2019 (9) TMI 1383 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT - The goods were supplied on demand, however, without any reason the value of the goods have not been paid by the Respondent/debtor. The Invoices raised remained unpaid. As per the Ledger Account along with the Statement of Account the outstanding debt in question was duly acknowledged by the Respondent Debtor. As a consequence, this Bench is of the view that this is a fit case of existence of Debt and Default in payment of the said Debt; hence this Petition deserves Admission‟ - Further this Bench has also perused the Form 2 i.e. written consent of the proposed Interim Resolution Professional submitted along with this application/petition by the Operational Creditor and there is nothing on record which proves that any disciplinary action is pending against the said proposed Interim Resolution Professional. Hence, after perusal of the provisions of the Code as well as facts and circumstances of this case along with the evidences placed on record by the Petitioner, it is hereby held that this Petition/Application is Admitted. The Petition is hereby Admitted - The commencement of the Corporate Insolvency Resolution Process shall be effective from the date of the Order.

Summary

Issues involved:
1. Initiation of Corporate Insolvency Resolution Process under section 9 of the Insolvency and Bankruptcy Code, 2016.
2. Existence of debt and default in payment.
3. Appointment of Interim Resolution Professional.
4. Operation of Moratorium under Section 14 of the Code.
5. Public Announcement of the Initiation of Corporate Insolvency Resolution Process.
6. Duties of Interim Resolution Professional under Section 18 and Section 15 of the Code.

Analysis:

1. Initiation of Corporate Insolvency Resolution Process: The Petitioner, an Operational Creditor, filed a petition under section 9 of the Insolvency and Bankruptcy Code, 2016 against the Corporate Debtor for a total debt amount. A Demand Notice was served upon the Respondent, informing about the debt amount confirmed by the debtor. The Petitioner provided evidence of the outstanding debt through invoices and stated that the Respondent failed to pay the value of the goods supplied, leading to the initiation of the insolvency resolution process.

2. Existence of Debt and Default in Payment: The Tribunal examined the facts and circumstances of the case and found that the goods were supplied on demand, but the Respondent did not pay the value of the goods as per the invoices. The outstanding debt was acknowledged by the Respondent Debtor, establishing the existence of debt and default in payment. Consequently, the Tribunal admitted the Petition as there was a clear case of debt and default.

3. Appointment of Interim Resolution Professional: The Operational Creditor proposed the name of an Insolvency Professional, and the proposed Interim Resolution Professional was appointed by the Tribunal after verifying the submitted consent and ensuring no pending disciplinary actions against the professional. The appointed Interim Resolution Professional was tasked with conducting the Insolvency Resolution Process.

4. Operation of Moratorium: Upon admission of the Petition, the Moratorium provisions under Section 14 of the Code became operative, prohibiting the institution of any suit, transferring or encumbering assets of the Debtor. However, the supply of essential goods or services to the Corporate Debtor was allowed during the Moratorium period until the completion of the Insolvency Resolution Process or approval of the Resolution Plan.

5. Public Announcement of the Initiation of Corporate Insolvency Resolution Process: The Interim Resolution Professional was directed to carry out the Public Announcement of the Initiation of Corporate Insolvency Resolution Process immediately upon appointment in accordance with the provisions of the Code.

6. Duties of Interim Resolution Professional: The Interim Resolution Professional was mandated to perform duties as assigned under Section 18 and Section 15 of the Code. They were required to inform the progress of the Corporate Insolvency Resolution Process and compliance with the Tribunal's directions within 30 days and were granted liberty to provide updates earlier if necessary.

This detailed analysis covers the key issues addressed in the judgment by the National Company Law Tribunal, Mumbai Bench, providing a comprehensive overview of the legal proceedings and decisions made.