2022 (5) TMI 205 - Tri - Insolvency and Bankruptcy

Tribunal initiates Corporate Insolvency Resolution Process against Respondent for debt default

The tribunal admitted the application and initiated Corporate Insolvency Resolution Process (CIRP) against the Respondent for operational debt and ... Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- This Adjudicating Authority is of the view that there is an operational debt which is due from the Corporate Debtor and the Corporate Debtor has defaulted in making payment of the amount due and accepted the said default. The Corporate Debtor had, before accepting the default, contended that there exists a pre existing dispute as the terms and conditions in the agreement were one-sided, unfair and unjust towards the Respondent. However, the Corporate Debtor had himself signed the contract in the year 2014, which was subsequently extended and amended in the subsequent years. The Corporate Debtor never raised any dispute w.r.t. the terms of the contract before the filing of this petition. Therefore, in the absence of any preexistence of dispute, this tribunal admits this application and initiates CIRP on the Corporate Debtor with immediate effect. Application admitted - moratorium declared. Issues Involved:1. Initiation of Corporate Insolvency Resolution Process (CIRP)2. Existence of Operational Debt and Default3. Pre-existing Dispute4. Appointment of Interim Resolution Professional (IRP)5. Imposition of MoratoriumDetailed Analysis:1. Initiation of Corporate Insolvency Resolution Process (CIRP):The Applicant, M/s. VS & B Domestic Container Solutions Pvt. Ltd., sought to initiate CIRP under Section 9 of the Insolvency and Bankruptcy Code 2016 against the Respondent, M/s. Maple Logistics Pvt. Ltd., for an alleged default in clearing a debt of Rs. 50,06,662, including interest at 36% per annum. The Respondent had returned some containers during the pendency of the petition, leading to a revised outstanding amount of Rs. 22,73,239.32 and revised interest of Rs. 3,70,538.2. Existence of Operational Debt and Default:The Petitioner Company, engaged in renting and leasing containers, entered into a Rental Lease Agreement with the Respondent on January 1, 2014. The Petitioner raised numerous invoices, out of which 15 were outstanding, totaling Rs. 44,20,936.39, with interest amounting to Rs. 5,85,688.11. The last payment was received on April 5, 2019, and the total debt outstanding as of September 19, 2019, was Rs. 50,06,662.45. Despite consistent reminders, the Respondent failed to make the payment.3. Pre-existing Dispute:The Respondent argued that the petition was barred due to an existing dispute, citing deficiency in services and unfair terms in the agreement. They referenced Supreme Court judgments in similar contexts and claimed arbitrary DRV charges. The Respondent also contended that the Applicant refused to accept container returns at convenient locations, leading to delays. However, the Operational Creditor rebutted these claims, stating no prior disputes were raised before the petition, and the Respondent had admitted liability in emails.4. Appointment of Interim Resolution Professional (IRP):The tribunal confirmed the appointment of Mr. Vinod Radhakrshnan Nair as the IRP, as proposed by the Applicant, with no disciplinary proceedings pending against him. He is to take steps as required under Sections 15, 17, and 18 of the Code and file a report within 30 days.5. Imposition of Moratorium:A moratorium under Section 14 of the Code was imposed, including:(a) Suspension of suits or proceedings against the Respondent.(b) Prohibition on transferring or disposing of assets.(c) Suspension of actions to enforce security interests.(d) Protection of essential goods or services supply during the moratorium.The moratorium will last until the completion of the CIRP or until an order for liquidation is passed.Conclusion:The tribunal admitted the application and initiated CIRP against the Corporate Debtor, finding an operational debt and default. The Respondent's claims of pre-existing disputes were dismissed due to lack of prior evidence. The IRP was appointed, and a moratorium was imposed to facilitate the resolution process. The order is to be communicated to relevant parties and updated in the Registrar of Companies records.