Tribunal Orders Corporate Insolvency Resolution Process for Unpaid Travel Services

The Tribunal admitted the application under section 9 of the Insolvency and Bankruptcy Code, 2016, for Corporate Insolvency Resolution Process. The Applicant, an Operational Creditor, sought initiation against the Respondent, a Corporate Debtor, due to non-payment for travel services provided. Despite the Respondent's claims of a pre-existing dispute, the Tribunal found in favor of the Applicant, emphasizing the need for a genuine dispute to reject insolvency proceedings. An Interim Resolution Professional was appointed, and a moratorium was imposed on the Respondent, with instructions for necessary notifications to relevant parties.

---

---

Issues:
Application under section 9 of Insolvency and Bankruptcy Code, 2016 for Corporate Insolvency Resolution Process.

Analysis:
The Applicant, an Operational Creditor, filed an application under section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process against the Respondent, a Corporate Debtor. The Applicant provided travel-related services to the Respondent under a Travel Service Agreement. Despite raising invoices and reminders, the Respondent failed to make payments, leading to the Applicant stopping services. The Applicant sent a demand notice under section 8 of the Code, but the Respondent did not respond. The total debt due was &8377; 40,07,101.16, along with interest. The Respondent disputed the debt, claiming an oral agreement for forbearance, but the Applicant provided evidence of outstanding dues and non-payment by the Respondent.

The Tribunal noted that the Respondent failed to prove the absence of outstanding dues and acknowledged the invoices and ledger accounts. The Respondent's claim of a pre-existing dispute was dismissed as the email acknowledging the debt was submitted by the Applicant. Citing legal precedents, the Tribunal emphasized the need for a genuine dispute to reject an insolvency application. The Applicant complied with the necessary sections of the Code, including submitting an affidavit and bank statements. The Tribunal had jurisdiction over the matter as the Respondent's registered office was in New Delhi. Consequently, the application was admitted, and an Interim Resolution Professional was appointed. The Operational Creditor was directed to deposit a sum with the IRP for expenses. A moratorium was imposed on the Respondent, and the Registry was instructed to notify relevant parties about the order promptly.

---