2019 (6) TMI 1460 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - debt due and payable or not - HELD THAT - The operational creditor has established the existence of debt and default by the corporate debtor company. The Tribunal in the circumstances is of the view that the corporate debtor is unable to give satisfactory explanation in relation to any pending dispute or the claim being paid and that this petition requires to be admitted in view of the default and that CIRP is required to be initiated against the corporate debtor. The application/petition stands admitted in terms of section 9(5) of the IBC, 2016 and the moratorium shall come in to effect as of this date.

Summary

Issues:
Application under section 9 of the Insolvency and Bankruptcy Code, 2016 for initiation of corporate insolvency resolution process against a corporate debtor.

Detailed Analysis:

1. Background and Debt Claim:
The operational creditor filed a petition under section 9 of the IBC against the corporate debtor for non-payment of consultancy and professional services amounting to ?35,00,000. The corporate debtor issued multiple cheques, some of which were dishonored, leading to a total default amount of ?26,85,907. A notice under section 138 of the Negotiable Instruments Act was also issued.

2. Statutory Demand Notice and Response:
A statutory demand notice was sent to the corporate debtor demanding payment within 10 days, following which a detailed reply was received from the corporate debtor claiming partial payment made to a third party. However, the operational creditor contested that no payment was received after a certain point, and the cheques deposited were returned unpaid.

3. Dispute and Admittance of Petition:
The corporate debtor claimed a pre-existing dispute based on a police complaint filed after receiving the notice, but the Tribunal found the complaint post-dated the notice and did not constitute a valid dispute under the IBC. The Tribunal noted discrepancies in the claim of payment made to a third party and admitted the petition due to the corporate debtor's failure to provide a satisfactory explanation for the default.

4. Appointment of Interim Resolution Professional and Moratorium:
In light of the admitted petition, an interim resolution professional was appointed. The moratorium under section 14(1) of the IBC was imposed, restricting the corporate debtor from disposing of assets or initiating legal proceedings. Essential supplies to the corporate debtor were to continue during the moratorium period.

5. Payment to Interim Resolution Professional:
The applicant was directed to pay ?2,00,000 to the interim resolution professional for expenses. The application was officially admitted, and the moratorium came into effect immediately. Copies of the order were to be communicated to all relevant parties and authorities.

This detailed analysis summarizes the key aspects of the judgment, outlining the legal proceedings and decisions taken by the Tribunal in response to the application under the Insolvency and Bankruptcy Code, 2016.