Tribunal initiates Corporate Insolvency Resolution Process under Section 9

The tribunal admitted the application under Section 9 of the Insolvency and Bankruptcy Code, initiating the Corporate Insolvency Resolution Process (CIRP) and declaring a moratorium. Mr. Vinod Kumar Chaurasia was appointed as the Interim Resolution Professional (IRP), and the Operational Creditor was directed to deposit Rs. Two Lakh with the IRP to cover expenses. The tribunal's decision was communicated to the relevant parties and authorities for compliance and record-keeping.

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Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016.
2. Pre-existing dispute regarding invoices and log books.
3. Breach of contract by the applicant.
4. Admissibility of evidence and compliance with procedural requirements.

Issue-wise Detailed Analysis:

1. Initiation of Corporate Insolvency Resolution Process (CIRP):
M/s. Reach International (Applicant/Operational Creditor) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s. Altech Infrastructure Private Limited (Corporate Debtor). The application was filed due to non-payment of dues for industrial machines leased out by the applicant to the corporate debtor. The tribunal noted that the application was complete and met the requirements under the IBC, thus initiating the CIRP and declaring a moratorium in terms of Section 14 of the Code.

2. Pre-existing Dispute Regarding Invoices and Log Books:
The Corporate Debtor contended that there were pre-existing disputes regarding discrepancies in the log books and invoices, including overwriting and inflated work hours. However, the tribunal found that the Corporate Debtor failed to provide any substantive evidence of such disputes prior to the issuance of the demand notice. The tribunal referred to the Supreme Court's decision in 'Mobilox Innovations Private Limited Vs. Kirusa Software Private Limited', emphasizing that a dispute must be genuine and supported by evidence. The tribunal concluded that the Corporate Debtor's claims were unsupported and constituted a "moonshine dispute."

3. Breach of Contract by the Applicant:
The Corporate Debtor argued that the applicant breached the contract by not adhering to the agreed terms, such as providing log books and monthly reports, and raising invoices for non-operational periods. The tribunal noted that the Corporate Debtor acknowledged the invoices in an email dated 12.11.2018 and issued a cheque for part payment, which was dishonored. This acknowledgment and the dishonored cheque were seen as admissions of liability, undermining the Corporate Debtor's claims of breach of contract.

4. Admissibility of Evidence and Compliance with Procedural Requirements:
The Corporate Debtor raised objections regarding the admissibility of evidence and procedural compliance, including the completeness of the application, the authorization of the person filing the application, and the validity of the affidavit under Section 65B of the Evidence Act. The tribunal found that the application was filed in the prescribed form and was complete. The tribunal also noted that the Corporate Debtor's repeated attempts to settle the matter indicated an admission of unpaid operational debt.

Conclusion:
The tribunal admitted the application under Section 9 of the IBC, initiating the CIRP and declaring a moratorium. Mr. Vinod Kumar Chaurasia was appointed as the Interim Resolution Professional (IRP). The Operational Creditor was directed to deposit Rs. Two Lakh with the IRP to cover expenses. The tribunal's decision was communicated to the relevant parties and authorities for compliance and record-keeping.

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