Operational Creditor Granted Relief Under Insolvency Code

The court admitted the application under Section 9 of the Insolvency and Bankruptcy Code, 2016, finding the operational creditor had satisfied all procedural requirements. It established the existence of operational debt and default by the corporate debtor, upheld the validity and enforceability of the settlement agreement, dismissed allegations of pre-existing disputes as fraudulent, and allowed the operational creditor to file the petition despite withdrawal of a previous petition. The court declared a moratorium, appointed an Interim Resolution Professional, and directed the operational creditor to deposit a specified amount. The case is listed for a progress report on January 12, 2022.

---

---

Issues Involved:

1. Admissibility of the petition under Section 9 of the Insolvency and Bankruptcy Code, 2016.
2. Existence of operational debt and default by the corporate debtor.
3. Validity and enforceability of the settlement agreement dated October 11, 2018.
4. Allegations of pre-existing disputes and fraudulent intent by the corporate debtor.
5. Legal implications of withdrawing the previous petition without leave to refile.

Issue-wise Detailed Analysis:

1. Admissibility of the Petition under Section 9 of the Insolvency and Bankruptcy Code, 2016:

The petition was filed by the operational creditor seeking initiation of the corporate insolvency resolution process against the corporate debtor. The operational creditor claimed an outstanding amount of Rs. 15,47,40,891 along with interest at 24% per annum from October 12, 2018 to November 14, 2019, totaling Rs. 19,53,38,118. The court found that the operational creditor had satisfied all the procedural requirements under Section 9 of the IBC, 2016, including the submission of relevant documents and the proposal of an Interim Resolution Professional (IRP).

2. Existence of Operational Debt and Default by the Corporate Debtor:

The operational creditor submitted that between August 9, 2012, to March 6, 2017, it raised 1017 invoices for supplies made to the corporate debtor, who made part payments but failed to pay the balance amount of Rs. 25,34,86,791. After adjustments, the due amount was Rs. 25,31,61,711 as of March 6, 2017. The corporate debtor admitted liability in its reply and undertook to pay Rs. 20,47,40,891 within 180 days but only paid Rs. 5 crores. The court found the operational debt and default by the corporate debtor to be established.

3. Validity and Enforceability of the Settlement Agreement Dated October 11, 2018:

The settlement agreement was signed between the parties, where the corporate debtor agreed to pay Rs. 15,47,40,891 in installments, failing which the operational creditor could initiate fresh proceedings under the IBC, 2016. The corporate debtor failed to make any payment as per the settlement agreement. The court held that the settlement agreement was valid and enforceable, and the operational creditor had the right to file the petition due to the default by the corporate debtor.

4. Allegations of Pre-existing Disputes and Fraudulent Intent by the Corporate Debtor:

The corporate debtor claimed that the settlement agreement was erroneous and invalid, and that a pre-existing dispute existed due to a title suit filed in the City Civil Court at Kolkata. The court found that the suit was filed with fraudulent and malicious intent to avoid payment and was not a genuine pre-existing dispute. The operational creditor's claim was based on the default of the settlement agreement, which the court found to be an admitted operational debt.

5. Legal Implications of Withdrawing the Previous Petition Without Leave to Refile:

The corporate debtor argued that the previous petition was withdrawn without leave to refile, thus barring the operational creditor from filing a fresh petition. The court noted that the withdrawal was not "withdrawal simplicitor" but was based on a joint request pursuant to the settlement agreement. The court held that the operational creditor had the right to file the present petition due to the corporate debtor's failure to comply with the settlement agreement.

Orders:

(i) The application under Section 9 of the IBC, 2016, is admitted.
(ii) A moratorium and public announcement are declared in accordance with Sections 13 and 15 of the IBC, 2016.
(iii) The moratorium prohibits the institution or continuation of suits, transferring or disposing of assets, and recovery of property by owners or lessors.
(iv) Essential goods or services to the corporate debtor shall not be terminated during the moratorium.
(v) Mr. Santosh Choraria is appointed as the Interim Resolution Professional (IRP).
(vi) The operational creditor is directed to deposit Rs. 1,00,000 with the IRP within three days.
(vii) The registry is directed to communicate the order to all concerned parties.

The matter is listed for filing a progress report on January 12, 2022.

---