Tribunal admits petition for Corporate Insolvency Resolution Process under IBC. Debt established, moratorium declared.

The Tribunal admitted the petition filed by the Operational Creditor to initiate the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. The Tribunal found the debt and default to be established, dismissed the claims of pre-existing disputes, and appointed an IRP. A moratorium was declared as per Section 14 of the IBC.

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Issues Involved:
1. Jurisdiction of the Tribunal.
2. Existence of Debt and Default.
3. Pre-existing Dispute.
4. Admission of Debt by Corporate Debtor.
5. Maintainability of the Petition.
6. Appointment of Interim Resolution Professional (IRP).
7. Moratorium under Section 14 of IBC.

Issue-wise Analysis:

1. Jurisdiction of the Tribunal:
The Tribunal established its jurisdiction based on the registered office of the Corporate Debtor being located in Mumbai. The Operational Creditor argued that the Tribunal has territorial jurisdiction over insolvency resolution and liquidation of corporate persons, irrespective of any agreement between the parties, as supported by precedents from the Hon'ble NCLAT.

2. Existence of Debt and Default:
The Operational Creditor supplied goods to the Corporate Debtor and raised invoices from 01.02.2020 to 29.02.2020, which remained unpaid. The total claimed default was Rs.2,20,42,190/-. The Corporate Debtor acknowledged an outstanding amount of Rs.2,07,11,209/- in a letter to Citi Commercial Bank dated 23.07.2021. The Tribunal found that the debt amount exceeded Rs.1,00,00,000/- and default was established.

3. Pre-existing Dispute:
The Corporate Debtor claimed a pre-existing dispute regarding the quality of materials supplied, citing letters dated 24.06.2020, 20.07.2020, 23.07.2020, 18.08.2020, and 17.09.2020. However, the Tribunal found these disputes to be raised as an afterthought, noting that the Corporate Debtor continued placing orders and making payments without raising quality issues. The Tribunal referred to the Supreme Court's ruling in Mobilox Innovations Pvt. Ltd. vs. Kirusa Software Pvt. Ltd., which held that disputes must be genuine and not spurious or illusory.

4. Admission of Debt by Corporate Debtor:
The Tribunal observed that the Corporate Debtor's letter to Citi Commercial Bank on 23.07.2021 acknowledged the outstanding invoices and promised to clear them. Additionally, an email dated 13.05.2021 from the Corporate Debtor confirmed the outstanding amount and agreed to make extra payments towards old outstanding dues. These admissions were considered clear evidence of debt and default.

5. Maintainability of the Petition:
The Corporate Debtor argued that the petition was not maintainable due to jurisdictional issues and pre-existing disputes. The Tribunal dismissed these contentions, finding the petition maintainable as it was filed within the limitation period of three years from the acknowledgment of debt on 23.07.2021.

6. Appointment of Interim Resolution Professional (IRP):
The Tribunal appointed Mr. Rakesh Kumar Tulsyan as the Interim Resolution Professional (IRP) to carry out functions as per the IBC. The Operational Creditor was directed to deposit Rs.5,00,000/- with the IRP for expenses related to issuing public notices and inviting claims.

7. Moratorium under Section 14 of IBC:
The Tribunal ordered a moratorium under Section 14 of the IBC, which included:
- Suspension of suits or proceedings against the Corporate Debtor.
- Prohibition on transferring or disposing of the Corporate Debtor's assets.
- Suspension of actions to foreclose or enforce security interests.
- Continuation of essential goods or services to the Corporate Debtor.

The moratorium was to remain in effect until the completion of the CIRP or approval of a resolution plan or liquidation order.

Conclusion:
The Tribunal admitted the petition filed by the Operational Creditor to initiate the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. The Tribunal found the debt and default to be established, dismissed the claims of pre-existing disputes, and appointed an IRP. A moratorium was declared as per Section 14 of the IBC.

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