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2020 (2) TMI 1415 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt an dispute or not - HELD THAT - It manifests that the corporate debtor has tried to create and establish a pre- existing dispute by asserting that the liability had been transferred to the C.P/ No. IB-1071/ND/2019 M/s. Gupta Ji Electric Company Vs. M/s Straight Edge Contracts Pvt. Ltd. third party who the corporate debtor averred as Principal Employer but the corporate debtor has failed to establish that the applicant had accepted or was in any manner involved in the said understanding between the parties. The corporate debtor has not placed on record any document which exhibits the plausible dispute between the parties. It can be thus inferred that there is no merit in the so-called dispute raised by the corporate debtor in reply to this application. This leaves no doubt that the default has occurred with respect to the payment of the operational debt of the applicant. Thus mere reply filed by the corporate debtor to the present application is unable to establish any pre-existing dispute of genuine nature and the said is merely a moonshine dispute as laid down in MOBILOX INNOVATIONS PRIVATE LIMITED VERSUS KIRUSA SOFTWARE PRIVATE LIMITED 2017 (9) TMI 1270 - SUPREME COURT . Application admitted - moratorium declared.
Issues:
1. Application filed under section 9 of Insolvency and Bankruptcy Code, 2016 for Corporate Insolvency Resolution Process (CIRP). 2. Dispute over outstanding payment of materials supplied to the Corporate Debtor. 3. Allegation of default in payment by the Corporate Debtor. 4. Response of Corporate Debtor claiming assignment of debt to Principal Employer. 5. Jurisdiction of the Tribunal to entertain the application. 6. Appointment of Interim Resolution Professional and deposit of funds. Analysis: 1. The Applicant, a partnership firm, filed an application under section 9 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, a private limited company. The Applicant alleged non-payment of an outstanding amount of &8377; 1,46,49,934/- along with interest, for electrical materials supplied to the Corporate Debtor between Dec 2017 to June 2018. 2. The Applicant claimed that despite supplying materials worth &8377; 3,15,42,453/-, the Corporate Debtor only paid &8377; 1,68,92,519/-, leaving a significant outstanding balance. The Corporate Debtor allegedly failed to make full payments as per the purchase orders, leading to a cessation of further supplies by the Applicant. 3. The Corporate Debtor, in response, contended that the debt had been assigned to a Principal Employer, and the Applicant had orally consented to this arrangement. However, the Tribunal found that the Corporate Debtor failed to provide evidence of the Applicant's involvement or acceptance of this assignment, leading to a lack of merit in the dispute raised by the Corporate Debtor. 4. The Tribunal noted that the Corporate Debtor's attempt to create a pre-existing dispute regarding the debt assignment was unsubstantiated. The Applicant denied being a party to agreements cited by the Corporate Debtor and refuted claims of delayed deliveries or mediator roles, emphasizing the non-payment issue. 5. Jurisdiction of the Tribunal was established based on the location of the Corporate Debtor's registered office in Delhi. The Tribunal found the application timely filed within the limitation period and admitted it for further proceedings under the Insolvency and Bankruptcy Code. 6. Consequently, the Tribunal appointed an Interim Resolution Professional and directed the Applicant to deposit funds to meet expenses related to the insolvency resolution process. The admission of the application triggered a moratorium period under the Code, prohibiting certain actions against the Corporate Debtor during this period. This detailed analysis of the judgment highlights the issues, contentions of the parties, Tribunal's findings, and the consequential orders issued in the case.
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