Operational Creditor's Insolvency Application Dismissed

The Tribunal dismissed the operational creditor's application to initiate corporate insolvency resolution against the corporate debtor, as it found that the consignments in question were cleared by a third party, not the debtor. The Tribunal concluded that there was no outstanding amount owed by the debtor to the creditor, leading to the dismissal of the insolvency application without costs.

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Issues:
Application under section 9 of the Insolvency and Bankruptcy Code, 2016 for initiating corporate insolvency resolution process against the corporate debtor.

Analysis:
The operational creditor filed an application seeking to initiate the corporate insolvency resolution process against the corporate debtor, citing non-payment of invoices totaling to Rs. 7,49,672. The operational creditor provided logistics services to the corporate debtor, who failed to clear the invoices within the stipulated 30-day period. A demand notice was issued, followed by a reply from the corporate debtor raising disputes. The operational creditor contended that the corporate debtor defaulted in repaying the debt, leading to the insolvency application.

The respondent, corporate debtor, argued that the consignments were cleared by a new consignee, M/s. Mahe Convention and Events Centre, Kannur, not by the corporate debtor. The corporate debtor claimed that the project was halted due to regulatory issues, and the balance confirmation letter admitting the claim was signed by an unauthorized person. The corporate debtor alleged that the operational creditor failed to reconcile the internal documents and filed the application without legal entitlement to the claimed amounts.

Upon reviewing the submissions, the Tribunal found that the consignments were cleared by the new consignee, M/s. Mahe Convention and Events Centre, Kannur, not by the corporate debtor. The Tribunal noted that the operational creditor did not dispute the fact that the consignment was cleared by the third party. Therefore, the Tribunal concluded that there was no due amount owed by the corporate debtor to the operational creditor. Consequently, the Tribunal dismissed the application filed by the operational creditor in I. B. A. No. 914 of 2019, without imposing any costs.

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