Tribunal confirms Corporate Debtor's liability to pay debts. Appeal dismissed, no costs awarded.

The tribunal upheld the Adjudicating Authority's order, confirming the Corporate Debtor's liability to pay the debts. The appeal was dismissed for lack of merit, and no costs were awarded.

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Issues Involved:
1. Existence of debt due and payable.
2. Liability of the Corporate Debtor to pay the debts.

Issue-wise Detailed Analysis:

Issue No. (I): Existence of Debt Due and Payable

The definitions of 'creditor', 'debt', and 'default' under the Insolvency & Bankruptcy Code, 2016 (I & B Code, 2016) are crucial. Section 3(11) defines 'debt' as a liability or obligation in respect of a claim due from any person, including financial and operational debt. Section 3(6) defines 'claim' as a right to payment or remedy for breach of contract. The definitions of 'Financial Creditor' and 'Financial Debt' under Sections 5(7) and 5(8) respectively, and 'Operational Debt' and 'Operational Creditor' under Sections 5(20) and 5(21) are also pertinent.

The Hon'ble Supreme Court in Mobilox Innovations Private Limited Vs. Kirusa Software Pvt. Ltd. (2018) and M/s Innoventive Industries Vs. ICICI Bank & Ors. (MANU/SC/1603/2017) provided guidance on determining the existence of operational debt and disputes. The tribunal observed that the Corporate Debtor (2nd Respondent) acknowledged the supply of 16,130 modems and installation of 2,945 modems, which were integrated with TANGEDCO's servers. The Corporate Debtor admitted to partial payments, confirming the existence of unpaid dues.

The tribunal found no evidence of pre-existing disputes between the parties. The arbitration proceedings cited by the Corporate Debtor were between the Corporate Debtor and TANGEDCO, not the Operational Creditor (1st Respondent). The tribunal concluded that the Adjudicating Authority correctly identified the existence of debt and the absence of pre-existing disputes.

Issue No. (II): Liability of the Corporate Debtor to Pay the Debts

The Appellant's claim that the debt was assigned to TANGEDCO was found erroneous. The issuance of an NOC by the Corporate Debtor did not establish a valid contract obligating TANGEDCO to make payments. The tribunal noted that the Corporate Debtor did not seek TANGEDCO's prior approval for payment arrangements. Consequently, the liability to pay the Operational Creditor reverted to the Corporate Debtor. The tribunal affirmed that the claims against the Corporate Debtor were valid.

Conclusion:

The tribunal upheld the Adjudicating Authority's order dated 16.09.2022, dismissing the appeal and confirming the Corporate Debtor's liability to pay the debts. The appeal was found devoid of merit and dismissed without costs. The connected pending Interlocutory Applications were also closed.

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