2018 (4) TMI 1568 - Tri - Insolvency and Bankruptcy

Initiation of Corporate Insolvency Resolution Process (CIRP) - Held that - Upon perusal of reply of the Corporate Debtor letter dated 19/9/2017, it s noted that Corporate Debtor itself stated that he had purchased material worth Crores of Rupees during the period of April 2010 to March 2013, but in the same letter Corporate Debtor has denied as not received any such material from Operational Creditor. Upon perusal of the documents, materials submitted by Operational Creditor, we are satisfied that Corporate Debtor has failed to make payment towards supply of material/goods made by Operational Creditor, application has been filed in the prescribed Form (application form also contains relevant information) proposed an IRP and the application is complete in all respects and debt and default is established, therefore, it s a fit case to admit U/s 9 of I & B Code 2016, to declare moratorium and to appoint IRP as proposed. In view of the reasons mentioned above, we hereby admit this case by declaring moratorium u/s 14 of the Code

Summary

Issues:
Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of I & B Code 2016 for non-payment by the Corporate Debtor to the Operational Creditor.

Analysis:
The Operational Creditor, Heritage Marble Pvt. Ltd, filed a Company Petition seeking to start the Corporate Insolvency Resolution Process against GStaad Hotels Pvt. Ltd for failing to make a total payment of a specified amount, consisting of principal and interest. The Operational Creditor issued a demand notice in accordance with the rules, supported by detailed invoices and outstanding amounts.

The Corporate Debtor denied the claim, citing various reasons such as alleged failure to supply required material, invoices not related to them, lack of supporting evidence, and questioning the Operational Creditor's legal standing. However, the Operational Creditor provided substantial evidence, including statements of accounts, bank transactions, reminder letters, demand notices, and other relevant documents to support their claim.

The Operational Creditor also proposed an Interim Resolution Professional and submitted comprehensive documentation, including tax invoices, cargo details, and board resolutions. Upon reviewing the evidence, the Tribunal found that the Corporate Debtor had indeed failed to make the required payments for the supplied goods, establishing the debt and default. Consequently, the Tribunal deemed it appropriate to admit the case under Section 9 of the I & B Code 2016, declare a moratorium, and appoint the proposed Interim Resolution Professional.

In light of the findings, the Tribunal issued directions to enforce the moratorium, prohibiting legal actions against the Corporate Debtor, asset transfers, and recovery of properties. Essential supplies to the Corporate Debtor were to continue uninterrupted during the moratorium. The order of moratorium was effective immediately and would remain in place until the completion of the Corporate Insolvency Resolution Process or until further orders were issued. The public announcement of the insolvency resolution process was also mandated.

Conclusively, the Company Petition was admitted, and the necessary directions were issued to ensure the smooth progression of the insolvency resolution process.