Appellate Tribunal Upholds Rs. 1 Crore Debt, Dismisses Appeal

The Appellate Tribunal found that an operational debt exceeding Rs. 1 Crore existed between the Corporate Debtor and Respondent No. 1, with the Corporate Debtor acknowledging the debt through payments and admitting financial distress. Despite allegations of overpayment and fraudulent invoices, no convincing evidence was presented. Additionally, the Tribunal determined that there was no pre-existing dispute between the parties, as the Corporate Debtor's claims were unsubstantiated. The appeal was dismissed, the stay on the Committee of Creditors was lifted, and the Corporate Debtor was directed to proceed in accordance with the law, with entitlement to claim back a deposited amount from the Ministry of Corporate Affairs.

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Issues Involved:

1. Whether the operational debt over Rs. 1 Crore existed between the Corporate Debtor and the Respondent No. 1.
2. Whether any pre-existing dispute existed between the parties.

Summary:

Existence of Operational Debt:
The Appellate Tribunal examined whether an operational debt over Rs. 1 Crore existed between the Corporate Debtor and Respondent No. 1. The Corporate Debtor admitted to receiving materials worth Crores of Rupees from Respondent No. 1 and making payments in a "Running Account Manner." The Corporate Debtor also acknowledged financial distress and delays in payments. Despite claims of overpayment and fraudulent invoices, the Tribunal found no convincing evidence to support these allegations. The Tribunal noted that the Corporate Debtor had made voluntary settlement payments during the petition hearing, which indicated an acknowledgment of the debt.

Pre-existing Dispute:
The Tribunal assessed whether there was a pre-existing dispute between the parties. It was noted that there was no written contract for the supply of materials, and orders were placed through verbal communication or telephonic conversation. The Corporate Debtor did not raise any dispute before the demand notices were issued. The Tribunal found no evidence of a pre-existing dispute, as the Corporate Debtor's claims of fraudulent invoices were not substantiated. The Tribunal also considered the GST records and the Corporate Debtor's claim of Input Tax Credit (ITC) on the disputed invoices, which indicated acknowledgment of the debt.

Conclusion:
The Tribunal concluded that there was no error in the Impugned Order dated 21.02.2022. The appeal was dismissed, and the stay on the constitution of the Committee of Creditors (CoC) was removed. The Interim Resolution Professional (IRP) was directed to proceed immediately in accordance with the law. The Corporate Debtor was entitled to claim back the deposited amount of Rs. 1,06,31,219/- from the Pay and Accounts Officer, Ministry of Corporate Affairs, New Delhi, after following due process.

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