2018 (11) TMI 1783 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - debt due and payable or not - HELD THAT - The amount due to the Applicant from the Respondent is in respect of services including employment. Therefore, the amount claimed by the Applicant from the Respondent is operational debt within the meaning of Section 5, sub-section (21) of the Code. The operational debt is due to the Applicant. Therefore, Applicant is an Operational Creditor within the meaning of sub-section (5) of Section 20 of the Code - That the amount is due from the Respondent to the Applicant. Respondent is a Company registered under the Companies Act. Therefore, Respondent is a Corporate Debtor within the meaning of sub-section (8) of Section 3 of the Code. The application is complete and deserves to be admitted - petition admitted - moratorium declared.

Summary

Issues:
- Application for initiation of corporate insolvency resolution process under Section 9 of the Insolvency and Bankruptcy Code, 2016.
- Determination of operational debt and corporate debtor status.
- Compliance with the Code's procedural requirements.
- Appointment of Interim Resolution Professional.
- Declaration of moratorium and directions for the Corporate Insolvency Resolution Process.

Analysis:
1. Application for Corporate Insolvency Resolution Process:
- The application was filed by an operational creditor seeking initiation of the corporate insolvency resolution process against the corporate debtor under Section 9 of the Insolvency and Bankruptcy Code, 2016.

2. Operational Debt and Corporate Debtor Status:
- The applicant provided accounting services to the corporate debtor, and the debt due was categorized as operational debt under Section 5(21) of the Code.
- The corporate debtor, being a company registered under the Companies Act, was recognized as a Corporate Debtor under Section 3(8) of the Code.

3. Compliance with Procedural Requirements:
- The application was found to be complete, and despite service of notice and demand, the respondent failed to clear the debt or raise any dispute.
- The respondent's non-appearance and lack of objection indicated a lack of dispute regarding the debt, fulfilling the requirements of the Code.

4. Appointment of Interim Resolution Professional:
- The applicant proposed the name of an Interim Resolution Professional in the application, meeting the procedural obligations under the Code.

5. Declaration of Moratorium and Process Directions:
- The Adjudicating Authority admitted the petition under Section 9 of the Code, declaring a moratorium under Section 14 and issuing specific directions.
- The moratorium prohibited various actions against the corporate debtor, with exceptions for essential services, and specified the duration of the moratorium until the completion of the Corporate Insolvency Resolution Process.
- The Bench appointed the proposed Interim Resolution Professional and directed the Registry to communicate the order to the parties involved, ensuring compliance with the procedural requirements.

In conclusion, the Tribunal's judgment involved a comprehensive analysis of the issues related to the application for corporate insolvency resolution, determination of operational debt, compliance with procedural requirements, appointment of an Interim Resolution Professional, and the declaration of moratorium with specific process directions for the Corporate Insolvency Resolution Process.