2019 (5) TMI 1657 - Tri - Insolvency and Bankruptcy

Admissibility of petition - Initiation of Corporate Insolvency Resolution Process - respondent company is unable to liquidate debts - HELD THAT - On being served with the notice of the present proceedings, the Corporate Debtor failed to put in appearance and was therefore proceeded ex parte. Keeping in view that the averments made by the Operational Creditor stand undemolished and, in the absence of any pre-existing dispute, the prayer of the Operational Creditor merits consideration. Accordingly, the petition is Admitted. The Operational Creditor has not proposed the name of any IRP. Accordingly, we appoint Mr. Vivek Raheja, Registration No. IBBI/IPA- 001 /IP-P00055/2017-18/10133, email [email protected], Mobile No. 9811065170 duly empanelled with the IBBI as the IRP. He is directed to take such steps as are mandated under the Code, more specifically under Sections 15, 17,18,20 and 21 and file his report. To come up on 2nd July, 2019 for further consideration.

Summary

Issues:
Initiation of Corporate Insolvency Resolution Process based on operational debts.

Analysis:
The judgment deals with a petition filed by an Operational Creditor seeking the initiation of Corporate Insolvency Resolution Process against a respondent company due to its failure to liquidate debts. The Operational Creditor had supplied goods on credit basis to the Corporate Debtor, who failed to make full payments as per two specific invoices. Despite issuing a demand notice under Section 8 of the Insolvency & Bankruptcy Code, the Corporate Debtor did not respond. The petition was filed in compliance with the relevant provisions of the Code.

Upon being served notice, the Corporate Debtor did not appear, leading to proceedings ex parte. The Tribunal found the claims of the Operational Creditor to be valid and undisputed, with no pre-existing dispute. Consequently, the petition was admitted, and a moratorium under Section 14 of the Code was imposed immediately. This moratorium included restrictions on legal actions against the Corporate Debtor, transfer of assets, enforcement of security interests, and recovery of property. Essential supplies to the Corporate Debtor were to continue uninterrupted during this period.

Furthermore, the Tribunal appointed an Insolvency Resolution Professional (IRP) as the Corporate Insolvency Resolution Process had been initiated. The Operational Creditor was directed to deposit a specific sum to cover the immediate expenses of the IRP, which would be reimbursed by the Committee of Creditors (CoC) as part of the Corporate Insolvency Resolution costs. The order was to be communicated to all relevant parties and the appointed IRP, with a follow-up hearing scheduled for further consideration on a specific date.