Insolvency Tribunal Initiates Corporate Insolvency Process, Imposes Moratorium, Appoints Interim Resolution Professional.

The NCLT admitted the application under Section 9 of the I&B Code filed by the Operational Creditor against the Corporate Debtor for default in payment. The Tribunal imposed a moratorium under Section 14, prohibiting certain actions against the Corporate Debtor, and appointed Mr. Dileep K.P as the Interim Resolution Professional to oversee the corporate insolvency resolution process. Despite the Corporate Debtor's claims of a pre-existing dispute and issues with interest calculation, the Tribunal found no substantial evidence supporting these claims. The Tribunal did not address the threshold limit contention, focusing on the validity of the claim.

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Issues Involved:
1. Default in payment by the Corporate Debtor.
2. Existence of a pre-existing dispute.
3. Maintainability of the application under Section 9 of the I&B Code.
4. Calculation and claim of interest by the Operational Creditor.
5. Threshold limit for filing applications under the I&B Code.
6. Appointment of Interim Resolution Professional (IRP).

Issue-wise Detailed Analysis:

1. Default in Payment by the Corporate Debtor:
The Operational Creditor, involved in the manufacture and supply of aluminium powder-coated grills and allied products, supplied materials to the Corporate Debtor based on purchase orders. Despite raising invoices, the Corporate Debtor failed to make payments amounting to Rs. 4,64,571/- as of 13.04.2018, along with interest @ 24% p.a. The total outstanding debt, including interest calculated till 31st January 2020, was Rs. 6,68,134/-. The Corporate Debtor availed input tax credit for the invoices, indicating acceptance of the goods supplied.

2. Existence of a Pre-existing Dispute:
The Corporate Debtor contended that the application under Section 9 of the I&B Code was not maintainable due to a pre-existing dispute. They argued that they had informed the Operational Creditor about the dispute within the statutory period of 10 days from receiving the demand notice. However, the Tribunal, referencing the Supreme Court judgment in "Innoventive Industries Ltd. v. ICICI Bank and Anr.," determined that no substantial pre-existing dispute was evident apart from a hypothetical or illusory dispute raised by the Corporate Debtor.

3. Maintainability of the Application under Section 9 of the I&B Code:
The Corporate Debtor argued that the application should be dismissed as the dispute was notified within the statutory period. However, the Tribunal found that the Corporate Debtor's claims did not constitute a valid pre-existing dispute. The Tribunal concluded that the application was complete in all respects and the Operational Creditor had successfully established the default in payment of the operational debt.

4. Calculation and Claim of Interest by the Operational Creditor:
The Corporate Debtor disputed the interest claimed by the Operational Creditor, arguing it was calculated with malafide intentions and was exorbitant. However, the Tribunal did not find any substantial evidence to support the Corporate Debtor's claims and determined that the interest calculation was valid as per the terms agreed upon.

5. Threshold Limit for Filing Applications under the I&B Code:
The Corporate Debtor contended that the total claim amount of Rs. 6,68,134/- was below the threshold limit of Rs. 1,00,00,000/- as per the notification dated 24.03.2020 by the Ministry of Corporate Affairs. The Tribunal did not address this contention directly in the findings, focusing instead on the validity of the claim and the existence of a pre-existing dispute.

6. Appointment of Interim Resolution Professional (IRP):
The Tribunal appointed Mr. Dileep K.P as the Interim Resolution Professional (IRP) to carry out the functions as mentioned under the I&B Code. The IRP was tasked with performing duties as per Sections 15, 17, 18, 19, 20, and 21 of the IBC.

Order:
The application filed by the Operational Creditor under Section 9 of the I&B Code was admitted. The Tribunal imposed a moratorium as prescribed under Section 14 of the Code, prohibiting the institution of suits, transferring assets, and recovering properties, among other actions. The Tribunal directed the public announcement of the corporate insolvency resolution process and appointed Mr. Dileep K.P as the IRP. The order was to be communicated to all parties involved.

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