2018 (12) TMI 1701 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Respondent/Corporate Debtor unable to liquidate its Operational debt - HELD THAT - In view of the failure of the Corporate Debtor to liquidate the outstanding liability, the Applicant/Operational Creditor issued a demand notice dated 21.03.2018 under Section 8 of the Code which was not replied to. The petitioner applicant has now filed the present petition in the required format, along with the supporting affidavit that no notice of dispute has been raised. Compliance of the provision of Section 9(3)(c) is also on record. The Operational Creditor has filed the necessary documents in support of his case which include the photocopies of the dishonoured cheques and the returned memos which form the basis of their complaint under Section 138 of the Negotiable Instruments Act. The statement of their Bank account does not reflect credit of the amounts under the dishonoured cheques - The respondent was served through the process of the Bench. None appeared nor was any reply filed. The Corporate Debtor was therefore proceeded ex-parte. Application admitted - moratorium declared.

Summary

Issues:
Initiation of Corporate Insolvency Process due to failure to liquidate operational debt.

Analysis:
The petitioner, as an Operational Creditor, sought initiation of Corporate Insolvency Process against the Respondent/Corporate Debtor for its inability to pay its operational debt. The Operational Creditor provided services for setting up air conditioning units to the Corporate Debtor, resulting in an outstanding amount of &8377; 46,19,969. Despite repeated reminders and dishonoured cheques, the Corporate Debtor failed to reduce the liability. Invoices were raised against the supply of goods and equipment, reflecting the debt owed by the Corporate Debtor.

The Operational Creditor issued a demand notice under Section 8 of the Code, which went unanswered. The Operational Creditor filed the petition with supporting documents, including dishonoured cheques and bank statements. The Corporate Debtor was served but did not respond, leading to an ex-parte proceeding. With no dispute raised, the Tribunal considered the Operational Creditor's plea and imposed a moratorium under Section 14 of the Insolvency & Bankruptcy Code, 2016, preventing legal actions against the Corporate Debtor.

The Tribunal approved the appointment of an Interim Resolution Professional (IRP) proposed by the Operational Creditor's counsel. The IRP, Mr. Sanjay Kumar Goel, was directed to undertake necessary actions as per the Code's provisions. The IRP was instructed to submit a report within the statutory period, and the order was to be shared with both parties and the IRP. The case was scheduled for further consideration on 10th January 2019.