The court held that claims of operational debt must be substantiated with credible evidence of delivery, which was not demonstrated, leading to rejection of the CIRP application.

ORDER

[PER: SANJIV DUTT, MEMBER (TECHNICAL)]

1. BACKGROUND

1.1 This Application, bearing C.P.(IB) No.148/MB/2022, was filed by Rohit Plastopack Private Limited, the Operational Creditor/Applicant, on 21.12.2021 under Section 9 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as "the Code") read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (hereinafter referred to as "the AAA Rules") through its Director, Mr. Prince Shah, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Dentsu Communications India Private Limited, the Corporate Debtor.

1.2 The Corporate Debtor, while running a social campaign called 'NEED TO FEED' under Pradhan Mantri Garib Kalyan Anna Yojna (PMGKAY), placed orders with the Operational Creditor for agricultural products, which were sourced from Suumaya Agro Limited. Several invoices were raised for orders dated 08.06.2021 and 15.06.2021, but despite confirming the quality and quantity of the goods, the Corporate Debtor failed to make the payment.

1.3 A Demand Notice dated 22.10.2021 was issued under Section 8 of the Code, demanding the alleged principal amount of operational debt of Rs.5,19,76,264/- along with interest at 18% per annum amounting to Rs.22,31,739/-, totalling Rs.5,42,08,003/- (Five Crore Forty-Two Lakh Eight Thousand and Three Rupees). However, the Corporate Debtor neither made the payment within 10 days of receipt of the Demand Notice nor furnished any reply. Consequently, the Operational Creditor has approached this Tribunal, seeking initiation of CIRP in respect of the Corporate Debtor.

2. AVERMENTS OF OPERATIONAL CREDITOR

2.1 The Corporate Debtor, under the 'NEED TO FEED' program and Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY), required agricultural goods on a 45-day credit basis, calculated from the date of confirmation of quality and quantity. These agricultural goods/dry rations were to be distributed among school children and poor people as part of its Corporate Social Responsibility Corporate Social Responsibility (CSR) activities. The Corporate Debtor placed an order on 08.06.2021 and Suumaya Agro Limited delivered the goods on behalf of the Operational Creditor. The Corporate Debtor confirmed the receipt on 10.06.2021, after which the Operational Creditor made the payment to Suumaya Agro Ltd.

2.2 A second order was placed on 15.06.2021, delivered by Suumaya Agro Ltd., and confirmed by the Corporate Debtor on 21.06.2021. The payment for the first order was due on 25.07.2021 for all the invoices dated 08.06.2021 and for the second order on 05.08.2021, for all the invoices dated 15.06.2021. However, the Corporate Debtor failed to make payments for these invoices on the due dates.

2.3 Despite multiple follow-ups and assurances from the Corporate Debtor, on 08.10.2021, the Corporate Debtor unexpectedly denied the claim vide email without any specific reason. Subsequently, the Operational Creditor issued a Demand Notice under Section 8 of the Code in Form 3 on 22.10.2021, claiming the principal amount along with interest @18% per annum. The Corporate Debtor neither replied to the Demand Notice nor paid the outstanding dues of Rs.5,42,08,003/-, leading to the filing of the present Application. Hence, the Operational Creditor prays that CIRP may be initiated in respect of the Corporate Debtor.

3. CONTENTIONS OF CORPORATE DEBTOR

3.1 The Corporate Debtor, in its Affidavit-in-Reply dated 06.04.2022 has denied the allegations made by the Operational Creditor and raised a number of objections.

3.2 The Corporate Debtor is, inter alia, engaged in creative services, media buying, planning strategy and communication consultancy. In 2017, it launched a CSR advisory programme through its division 'InDeed' to assist clients in implementing CSR initiat