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

Detailed Legal Analysis

If your creditor has initiated insolvency proceedings against your company under the Insolvency and Bankruptcy Code, 2016 (IBC), there are several defenses you can raise to contest the proceedings.

As a corporate debtor, your position is to assert defenses that challenge the creditor's claims or the grounds upon which the insolvency application has been made. Here are some potential defenses you may consider:

• Dispute on the Existence of Debt: You can argue that the debt claimed by the creditor does not exist or is disputed. According to Section 8 of the IBC, if a notice of default is received, the corporate debtor can raise a dispute within 10 days.
• Operational Creditor's Failure to Comply with Pre-Conditions: For operational creditors, if the creditor has not complied with the provisions of Section 8 (such as failing to send a demand notice), you can challenge the admission of the application.
• Debt is Not Due or Payable: Assert that the debt is not due, either because it has been settled, or there are counterclaims against the creditor that negate the debt.
• Time Barred Debt: If the debt is beyond the limitation period as prescribed under the Limitation Act, 1963, you can argue that the claim is not maintainable.
• Insolvency Application is Malafide: You may argue that the application is filed with malafide intentions, perhaps to harm your business interests, which could be a basis for dismissal.
• Resolution Plan in Progress: If you have a resolution plan in progress or are in negotiations with creditors, you may use this as a defense to show you are working towards settling your debts.

In the context of corporate insolvency, the corporate debtor is afforded certain rights and protections under the IBC, including:

• Right to Respond: You have the right to respond to any insolvency application and present your case before the National Company Law Tribunal (NCLT).
• Stay on Proceedings: If you file an application under Section 10 of the IBC, it may lead to a stay of the insolvency proceedings while your own application is being heard.
• Participation in the Resolution Process: If insolvency is initiated, you have the right to participate in the resolution process and propose a resolution plan.

It is essential to consult with a legal professional who specializes in corporate law to evaluate your specific situation and craft a robust defense strategy.