Adjudicating Authority admits Section 9 application, initiates CIRP against Corporate Debtor. Appeal dismissed.

The Adjudicating Authority admitted the Section 9 application filed by the Operational Creditor and initiated the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. The Corporate Debtor's appeal was dismissed as there was an outstanding operational debt exceeding the threshold limit, no pre-existing dispute, and proper service of Demand Notices. The Adjudicating Authority found that the Corporate Debtor had defaulted in the payment of the operational debt, and the application under Section 9 of the Insolvency and Bankruptcy Code (IBC) was correctly admitted.

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Issues Involved:
1. Whether the application under Section 9 of the Insolvency and Bankruptcy Code (IBC) was maintainable.
2. Whether there was an outstanding operational debt exceeding the threshold limit due from the Corporate Debtor.
3. Whether there was a pre-existing dispute regarding the operational debt.
4. Whether the Demand Notices were properly served to the Corporate Debtor.

Issue-wise
Detailed Analysis:

1. Maintainability of the Application under Section 9 of IBC:
The Corporate Debtor argued that there were no dues or unpaid amounts remaining to be paid, thus contesting the maintainability of the Section 9 application. The Appellant claimed that the total claim made by the Operational Creditor was inflated by including invoices from a previous work order that had already been settled. However, the Adjudicating Authority found that the application was maintainable as the Operational Creditor had provided evidence of an outstanding operational debt exceeding the threshold limit.

2. Outstanding Operational Debt:
The Operational Creditor provided two Work Orders dated 17.10.2015 and 01.10.2016. The first Work Order was settled, but the second Work Order had unpaid invoices. The Operational Creditor issued two Demand Notices, claiming unpaid operational debts of Rs. 19.95 lakhs and Rs. 11.53 lakhs, respectively, along with interest. Despite the Corporate Debtor's contention that all dues were cleared, the Adjudicating Authority found that there was an outstanding operational debt exceeding Rs. 1 lakh at the time of filing the Section 9 petition. The Corporate Debtor had admitted to an outstanding amount of Rs. 33.74 lakhs on 10.04.2018, which was later reduced to Rs. 19.95 lakhs after subsequent payments.

3. Pre-existing Dispute:
The Corporate Debtor claimed that the cranes supplied by the Operational Creditor were defective and outdated. However, the Adjudicating Authority found no evidence of any communication regarding defective cranes from the Corporate Debtor. The Operational Creditor had provided fitness certificates for the cranes, and there was no record of any dispute raised by the Corporate Debtor before the issuance of the Demand Notices. Therefore, the Adjudicating Authority concluded that there was no pre-existing dispute.

4. Service of Demand Notices:
The Corporate Debtor denied receiving the Demand Notices. However, the Operational Creditor provided evidence of postal receipts and tracking information to establish the delivery of the Demand Notices. The Adjudicating Authority found this evidence credible and rejected the Corporate Debtor's contention of non-receipt of the Demand Notices.

Conclusion:
The Adjudicating Authority admitted the Section 9 application filed by the Operational Creditor and initiated the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. The Corporate Debtor's appeal was dismissed as the Adjudicating Authority found that there was an outstanding operational debt exceeding the threshold limit, no pre-existing dispute, and proper service of Demand Notices. The Corporate Debtor had defaulted in the payment of the operational debt, and the application under Section 9 of IBC was correctly admitted.

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