Professional (IRP):
Following the admission of the petition, the Tribunal declared a moratorium under Section 14 of the IBC, 2016, prohibiting the institution of suits, transferring of assets, and recovery actions against the Corporate Debtor. The Tribunal appointed Mr. Mahesh Sureka as the Interim Resolution Professional (IRP) to carry out the functions as mentioned under the IBC, 2016. The IRP was directed to make a public announcement of the CIRP initiation and comply with other provisions of the Code, including Sections 15 and 18.

Conclusion:
The Tribunal admitted the petition filed by Kumar Brothers Pharma Pvt. Ltd. against Vascular Therapeutics India Pvt. Ltd. for initiating the Corporate Insolvency Resolution Process. The moratorium was declared, and Mr. Mahesh Sureka was appointed as the Interim Resolution Professional. The commencement of the CIRP was effective from the date of the order.

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