2018 (7) TMI 2236 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT - On careful perusal of the documents it is noticed that the Invoice raised by the Operational Creditor has never been acknowledged by the Debtor - there is nothing on record which can prove that the Operational Creditor was enraged by the Debtor for providing Legal services except the averment made by the Operational Creditor. The Operational Creditor has not produced any Vakalatnama/Memo of Appearance by which the Operational Creditor has appeared before Court of Law on behalf of Debtor. Though it is accepted position that the Operational Creditor was engaged by the Debtor for his Legal services it is crystal clear that for the services provided from Aug. 2005 to Jan. 2011 the Operational Creditor has duly received the fixed Professional Fees by the Debtor. And further for the period of 2012-2014 he has received the amount of Rs.3.60, 000/- after deduction of Rs.40, 000 as TDS as full and final payment for his Services - the Debt claimed in this Petition/Application does not in existence and in our conscientious view this Petition/Application does not survive in the eyes of Law and deserves Rejection. The Operational Creditor has failed to prove that the amount of Debt as claimed ts in existence as defined U/s. 3 (11) of the Code and therefore as the claimed amount is not in existence this Petition/Application is to be Rejected - petition dismissed.

Summary

Issues:
Claim of operational debt under Section 9 of the Insolvency and Bankruptcy Code, 2016.

Detailed Analysis:

Issue 1: Claim of operational debt under Section 9 of the Code
The petitioner, an operational creditor, filed an application invoking Section 9 of the Insolvency and Bankruptcy Code, 2016, claiming an operational debt against the respondent, a debtor. The operational creditor alleged non-payment of a bill amounting to Rs. 2.76,54,650, which included a principal amount of Rs. 1,58,00,000 and interest at the rate of 24% p.a. The debtor, on the other hand, contested the claim, stating that the debt did not exist as alleged by the operational creditor.

Analysis: The tribunal examined the submissions made by both parties. The operational creditor stated that legal services were provided to the debtor from 2011 onwards, and invoices were raised for the services rendered. The debtor, however, argued that the operational creditor had been paid in full and final settlement for the services provided until 2014. The tribunal noted discrepancies in the evidence presented by both parties. While the operational creditor claimed non-payment, the debtor produced evidence of payment made in 2014, which was acknowledged by the operational creditor. The tribunal found that the operational creditor failed to substantiate the existence of the debt as claimed under Section 3(11) of the Code. Consequently, the tribunal dismissed the petition, ruling that the claimed amount was not proven to be owed by the debtor, and hence, the application was rejected.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the tribunal's decision based on the evidence presented by both parties.