2020 (10) TMI 11 - Tri - Insolvency and Bankruptcy

Debt dispute resolved in favor of creditor, CIRP initiated

Manoj Kumar Das Versus Horizon Dwellings Pvt. Ltd.

The tribunal admitted the petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, initiating Corporate Insolvency Resolution Process (CIRP) ... Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT:- The Petitioner succeeded in proving its debt and the Corporate Debtor failed to discharge its payment liability towards supply of services to corporate debtor as per its invoices. The Corporate Debtor has not paid the outstanding debt owed to operational creditor despite demand notice delivered upon him under Sec 8 of the Code. Therefore, the amount and default on the side of the Operational Creditor stand proved in the present case. Therefore, petitioner is found entitled to initiate corporate insolvency resolution process as against the Corporate Debtor. The Petitioner, in the present IB petition, has complied with Section 9(3) (b) and 9(3)(c) by filing supporting affidavit. As the petitioner fulfils the requirement for invoking CIRP in terms of Section 9 of the Code, the present application is found complete and the default of debts is established. Hence, the present petition deserves admission. Petition admitted - moratorium declared. Issues Involved:1. Existence of debt and default by the corporate debtor.2. Dispute regarding the quantum of the amount due.3. Applicability of pre-existing disputes.4. Compliance with procedural requirements under the Insolvency and Bankruptcy Code (IBC).5. Appointment of Interim Resolution Professional (IRP).Detailed Analysis:1. Existence of Debt and Default by the Corporate Debtor:The petition was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 by the operational creditor for initiation of Corporate Insolvency Resolution Process (CIRP) against the corporate debtor. The operational creditor and corporate debtor had an agreement dated 19.09.2013, with a monthly consideration for services provided. Despite rendering services as per the contract, the operational creditor received only partial payments and issued a demand notice under Section 8 of IBC on 26.02.2019 for the outstanding amount of Rs. 33,42,483.83/-. The corporate debtor failed to pay the due amount or respond to the demand notice, leading to the filing of the petition.2. Dispute Regarding the Quantum of the Amount Due:The corporate debtor contended the existence of a dispute regarding the quantum of the amount due, claiming that the entire amount had been paid and no further amount was liable. They argued that the petition was not maintainable due to the exorbitant and arbitrary amount claimed by the petitioner. The operational creditor countered this by stating that disputes regarding the quantum of debt do not amount to pre-existing disputes, supported by the judgment of NCLT, Delhi Bench.3. Applicability of Pre-existing Disputes:The corporate debtor argued that there was a deficiency in the quality of services provided and that disputes should be resolved by arbitration as per the agreement. They relied on the judgment of Hon'ble NCLAT in Drulum India Pvt. Ltd. v/s Sharma Kalypso Pvt. Ltd., which was stayed by the Hon'ble Apex Court. The tribunal observed that disputes regarding the quantum of the amount, in the absence of any suit or arbitration, do not fall within the ambit of a pre-existing dispute under Section 9 of the Code. The operational creditor's claim was found to be valid as the default amount exceeded Rs. 1 lakh, triggering the CIRP.4. Compliance with Procedural Requirements under the IBC:The petitioner complied with Section 9(3)(b) and 9(3)(c) by filing supporting affidavits. The tribunal noted that the operational creditor provided all necessary documents, including the agreement, invoices, and bank statements, proving the debt and default. The application was found to be complete, and the default of debts was established.5. Appointment of Interim Resolution Professional (IRP):The tribunal admitted the petition and initiated the CIRP against the corporate debtor. A moratorium under Section 14 of the IBC was declared, prohibiting the institution of suits, transfer of assets, and recovery actions against the corporate debtor. The tribunal appointed Mr. Abhiman Singh as the Interim Resolution Professional (IRP) and directed him to cause a public announcement of the CIRP immediately.Conclusion:The tribunal concluded that the petitioner succeeded in proving the debt and default. The corporate debtor's arguments regarding the dispute and quantum of the amount were not accepted as pre-existing disputes. The petition was admitted, and the CIRP was initiated with the appointment of an IRP. The tribunal ensured compliance with procedural requirements and declared a moratorium to facilitate the CIRP.