2022 (8) TMI 652 - Tri - Insolvency and Bankruptcy

Tribunal Admits Company Petition for CIRP against Kelvolt (India) Pvt Ltd. Moratorium Imposed

MR. NARENDRA SAKARIYA Versus KELVOLT (INDIA) PRIVATE LIMITED

The Tribunal admitted the Company Petition and ordered the initiation of Corporate Insolvency Resolution Process (CIRP) against M/s. Kelvolt (India) ... 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:- Since, the Corporate Debtor was not present on that date, the matter was adjourned from 14.07.2022 to 27.07.2022 with a specific direction that the Corporate Debtor shall appear and address their arguments on 27.07.2022 failing which the argument of the Corporate Debtor would be treated as heard and appropriate order will be passed. Accordingly, the matter was taken up on board on 27.07.2022. However, the Corporate Debtor neither appeared nor addressed any arguments as directed by this Bench. Hence, having no other alternative, this Bench reserved the matter for orders. Time Limitation - HELD THAT:- The payment of Rs. 1 lac on 18.08.2016 made by the Corporate Debtor is clearly reflecting in the statement of account. Since, there is a payment made by the Corporate Debtor on 18.08.2016 the period of limitation would get extended for another three years from 18.08.2019 and the above Company Petition being filed on 29.05.2019 is well within limitation and the contention of the Corporate Debtor on that score is liable to be rejected. Payment of interest - HELD THAT:- It is relevant to mention here that there is a stipulation in the invoices raised by the Operational Creditor for payment of interest @ 24% per annum if the payment was not made on due date by the Corporate Debtor. Therefore, the contention with regard to the entitlement of the Operational Creditor for interest is also liable to be rejected. Pre-existing dispute or not - HELD THAT:- It is observed that the Corporate Debtor did not issue any reply to the Demand Notice nor filed any documents evidencing pre-existing disputes between both parties prior to the Demand Notice and therefore, the plea of pre-existing disputes mentioned by the Corporate Debtor in their reply is only for name sake and is only an afterthought to prevent the admission of the Company Petition. This Bench is of the considered view that there is no substance in any of pleas raised by the Corporate Debtor and the above Company Petition deserves to be admitted - Petition admitted - moratorium declared. Issues Involved:1. Initiation of Corporate Insolvency Resolution Process (CIRP)2. Claim of Operational Debt and Interest3. Limitation Period4. Pre-existing DisputeIssue-wise Detailed Analysis:1. Initiation of Corporate Insolvency Resolution Process (CIRP):The Operational Creditor, Mr. Narendra Sakariya Limited, filed a petition seeking to initiate CIRP against the Corporate Debtor, M/s. Kelvolt (India) Private Limited, under Section 9 of the Insolvency and Bankruptcy Code, 2016, for an operational debt of Rs. 15,03,161/-. The Tribunal, after considering the submissions and evidence, admitted the petition and ordered the initiation of CIRP against the Corporate Debtor.2. Claim of Operational Debt and Interest:The Operational Creditor supplied steel products to the Corporate Debtor, who failed to make payments for the invoices amounting to Rs. 7,01,815/-. Additionally, the Operational Creditor claimed interest of Rs. 8,01,346/- at 24% per annum as per the terms of the invoices. The Tribunal noted that the invoices included a stipulation for interest on delayed payments, thus rejecting the Corporate Debtor's contention that no interest was payable.3. Limitation Period:The Corporate Debtor argued that the petition was barred by limitation as the debt fell due on 09/05/2014, and the petition was filed on 29/05/2019. However, the Tribunal found that a payment of Rs. 1 lakh was made by the Corporate Debtor on 18/08/2016, which extended the limitation period by another three years. Therefore, the petition filed on 29/05/2019 was within the limitation period.4. Pre-existing Dispute:The Corporate Debtor claimed pre-existing disputes regarding the quality of materials supplied and the absence of interest provisions in the supply contract. However, the Tribunal observed that the Corporate Debtor did not issue any reply to the Demand Notice nor provided evidence of disputes prior to the notice. The Tribunal concluded that the plea of pre-existing disputes was an afterthought and lacked substance.Judgment:The Tribunal admitted the Company Petition and ordered the initiation of CIRP against M/s. Kelvolt (India) Private Limited. An Interim Resolution Professional (IRP) was appointed, and the Operational Creditor was directed to deposit Rs. 3 Lakhs towards initial CIRP costs. The Tribunal also imposed a moratorium prohibiting suits, proceedings, and actions against the Corporate Debtor's assets, and mandated the continuation of essential goods or services during the moratorium period. The management of the Corporate Debtor was vested in the IRP/RP, and the Registry was directed to update the Corporate Debtor's Master Data and communicate the order to all parties involved.