Tribunal Admits Company Petition for CIRP Against Corporate Debtor | Debt Default Dispute

The Tribunal admitted the Company Petition for the initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor due to default in payment to the Operational Creditor. The Corporate Debtor's inconsistent statements and delaying tactics were noted, with the Tribunal dismissing claims of pre-existing disputes. The Operational Creditor successfully proved the debt and default, leading to the appointment of an Interim Resolution Professional to manage the CIRP effectively.

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Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016 based on default in payment by the Corporate Debtor to the Operational Creditor.

Detailed Analysis:

Operational Creditor's Submissions:
- The Operational Creditor, engaged in trading of Plastic Raw Materials, filed a Company Petition seeking CIRP against the Corporate Debtor for default in payment.
- The Corporate Debtor failed to make payment of the principal sum along with interest, leading to the filing of the petition invoking relevant provisions of the Code.
- The Operational Creditor provided evidence of invoices, E-way Bills, and Lorry Receipts, stating that the Corporate Debtor failed to pay within the due dates, with bounced cheques.
- Continuous efforts were made by the Operational Creditor to recover the outstanding amount, including demand notices, telephonic conversations, and emails.
- The Operational Creditor submitted a Demand Notice under section 8 of the Code, which was duly delivered, and no reply or dispute was raised by the Corporate Debtor.
- Ledger accounts and data were submitted to the Information Utility to corroborate the claimed amount.

Corporate Debtor's Submissions:
- The Corporate Debtor appeared at hearings but did not reply to the Demand Notice or file an Affidavit initially.
- Claimed a pre-existing dispute regarding quality of materials supplied by the Operational Creditor and alleged non-receipt of goods for the invoices submitted.
- Made a part payment, reducing the claimed amount, and argued that each purchase order created a separate cause of action.
- Stated difficulties in receiving the Demand Notice due to the pandemic and operational challenges.
- Filed an application to dismiss the Petition and sought a refund, attempting to delay proceedings.

Findings and Decision:
- The Tribunal noted the Corporate Debtor's inconsistent statements, including attempts to settle but subsequently delaying proceedings.
- The Corporate Debtor's claims of pre-existing disputes were dismissed as no response was provided to the Demand Notice within the statutory period.
- The Tribunal found the Corporate Debtor's actions to be delaying tactics, evidenced by contradictory statements and attempts to dismiss the Petition after making a part payment.
- The Operational Creditor successfully demonstrated the debt and default, leading to the admission of the Company Petition and initiation of CIRP against the Corporate Debtor.
- An Interim Resolution Professional was appointed, and necessary directions were issued to manage the CIRP process effectively.

This detailed analysis highlights the key arguments, submissions, findings, and the final decision of the Tribunal regarding the initiation of CIRP against the Corporate Debtor based on the default in payment to the Operational Creditor, as per the provisions of the Insolvency and Bankruptcy Code, 2016.

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