2020 (1) TMI 1244 - 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 - On perusal of the records it is found that having failed to get the outstanding payments from the respondent, the applicant was compelled to issue demand notice under section 8 of I B Code on 20.01.2019. Record also shows that the respondent has not raised dispute against the demand notice, so issued by the applicant. On perusal of the record it is found that the petition is complete in all respect. This adjudicating authority is of the considered view that operational debt is due and payable to the Applicant and it fulfilled the requirement of IB Code as enshrined in the Code. That, Applicant is an Operational Creditor within the meaning of Section 5 sub-section 20 of the Code. From the aforesaid material on record, petitioner is able to establish that there exists debt as well as there is/are occurrence of default on the part of the corporate debtor and the amount claimed by operational creditor is payable in law by the corporate debtor as the same is not barred by any law of limitation and/or any other law for the time being in force - It is also a matter of record that the corporate debtor has issued a cheque in favour of the applicant for ₹ 25.00 lacs and the said cheque has been dishonoured; that itself amount to admission on the part of the corporate debtor. Thus, it is a fit case to initiate Insolvency Resolution Process by admitting the Application under Section 9(5)(1) of the Code - application admitted - moratorium declared.

Summary

Issues Involved:
Admission of insolvency petition under Section 9 of The Insolvency and Bankruptcy Code, 2016.

Detailed Analysis:
1. Operational Creditor's Petition: The operational creditor filed a petition under Section 9 of The Insolvency and Bankruptcy Code, 2016, stating that the respondent company is in default of a substantial amount, including interest. The operational creditor highlighted that despite reminders and a demand notice, the respondent failed to pay the outstanding dues.

2. Submission of Documents: The operational creditor submitted various documents to support the claim, such as invoices, demand notice, statement of accounts, bank statement, authority letter, affidavit, and consent letter of the Interim Resolution Professional (IRP) in form No. 2.

3. Non-Compliance by Respondent: The respondent, despite multiple opportunities, did not file a reply and sought adjournments on the pretext of settlement. The respondent's cheque issued for settlement was dishonoured, indicating non-compliance with the payment obligations.

4. Judicial Precedent Consideration: Referring to the case of Mobilox Innovative Private Limited vs. Kirusa Software Private Limited, the adjudicating authority assessed the conditions required for admitting an application under Section 9 of the Act, emphasizing the need to establish the existence of operational debt, due payment, and absence of dispute.

5. Decision and Order: The adjudicating authority found the operational debt due and payable, meeting the requirements of the Insolvency & Bankruptcy Code. The authority noted the dishonoured cheque as an admission of debt by the respondent, leading to the initiation of the insolvency resolution process. The authority declared a moratorium under Section 13 of the Code and appointed an Interim Resolution Professional (IRP) to manage the resolution process.

6. Moratorium and Direction: The order declared a moratorium, prohibiting various actions against the corporate debtor, and directed the IRP to make a public announcement initiating the corporate insolvency resolution process. The order specified the effect and duration of the moratorium until the completion of the resolution process or liquidation, as applicable.

7. Appointment of IRP: The authority appointed Mr. Paresh Chandulal Mehta as the Interim Resolution Professional, following the proposal by the operational creditor. The communication of the order was directed to the applicant, corporate debtor, and the appointed IRP for necessary action.

8. Regulatory Compliance: The registry was instructed to inform the Registrar of Companies about the corporate insolvency resolution process to prevent any proceedings for striking off the respondent company's name, ensuring the protection of stakeholders' interests during the resolution process.