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

The Tribunal admitted the Company Petition and ordered the initiation of Corporate Insolvency Resolution Process (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 imposed a moratorium, prohibited suits against the Corporate Debtor's assets, and mandated the continuation of essential goods or services. Management was vested in the IRP/RP, and the Registry was directed to update the Corporate Debtor's Master Data and notify all relevant parties.

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Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP)
2. Claim of Operational Debt and Interest
3. Limitation Period
4. Pre-existing Dispute

Issue-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.

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