2022 (2) TMI 740 - Tri - Insolvency and Bankruptcy

Tribunal admits CIRP application, appoints IRP, imposes moratorium under IBC 2016. Operational Creditor prevails.

The Tribunal admitted the application for Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, appointed an Interim Resolution ... Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - time limitation - HELD THAT:- It is seen that Operational Creditor has issued notice under section 8 of the Code on 27.2.2019 and the said notice has been duly replied by Corporate Debtor on 7.3.2019, and the present Application has been filed on 14.8.2019. In its reply dated 7.3.2019 the Corporate Debtor has only raised issues with regard to certain payments not being accounted for by Operational Creditor and nothing is shown/claimed as being prior existing dispute between the parties. It is seen from copy of ledger account annexed with Section 8 notice that parties are having running account in respect of various invoices raised by Operational Creditor for the logistics/freight services provided by it to the Corporate Debtor during the period from 1.4.2014 to 18.2.2019. The last invoice as recorded in the said ledger account is no. SLPL/15-16/3317 dated 4.1.2016 for ₹ 1,18,315/- and the last payment received from Corporate Debtor is on 19.10.2016 of ₹ 94,064. Operational Creditor has made out case against Corporate Debtor for initiation of CIRP under the Code due to non-payment of Operational Debt of ₹ 6,66,667.40. The present application has been filed on 14.8.2019 with the last payment admittedly having been made by Corporate Debtor on 19.10.2016 on running account basis, the same is held to be within limitation u/s. 137 of the Limitation Act. Therefore, this Authority admits the present Application under section 9 (5) of the I & B Code, 2016. Application admitted - moratorium declared. Issues Involved:1. Initiation of Corporate Insolvency Resolution Process (CIRP)2. Existence of operational debt and default3. Pre-existing dispute4. Limitation period for filing the application5. Appointment of Interim Resolution Professional (IRP)6. Moratorium under Section 14 of IBC, 2016Issue-wise Detailed Analysis:1. Initiation of Corporate Insolvency Resolution Process (CIRP):The Operational Creditor, M/s. Satkar Logistics Private Limited, filed an application under Section 9 of the Insolvency & Bankruptcy Code, 2016 (IBC, 2016) seeking to initiate CIRP against the Corporate Debtor, M/s. Ambassador Logistics Private Limited, for an outstanding operational debt of Rs. 6,66,667 along with interest at 24% per annum from 19.10.2016 till realization.2. Existence of Operational Debt and Default:The Operational Creditor provided logistics services to the Corporate Debtor, raising various invoices. Despite part payments made by the Corporate Debtor, an outstanding amount of Rs. 6,66,667 remained due. The Operational Creditor issued a notice under Section 8 of IBC, 2016 on 27.02.2019, which was replied to by the Corporate Debtor on 07.03.2019. The Tribunal found that the Operational Creditor established the debt and default as the invoices were duly accounted for in the Corporate Debtor's ledger.3. Pre-existing Dispute:The Corporate Debtor contended that there were pre-existing disputes, citing issues such as delayed invoices, unaccounted payments, and discrepancies in account statements. However, the Tribunal noted that these issues were raised only after the Section 8 notice was issued and were related to payment reconciliation rather than genuine disputes. Hence, no pre-existing dispute was established within the ambit of Section 5(6) of IBC, 2016.4. Limitation Period for Filing the Application:The Corporate Debtor argued that the petition was barred by limitation, relying on the Supreme Court judgment in B.K. Education Services Private Limited v. Parag Gupta and Associates. However, the Tribunal referred to the Supreme Court's decision in Dena Bank (now Bank of Baroda) versus C. Shivakumar Reddy and Anr., which held that an application is not barred by limitation if there is an admission of debt by the Corporate Debtor. The Tribunal found that the application was filed within three years of the last payment made on 19.10.2016, thus within the limitation period under Section 137 of the Limitation Act.5. Appointment of Interim Resolution Professional (IRP):Since the Operational Creditor did not propose an IRP, the Tribunal appointed Ms. Gunjan Mittal as the IRP, subject to no pending disciplinary proceedings and compliance with necessary regulations. The Operational Creditor was directed to deposit Rs. 2 lacs with the IRP for expenses, adjustable by the Committee of Creditors.6. Moratorium under Section 14 of IBC, 2016:Upon admitting the application, the Tribunal declared a moratorium as per Section 14(1) of IBC, 2016, prohibiting:a. Institution or continuation of suits or proceedings against the Corporate Debtor.b. Transfer, encumbrance, or disposal of the Corporate Debtor's assets.c. Actions to foreclose or enforce security interests.d. Recovery of property by owners or lessors.The Tribunal directed communication of the order to the Operational Creditor, Corporate Debtor, IRP, and the Insolvency and Bankruptcy Board of India (IBBI), and instructed the Registrar of Companies (ROC) to update the Master Data and report compliance.Conclusion:The Tribunal admitted the application for CIRP against the Corporate Debtor, appointed an IRP, and declared a moratorium, ensuring compliance with the procedural requirements of IBC, 2016.