Operational Creditor's Insolvency Petition Rejected for Lack of Evidence

The Tribunal rejected the petition for Corporate Insolvency Resolution Process under section 9 of the Insolvency and Bankruptcy Code, 2016. The Operational Creditor failed to provide sufficient evidence of debt acknowledgment, payment, and proper authorization for filing the petition. The lack of documentary proof of services provided, debt acknowledgment, and absence of required affidavit under the Code led to the conclusion that the petition lacked merit. Consequently, the petition was dismissed due to the Operational Creditor's failure to establish the due and payable nature of the debt.

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Issues:
- Operational debt due to non-payment by the Corporate Debtor
- Validity of the petition under section 9 of the Insolvency and Bankruptcy Code, 2016
- Authorization for filing the petition by the Power of Attorney Holder
- Lack of evidence for debt acknowledgment and payment

Operational Debt Issue:
The petition was filed by an Operational Creditor seeking admission under section 9 of the Insolvency and Bankruptcy Code, 2016, due to an operational debt of Rs. 6,63,118 along with interest. The Operational Creditor had provided services as per a Purchase Order but the Corporate Debtor failed to complete the payment, leading to the petition for Corporate Insolvency Resolution Process.

Validity of Petition Issue:
The Corporate Debtor contested the operational debt claim, citing a lack of evidence of debt acknowledgment and breach of obligations by the Operational Creditor. The Corporate Debtor argued that there was no operational debt as defined under the Code, emphasizing the need for specific authorization for initiating the Corporate Insolvency Resolution Process.

Authorization Issue:
The Corporate Debtor challenged the petition filed by the Power of Attorney Holder, highlighting the necessity of specific authorization for initiating insolvency proceedings. Citing a previous NCLAT decision, the Corporate Debtor argued that a Power of Attorney Holder is not competent to file such applications without explicit authorization.

Lack of Evidence Issue:
The Tribunal observed a lack of evidence to prove debt acknowledgment and payment by the Corporate Debtor. The Operational Creditor failed to provide documentary evidence of providing services, debt acknowledgment, or receipt of invoices by the Corporate Debtor. Additionally, the absence of an affidavit under section 9(3)(b) of the Code further weakened the case.

The Tribunal, after thorough analysis, concluded that the petition lacked merit due to insufficient evidence of debt acknowledgment, payment, and authorization for filing. The Operational Creditor failed to establish the due and payable nature of the debt, leading to the rejection of the petition under section 9 of the Insolvency and Bankruptcy Code, 2016.

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