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2020 (1) TMI 1257 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT - The present petition is filed by the operational creditor since the payment for the invoices issued for the period of 27.01.2019 to 10.04.2019 has not been paid by the corporate debtor. The total amount of debt is stated to be of ₹ 4,85,239.34 excluding 12% additional interest per annum. Alongwith the petition, the operational creditor has filed copy of the ledger account of the corporate debtor in its books (Annexure A-11), copy of the invoices (Annexure A-5), copy of detailed computation of the outstanding in respect of the invoices raised (Annexure A-9) and bank account statement for the period 30.11.2018 to 02.04.2019 (Annexure A-10) - There is abundant evidence that the corporate debtor has made a default in discharging the debt towards the operational creditor and the same is not disputed. Further, learned counsel for the respondent-corporate has also submitted that respondent-corporate debtor is not in a position to payback the debts, the instant CP may be admitted. No objections are being raised to the completeness of the application filed under Section 9(2) of the Code. The operational debt remains unpaid, the demand notice was delivered to the corporate debtor and reply was received within the stipulated 10 days period - the proposed Resolution Professional Shri Sanjay Kumar Dewani has filed Form No. 2 in which he has stated that there are no disciplinary proceedings pending against him with the Board or Indian Institute of Insolvency Professionals of ICAI - In view of the satisfaction of the conditions provided for in Section 9(5)(i) of the Code, the petition for initiation of the CIRP process in the case of the Corporate Debtor ADI Automotives Private Limited is admitted. Application admitted - moratorium declared.
Issues Involved:
1. Jurisdiction of the Tribunal 2. Existence of operational debt and default 3. Notice of dispute and reply by the corporate debtor 4. Completeness of the application under Section 9 of the Insolvency and Bankruptcy Code, 2016 5. Appointment of Interim Resolution Professional (IRP) 6. Declaration of Moratorium Issue-wise Detailed Analysis: 1. Jurisdiction of the Tribunal: The corporate debtor, incorporated as a Public Limited Company on 16.03.2004 under the Companies Act, 2013, has its registered office in Gurgaon, Haryana. Therefore, the jurisdiction for this case lies with the Chandigarh Bench of the National Company Law Tribunal (NCLT). 2. Existence of Operational Debt and Default: The operational creditor has been supplying raw material to the corporate debtor since February 2010, maintaining a running account where payments were adjusted on a First in First Out (FIFO) basis. An outstanding amount of ?4,85,239.34 with additional interest @ 12% per annum remained unpaid. The business relationship soured in 2017 due to delayed payments. Despite continued supplies based on verbal assurances, the corporate debtor failed to clear the outstanding dues. The last payment of ?10 lacs was made on 28.03.2018. Detailed evidence, including unpaid invoices, bank statements, and ledger accounts, was provided. 3. Notice of Dispute and Reply by the Corporate Debtor: A demand notice in Form No. 4 was issued on 17.04.2019, calling for payment within 10 days. The corporate debtor, in its reply dated 26.04.2019, denied the claimed amount, stating no adjudicated claim existed, thus no default. However, the corporate debtor later admitted its inability to repay the debts, requesting the petition's admission. 4. Completeness of the Application under Section 9 of the Insolvency and Bankruptcy Code, 2016: The petition was filed by an authorized director of the operational creditor, with an affidavit verifying the contents. The proposed IRP, Mr. Sanjay Kumar Dewani, consented to his appointment, confirming no disciplinary proceedings against him. The Tribunal found the application complete, with no objections raised regarding its completeness. 5. Appointment of Interim Resolution Professional (IRP): The Tribunal appointed Mr. Sanjay Kumar Dewani as the IRP, directing him to take control and custody of the corporate debtor's assets, prepare an inventory, and act in accordance with the Code and professional ethics. He was also instructed to make a public announcement, call for claims, constitute a committee of creditors, and submit regular progress reports. 6. Declaration of Moratorium: The Tribunal declared a moratorium effective from the date of the order until the completion of the Corporate Insolvency Resolution Process (CIRP) or approval of the resolution plan or liquidation order. The moratorium includes: - Suspension of suits or proceedings against the corporate debtor - Prohibition on transferring or disposing of assets - Restriction on recovering or enforcing security interests - Continuation of essential goods or services supply The Tribunal directed all parties to cooperate with the IRP and ensured communication of the order to both parties and the IRP. Conclusion: The Tribunal, satisfied with the conditions under Section 9(5)(i) of the Code, admitted the petition for initiating the CIRP against ADI Automotives Private Limited, declaring a moratorium and appointing Mr. Sanjay Kumar Dewani as the IRP.
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