2022 (6) TMI 824 - Tri - Insolvency and Bankruptcy

Tribunal Admits Application for Corporate Insolvency Resolution Process

The Tribunal admitted the application under Section 9 of the Insolvency and Bankruptcy Code, initiating Corporate Insolvency Resolution Process against ... Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- From perusal of the record it is noticeable that the only rebuttal raised by the Corporate Debtor is pertaining to the amount due and payable. The Operational Creditor states that the outstanding due is of Rs.25,77,322/- (inclusive of interest calculated @ 18% p.a. till 06 December, 2018) whereas, the Corporate Debtor in its reply (at page 71) has categorically admitted that the outstanding due is of Rs.6,09,299/- This acceptance by the Corporate Debtor ticks the check box of debt and default. Further this instant application was filed on 02 April, 2019, hence, it falls within the threshold limit applicable then under the Code. As envisaged under section 9(3)(b) of the Code, an affidavit has been filed by the Operational Creditor and also, from the available record, it is evident that the Corporate Debtor had neither raised any dispute with respect to the services of the Operational Creditor. It is also pertinent to mention that no interest component has been mentioned in the invoices. Application admitted - moratorium declared. Issues:1. Application under section 9 of the Insolvency and Bankruptcy Code, 2016 for Corporate Insolvency Resolution Process (CIRP).2. Dispute over outstanding dues between Operational Creditor and Corporate Debtor.3. Examination of submissions by both parties regarding the invoices and payments made.4. Lack of representation by the Corporate Debtor during the proceedings.5. Decision on the admission of the application and appointment of Interim Resolution Professional (IRP).1. Application under Section 9 of the Insolvency and Bankruptcy Code:The judgment pertains to a Company Petition filed under section 9 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process against the Corporate Debtor. The Operational Creditor claimed an amount of Rs.25,77,322/-, including interest, as default by the Corporate Debtor.2. Dispute over Outstanding Dues:The Operational Creditor alleged that the Corporate Debtor failed to clear invoices for the supply of Rice Brans, despite reminders and assurances. The Corporate Debtor, in response, contended that the amount due was significantly lower than claimed by the Operational Creditor, citing discrepancies in invoicing and payments made.3. Examination of Submissions:Detailed submissions were made by both parties regarding the transactions, agreements, and payments related to the supply of Rice Brans. The Corporate Debtor raised issues regarding the pricing of materials, quality disputes, and alleged overpayments to the Operational Creditor, leading to a disagreement over the actual outstanding amount.4. Lack of Representation by Corporate Debtor:Throughout the proceedings, the Corporate Debtor failed to appear, except through a reply affidavit filed by its advocate. Despite the lack of representation at multiple hearings, the Corporate Debtor's contentions and responses were considered in the judgment.5. Decision on Application and Appointment of IRP:After considering the arguments and evidence presented, the Tribunal admitted the application for initiating CIRP against the Corporate Debtor. A moratorium under section 14 of the IBC was imposed, and an Interim Resolution Professional (IRP) was appointed to oversee the resolution process. Various directions were issued regarding the management of the Corporate Debtor, submission of reports, and deposit of funds by the Operational Creditor.This comprehensive analysis of the judgment highlights the key issues, arguments presented by both parties, the decision reached by the Tribunal, and the subsequent directions issued for the resolution process.