2018 (2) TMI 1726 - Tri - Insolvency and Bankruptcy

Corporate insolvency process - complied with the mandatory requirements of Section 9(3)(b) and 9(3)(c) of the Code - Held that - Referring to the affidavit of petitioner which states that the petitioner did not receive any notice of dispute from the corporate debtor nor the outstanding amount has been paid. The petitioner has also filed copy of statements of account of the petitioner in which the amount of debt is being normally credited. The petitioner has also filed certificate from Axis Bank (Annexure P12), the financial institution where the petitioner is maintaining the account that no credit of the amount has been given in the account of the petitioner on behalf of the respondent-corporate debtor for the period 01.01.2018 to 16.02.2018. This aspect otherwise is not disputed by the respondent-corporate debtor. We find that all the compliances have been made and the application is complete and the petition deserves to be admitted. In view of the above, the instant petition is admitted declaring moratorium for prohibiting all accordingly.

Summary

Issues involved:
1. Compliance with Section 8 of the Insolvency and Bankruptcy Code, 2016.
2. Filing of petition under Section 9 of the Code for initiating corporate insolvency resolution process.
3. Examination of the debt owed by the respondent-corporate debtor.
4. Admissibility of the petition and declaration of moratorium.

Issue 1: Compliance with Section 8 of the Insolvency and Bankruptcy Code, 2016:
The respondent-corporate debtor did not file any objection or reply to the earlier petition under Section 9 due to technical defects in the demand notice issued under Section 8. However, in the current petition, the operational creditor served a demand notice in accordance with Section 8, including sending the notice to the corporate debtor and its directors, along with all related invoices and the judgment and decree of the High Court. The notice was delivered by hand, registered post, and electronic mail. The petitioner also submitted supporting documents, such as an affidavit and statements of account, to prove the debt owed by the respondent.

Issue 2: Filing of petition under Section 9 of the Code for initiating corporate insolvency resolution process:
The petitioner, an operational creditor, filed a petition under Section 9 for initiating the corporate insolvency resolution process against the respondent-corporate debtor. The petitioner, being the sole proprietor of a company, had a significant outstanding amount due from the respondent for the supply of paddy to the respondent's rice mill. Despite a legal notice, the respondent failed to pay the outstanding amount, leading to the petitioner filing a suit in the High Court of Delhi, which was decreed in favor of the petitioner. The petitioner complied with the mandatory requirements of Section 9(3)(b) and 9(3)(c) by not receiving any notice of dispute or payment from the respondent.

Issue 3: Examination of the debt owed by the respondent-corporate debtor:
The respondent-corporate debtor, incorporated under the Companies Act, 1956, had a substantial outstanding debt to the operational creditor for supply transactions. The High Court of Delhi decreed the suit in favor of the petitioner, and the respondent did not appeal the judgment. The petitioner fulfilled all requirements, including serving a demand notice, providing necessary documents, and submitting an affidavit supporting the debt claim. The compliance with Section 9(5) of the Code was confirmed, and the application was found to be complete, leading to the admission of the petition and the declaration of a moratorium.

Issue 4: Admissibility of the petition and declaration of moratorium:
The Adjudicating Authority admitted the petition under Section 9 of the Code, declaring a moratorium to prohibit various actions against the corporate debtor, including suits, transfer of assets, enforcement of security interests, and recovery of property. Essential goods or services supplied to the corporate debtor were not to be terminated during the moratorium period. The order of moratorium was to be in effect until the completion of the corporate insolvency resolution process or until a resolution plan was approved or liquidation was ordered. The matter was scheduled for further directions and the formal appointment of an Interim Insolvency Resolution Professional.

This detailed analysis of the judgment highlights the key legal aspects and proceedings involved in the case before the National Company Law Tribunal, Chandigarh.