Tribunal admits CIRP application, declares moratorium, and appoints IRP for corporate debtor

The Tribunal found that there was an operational debt due from the Corporate Debtor to the Operational Creditor, and the Corporate Debtor defaulted on the payment. The plea of pre-existing disputes was not substantiated, and the petition was deemed maintainable. The Tribunal had jurisdiction over the matter, and the claim was within the limitation period. The application for initiating CIRP was admitted, and a moratorium was declared, with Mr. Sagar Jain appointed as the IRP to oversee the process.

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Issues Involved:
1. Existence of Operational Debt and Default
2. Pre-existing Dispute
3. Maintainability of the Petition
4. Jurisdiction of the Tribunal
5. Limitation Period
6. Appointment of Interim Resolution Professional (IRP)
7. Moratorium and CIRP Process

Detailed Analysis:

1. Existence of Operational Debt and Default:
The Operational Creditor supplied metal sheets and water tank structures to the Corporate Debtor, resulting in an operational debt of Rs. 69,94,228/-, with additional interest bringing the total to Rs. 88,99,158/-. The invoices became due upon issuance, and a demand notice was sent on 15 July 2019, which was not accepted by the Corporate Debtor. The demand notice was subsequently sent via email on 17 August 2019, to which the Corporate Debtor did not respond. The Tribunal found that there was indeed an operational debt due from the Corporate Debtor to the Operational Creditor, and the Corporate Debtor defaulted on the payment.

2. Pre-existing Dispute:
The Corporate Debtor claimed that there was an understanding that payments would be made after receiving funds from the Government of Bihar. However, the Tribunal noted that the Corporate Debtor failed to provide any documentary evidence to support this claim, and mere verbal assertions were deemed untenable. The Corporate Debtor's plea of pre-existing disputes was not substantiated with any specific details or evidence, making the plea not maintainable.

3. Maintainability of the Petition:
The Corporate Debtor argued that the petition was not maintainable due to the alleged agreement regarding payment terms. However, the Tribunal found that the petition was complete and maintainable as the Operational Creditor had provided all necessary documents evidencing the supply of goods and the non-payment by the Corporate Debtor.

4. Jurisdiction of the Tribunal:
The Corporate Debtor contended that the disputes required a full-fledged trial before a civil court. However, the Tribunal held that it had the jurisdiction to decide the matter, considering the debtor-creditor relationship and the evidence provided by the Operational Creditor.

5. Limitation Period:
The Corporate Debtor claimed that the petition was barred by limitation. The Tribunal noted that the date of default was 04 December 2018, and the petition was filed within the limitation period, making the claim of the Corporate Debtor invalid.

6. Appointment of Interim Resolution Professional (IRP):
The Tribunal appointed Mr. Sagar Jain as the Interim Resolution Professional (IRP) to carry out the functions as per the Code. The Operational Creditor was directed to deposit Rs. 3,00,000/- with the IRP to meet the expenses arising out of issuing public notice and inviting claims.

7. Moratorium and CIRP Process:
The Tribunal admitted the application for initiating the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. A moratorium under section 14 of the Insolvency and Bankruptcy Code (IBC) was declared, effective from the date of the order until the completion of the CIRP or approval of the resolution plan. Public announcement of the CIRP was ordered to be made immediately, and the IRP was instructed to submit periodical reports regarding the progress of the CIRP.

Conclusion:
The Tribunal found that there was an operational debt due from the Corporate Debtor to the Operational Creditor, and the Corporate Debtor defaulted on the payment. The plea of pre-existing disputes was not substantiated, and the petition was deemed maintainable. The Tribunal had jurisdiction over the matter, and the claim was within the limitation period. The application for initiating CIRP was admitted, and a moratorium was declared, with Mr. Sagar Jain appointed as the IRP to oversee the process.

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