2017 (9) TMI 1850 - AT - Insolvency and Bankruptcy

Maintainability of CIRP - Initiation of CIRP - Corporate Debtor defaulted in repayment of amount - It was submitted that, the Corporate Debtor has not raised any dispute/objection to the Demand Notice of the Operational Creditor after filing of this Application under I B Code, 2016 - HELD THAT - It is established by the Operational Creditor that the nature of Debt is an Operational Debt as defined under section 5(21) of the Definitions under The Code. It has also been established that admittedly there was a Default as defined under section 3(12) of The Code on the part of the Corporate Debtor. On the basis of the evidences on record the Petitioner has established that the advance was given against the goods to be supplied and invoices were raised to claim the amount but there was non-payment of Debt on the part of the Corporate Debtor. As a consequence, after the expiry of the period as prescribed and keeping admitted facts in mind that the Operational Creditor had not received the outstanding Debt from the Corporate Debtor and that the formalities as prescribed under The Code have been completed by the Petitioner we are of the conscientious view that this Petition deserves 'Admission' - petition admitted - moratorium declared.

Summary

Issues:
1. Application for insolvency under the Insolvency and Bankruptcy Code
2. Nature of debt and default by the Corporate Debtor
3. Evidence of non-payment and admission of liability
4. Admissibility of the petition and appointment of Insolvency Resolution Professional
5. Implementation of Moratorium and further steps in the insolvency resolution process

Analysis:

1. The judgment pertains to an application filed by the Petitioner under the Insolvency and Bankruptcy Code as an Operational Creditor. The Petitioner invoked the provisions of section 9 of the Code by submitting Form No. 5 under the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016.

2. The particulars of the operational debt included a principal amount in default along with interest. The debt arose from the need for the supply of thermal coal from the Corporate Debtor, as per a Work Order issued by the Petitioner to the Debtor.

3. The Corporate Debtor failed to supply the coal despite receiving an advance payment from the Petitioner. The Debtor admitted liability to refund the advance amount but did not make the payment. The Petitioner issued demand notices, and the Corporate Debtor did not raise any dispute regarding the outstanding amount.

4. The Tribunal found that the debt qualified as an "Operational Debt" under the Code, and there was a default on the part of the Corporate Debtor. The Petitioner had provided evidence of non-payment, and the Corporate Debtor did not dispute the claim within the prescribed period, leading to the admission of the petition.

5. Following the admission of the application, the Tribunal directed the appointment of an Insolvency Resolution Professional and implementation of a Moratorium as per the provisions of the Code. The next steps in the Corporate Insolvency Resolution Process, including the Public Announcement and compliance reports, were outlined for the appointed IRP.

This comprehensive analysis covers the key issues addressed in the judgment, detailing the nature of the debt, evidence of default, admissibility of the petition, and the subsequent steps in the insolvency resolution process as directed by the Tribunal.