Operational Creditor's Petition Dismissed for Lack of Quantified Debt & Default Proof

The Adjudicating Authority dismissed the Company Petition CP/862/2018 under section 9 of the Insolvency and Bankruptcy Code, 2016, as the Operational Creditor failed to quantify the alleged debt of &8377; 18,73,732.83 conclusively and establish the date of default. The Corporate Debtor's contentions regarding payment delays and negotiations for proper pricing due to the perishable nature of goods were considered, leading to the rejection of the petition. The judgment underscores the necessity of clear documentation and precise quantification of claims in insolvency proceedings for establishing liability effectively.

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Issues:
- Application under section 9 of the Insolvency and Bankruptcy Code, 2016 for initiation of Corporate Insolvency Resolution Process.
- Dispute regarding payment of operational debt between Operational Creditor and Corporate Debtor.
- Claims and counterclaims related to the supply of perishable goods and payment delays.
- Lack of quantification of debt and default by the Operational Creditor.

Analysis:
The judgment involves an application filed under section 9 of the Insolvency and Bankruptcy Code, 2016 for initiating the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor due to default in payment of operational debt. The Operational Creditor alleged that the Corporate Debtor defaulted in payment of &8377; 18,73,732.83 for the supply of Mango pulp. The Operational Creditor claimed to have made payments as per a full and final settlement, but the Corporate Debtor allegedly quoted excessive rates for cans with pulp, leading to a demand for return of the equivalent amount. Despite a demand notice and no response from the Corporate Debtor, the outstanding debt remained uncleared.

The Corporate Debtor contended that the Operational Creditor failed to procure goods as per the terms, resulting in stored perishable goods. They claimed negotiations for a proper price due to the goods' perishable nature and alleged that the Operational Creditor demanded the return of cans/cartons instead of paying for the goods received. The Corporate Debtor highlighted outstanding invoices and financial strain due to delayed payments by the Operational Creditor, denying claims of supplying old materials causing payment delays.

Upon examining the submissions and documents, the Adjudicating Authority noted the perishable nature of the goods involved, emphasizing the potential for significant losses due to delays. The Authority observed reconciliations and discussions between the parties but found a lack of clarity on the handling of unused materials and adjustments towards payment. The respondent raised a counterclaim of &8377; 9,82,710, which the Operational Creditor failed to address satisfactorily in the rejoinder. Consequently, the Authority dismissed the Company Petition CP/862/2018 due to the Operational Creditor's failure to quantify the alleged debt and establish the date of default conclusively. The judgment highlights the importance of clear documentation and quantification of claims in insolvency proceedings to establish liability effectively.

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