2018 (5) TMI 1760 - Tri - Insolvency and Bankruptcy

Corporate Insolvency Resolution Process - outstanding Operational Debt - Held that - It is hereby pronounced that the Moratorium as prescribed under section 14 of the Code 2016 shall come into operation. As a result, Institution of any suit or parallel Proceedings before any Court of law are prohibited. The assets of the Debtor must not be liquidated until the Insolvency Process is completed. However, the supply of essential goods or services to the Corporate Debtor shall not be suspended or interrupted during Moratorium Period . This direction shall have effect from the date of this Order till the completion of Insolvency Resolution process.

Summary

Issues involved:
Initiation of Corporate Insolvency Resolution Process for outstanding operational debt under Section 9 of the Insolvency & Bankruptcy Code, 2016.

Analysis:
1. Facts and Claim Details: The petition was filed by the Operational Creditor against the Corporate Debtor for an outstanding operational debt of ?26,66,302. The Operational Creditor provided services for clearing import shipments, and despite issuing several reminders and emails, a significant amount remained unpaid. The Corporate Debtor acknowledged the debt but failed to make the payment.

2. Communication and Notices: The Operational Creditor sent demand notices and legal notices to the Corporate Debtor, followed by a bank statement showing non-receipt of the debt amount. The Corporate Debtor did not respond to any of the notices or attend the hearings, indicating a lack of dispute regarding the outstanding debt.

3. Findings and Decision: After considering the facts and evidence presented, the Tribunal found that the outstanding operational debt was established, and the default by the Corporate Debtor was confirmed. The petition was deemed admissible, and the appointment of an Interim Resolution Professional (IRP) was approved.

4. Resolution Process: The IRP appointed was required to initiate the insolvency resolution process, including making public announcements and performing duties as per the Insolvency and Bankruptcy Code. A moratorium was declared to prohibit legal proceedings against the Corporate Debtor and to ensure the completion of the insolvency resolution process without liquidation of assets.

5. Conclusion: The Tribunal admitted the petition, confirmed the appointment of the IRP, and initiated the Corporate Insolvency Resolution Process. The moratorium was imposed to protect the assets of the Corporate Debtor and facilitate the resolution process while ensuring the supply of essential goods and services continued uninterrupted.