2017 (4) TMI 1350 - Tri - Insolvency and Bankruptcy

Corporate insolvency process - occurrence of default - Held that - This Bench is satisfied that the corporate debtor failed to discharge the liability mentioned in this Company Petition filed by the operational creditor under section 9 of Insolvency and Bankruptcy Code, 2016 resulting occurrence of default for an amount of ₹ 1,18,34,618.66/-. Hence, this Bench admits this Petition under section 9 of Insolvency and Bankruptcy Code, 2016 declaring moratorium for the purposes referred to in section 14 of the code.

Summary

Issues:
1. Default in repayment by the Corporate Debtor.
2. Petition under Section 9 of the Insolvency and Bankruptcy Code, 2016.
3. Appointment of Interim Resolution Professional.
4. Declaration of moratorium on the Corporate Debtor.
5. Direction for public announcement of initiation of corporate insolvency process.

Analysis:

1. The Petitioner, an operational creditor, filed a petition stating that the Corporate Debtor had defaulted in repaying a sum of ?1,18,34,618.66. The petition was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking admission of the petition, declaring a moratorium on the Corporate Debtor, and appointment of an Interim Resolution Professional.

2. The Petitioner, a cooperative society facilitating the procurement of natural rubber, had supplied rubber to the Corporate Debtor, a company engaged in manufacturing rubber tires and tubes. The value of the service provided was ?1,18,34,618.66. The Petitioner issued a statutory notice demanding payment, which was acknowledged by the Corporate Debtor.

3. The Petitioner submitted evidence of the outstanding amount through bank statements and an affidavit stating that the Corporate Debtor had not disputed the debt amount. The Petitioner also nominated an Interim Resolution Professional who expressed willingness for the appointment and confirmed no pending disciplinary proceedings.

4. The Corporate Debtor neither replied to the notice nor appeared before the Bench. The Bench found that the Corporate Debtor failed to discharge the liability, leading to a default of ?1,18,34,618.66. Consequently, the Bench admitted the Petition under Section 9 of the Code, declaring a moratorium with specific directions.

5. The Bench issued directions prohibiting legal actions against the Corporate Debtor, ensuring continuity of essential supplies, and appointing the nominated Interim Resolution Professional. The moratorium was effective from a specified date until the completion of the insolvency resolution process or liquidation approval.

In conclusion, the Tribunal admitted the Petition, declared a moratorium, and appointed an Interim Resolution Professional, emphasizing the importance of following the provisions of the Insolvency and Bankruptcy Code, 2016 for resolving the default in repayment by the Corporate Debtor.