My creditor has initiated IBC insolvency proceedings against my company in Dibrugarh; 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 various defences to contest the application. The corporate debtor's position is crucial in determining the outcome of these proceedings.

Here are some potential defences you may consider raising:

• Dispute on the Debt: You can argue that there is an existing dispute regarding the debt, which could render the application inadmissible under Section 9(5)(ii)(d) of the IBC. This requires you to demonstrate that there is a genuine dispute concerning the amount claimed.
• Operational Creditor's Status: If the creditor is not an operational creditor as defined under Section 5(20) of the IBC, you can challenge the application. Ensure that the creditor meets the criteria for being classified as an operational creditor.
• Default Not Established: Challenge the assertion of default by presenting evidence that payment was made, or that the default was remedied within the statutory period.
• Time-Barred Debt: If the debt in question is time-barred under the Limitation Act, 1963, you can raise this as a defence, as the creditor may not have the legal standing to claim the debt.
• Pre-existing Settlement: If there was a prior agreement regarding the settlement of the debt, demonstrate this to argue that the creditor cannot initiate insolvency proceedings.
• Insolvency Application Procedure: You can argue that the creditor did not follow proper procedure as laid out in the IBC, potentially violating Sections 7-9 depending on the type of application.

The corporate debtor's position during these proceedings can involve:

• Filing a Reply: You are required to file a detailed reply to the application filed by the creditor, addressing each point raised and providing your defences.
• Engaging a Resolution Professional: Once the application is admitted, a resolution professional may be appointed, and you must cooperate with them as they take over management of the company.
• Negotiations for Settlement: You may seek to negotiate a settlement or restructuring plan with creditors, even while proceedings are ongoing.

In conclusion, raising effective defences is critical in IBC proceedings, and understanding your position as a corporate debtor will help in navigating the legal landscape effectively.