2021 (3) TMI 584

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....with interest @ 18 % p.a. The brief facts of the case are as under: - 2. The Operational Creditor is a dealer of steel and alloys manufactured by various companies. During the course of business, the Operational Creditor supplied various steel items to the Corporate Debtor for a total amount of Rs. 45,37,944/- on different dates between 13.08.2019 and 17.09.2019. Subsequently, the goods were delivered to the Corporate Debtor and they issued post-dated cheques towards payment of the amounts covered by each invoice at the time of taking delivery of goods. Thereafter, the Corporate Debtor paid a total amount of Rs. 12,97,350/-. As on 17.11.2019 an amount of Rs. 32,40,594/- is due from the Corporate Debtor. 3. As no payments were received from the Corporate Debtor towards the dues, applicant issued a Demand Notice dated 29.01.2020 under Section 8 of the Insolvency and Bankruptcy Code, 2016 (under Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016). 4. The Corporate Debtor has neither given a reply stating that there exists a dispute which is pre-existing and bonafide nor repaid the entire debt, therefore the Operational Creditor has filed th....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....on and the fact that those case are still pending, would not in any way make the present Application filed by the Applicant under the I& B Code not maintainable. The Applicant stated that in International Asset Reconstruction Company Pvt. Ltd. V. Paramount Mills Private Limited [ Company appeal (AT) No. 777 of 2018] it was clarified that pendency of Civil Suit cannot be a ground to reject an application filed under I&B Code, 2016. Further in Shah Brothers Ispat Pvt. Ltd. V. P. Mohanraj &Ors [Company Appeal (AT) No. 306 of 2018] a complaint under Section 138 of NI Act 1881 filed even after moratorium was declared under Section 14 of the I& B Code is maintainable and the same can be prosecuted parallel with the proceedings initiated under the I&B Code,2016. 12. The Applicant further stated that it is clear from the documents annexed with the Application that huge amount is due from the Corporate Debtor. Therefore, it is highly necessary in the facts and circumstances of the case to initiate Corporate Insolvency Resolution Process against the Corporate Debtor. FINDINGS 13. I have heard the arguments advanced by the Learned Counsel for the Applicant and the Respondent and had gone t....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....17, the Hon'ble Supreme Court held that the 'existence of the dispute' and/or the suit or arbitration proceeding must be pre-existing - i.e. it must exist before the receipt of the demand notice or invoice, as the case may be and observed: "24. The scheme under Sections 8 and 9 of the Code, appears to be that an operational creditor, as defined, may, on the occurrence of a default (i.e., on non-payment of a debt, any part whereof has become due and payable and has not been repaid), deliver a demand notice of such unpaid operational debt or deliver the copy of an invoice demanding payment of such amount to the corporate debtor in the form set out in Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 read with Form 3 or 4, as the case may be (Section 8(1)). Within a period of 10 days of the receipt of such demand notice or copy of invoice, the corporate debtor must bring to the notice of the operational creditor the existence of a dispute and/or the record of the pendency of a suit or arbitration proceeding filed before the receipt of such notice or invoice in relation to such dispute (Section 8(2)(a)). What is important is that the existenc....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....itions are not lacking in the present Application to reject the same. The apparent philosophy underlying the IBC is that Companies which are not able to function on commercial basis must be liquidated. In other words, Corporate Darwinism ensure survival of the fittest. 21. Since all the aforesaid conditions are fulfilled in the instant case, this Tribunal is of the opinion that the application submitted by Operational Creditor is complete in all respects. 22. The Operational Creditor filed IA(IBC)/17/2021 and suggested the name of Mr. P.D Vincent, having Registration No. IBBI/IPA-002/IP-N00521/2017-2018/11638, having office at 65/2364A, Ponoth Road, Kaloor, Kochi-682017, for appointment as Interim Resolution Professional (IRP) if an order admitting the present application is passed. Shri. Vincent has filed a declaration in Form 2 affirming that he is a Registered Insolvency Professional and no disciplinary proceedings are pending against him. ORDER 23. For the aforesaid discussions, the Application on behalf of Operational Creditor filed under Section 9 of the I&B Code 2016 for initiation of Corporate Insolvency Resolution Process is admitted against the Corporate Debtor, M/s. ....