My creditor has initiated IBC insolvency proceedings against my company in Bokaro; what defences can I raise and what is the corporate debtor's position?

Detailed Legal Analysis

If a creditor has initiated insolvency proceedings against your company under the Insolvency and Bankruptcy Code, 2016 (IBC), you can raise several defenses to contest the proceedings. The corporate debtor's position is vital in determining the merits of these defenses.

Here are some common defenses that can be raised:

• Dispute over Debt: You can argue that the debt is not due or payable. If there is a pre-existing dispute regarding the debt, you may present evidence of this dispute to negate the creditor's application. According to Section 8(2)(a) of the IBC, if there is a genuine dispute, the application may be rejected.
• Time Barred Debt: If the debt in question is older than three years and is not enforceable, you can argue that it is time-barred under the Limitation Act, 1963. This is a strong defense if applicable.
• Insolvency Proceedings are Not Admissible: You can assert that the creditor does not meet the minimum threshold for initiating insolvency proceedings. As per Section 4 of the IBC, the minimum default amount must be ₹1 lakh for individuals and ₹1 crore for companies.
• Improper Procedure: If the creditor has not complied with the procedural requirements set forth in the IBC, including serving the requisite notice under Section 8, you can challenge the application based on this ground.
• Corporate Debtor's Financial Position: You may also present a case that your company is not insolvent and can pay its debts. Evidence of ongoing business activities and cash flow can support this argument.
• Settlement Offers: If you have made an offer to settle the debt or are in negotiations with the creditor, you can use this as a defense, indicating that the matter is being addressed outside the court.

It's crucial to prepare a robust defense and gather supporting documentation for any claims made. You may also consider seeking the assistance of a legal professional experienced in insolvency law to navigate the complexities of the IBC. Remember, timely filing of your response is essential to protect your interests, as per Section 12 of the IBC, which mandates the completion of the corporate insolvency resolution process within a specific time frame.