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2020 (1) TMI 1262 - 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 - time limitation - service of notice - HELD THAT - The demand notice dated 20.05.2019 was sent at the address as per the master data at Page No. 91 of the petition in which the registered office is shown as Plot No. 145, DLF Industrial Estate No. 1 Faridabad Haryana - 121003. The copy of demand notice duly acknowledged by the Corporate Debtor is at Page 47 of the petition - The Corporate Debtor has chosen not to reply to the demand notice dated 20.05.2019. Whether the operational debt was disputed by the corporate debtor? - HELD THAT - As a statutory requirement under Section 9(3)(b) of the Code an affidavit dated 08.06.2019 (Annexure A-7 of the petition) has been placed by the operational creditor stating that there is no dispute communicated by the Corporate Debtor for the unpaid operational debt and no reply to the said demand notice has been received at all - the demand notice in Form No. 3 was properly delivered by the Operational Creditor and no pre-existing dispute is proved. It has been shown that the corporate debtor has failed to make payment of the aforesaid amount due as mentioned in the statutory notice till date. It is also observed that the conditions under Section 9 of the Code stand satisfied - application admitted - moratorium declared.
Issues Involved:
1. Proper service of demand notice. 2. Existence of any dispute regarding the operational debt. 3. Compliance with Section 9(5)(i) of the Insolvency and Bankruptcy Code, 2016. 4. Appointment and duties of the Interim Resolution Professional (IRP). 5. Declaration and implications of moratorium. Issue-wise Detailed Analysis: 1. Proper Service of Demand Notice: The first issue for consideration is whether the demand notice in Form No. 3 dated 20.05.2019 was properly served. The demand notice was sent to the registered office of the corporate debtor as per the master data, and the copy of the notice was duly acknowledged by the corporate debtor. The corporate debtor did not reply to the demand notice dated 20.05.2019. 2. Existence of Any Dispute Regarding the Operational Debt: The next issue for consideration is whether the operational debt was disputed by the corporate debtor. The corporate debtor neither filed any reply to the petition nor disputed the liability towards the operational creditor. There was no notice given by the corporate debtor relating to a dispute of the unpaid operational debt. The learned counsel for the respondent admitted the debt and stated that the respondent is not in a position to repay the said debt and has no objection if the petition is admitted. 3. Compliance with Section 9(5)(i) of the Insolvency and Bankruptcy Code, 2016: The provisions of Section 9(5)(i) of the Code stipulate that the Adjudicating Authority shall admit the application if: - The application is complete. - There is no payment of the unpaid operational debt. - The invoice or notice for payment has been delivered by the operational creditor. - No notice of dispute has been received by the operational creditor. - There is no disciplinary proceeding pending against any proposed resolution professional. The Hon'ble Supreme Court in Mobilox Innovations Private Limited Vs. Kirusa Software Private Limited clarified that the adjudicating authority must reject the application if there is a notice of dispute. However, in this case, no such dispute exists, and the application filed in Form No. 5 was found to be complete. The total unpaid operational debt was ?1,25,580/- (inclusive of interest of ?9,729/-). The demand notice was properly delivered, and no pre-existing dispute was proved. 4. Appointment and Duties of the Interim Resolution Professional (IRP): The operational creditor proposed Mr. Sameer Rastogi as the Interim Resolution Professional (IRP), and his consent was furnished in Form No. 2. The Law Research Associate of the Tribunal checked the credentials of Mr. Sameer Rastogi and found nothing adverse against him. Thus, Mr. Sameer Rastogi was appointed as the IRP with the following directions: - The term of appointment shall be in accordance with Section 16(5) of the Code. - The powers of the Board of Directors shall stand suspended, and the management of the affairs shall vest with the IRP. - The IRP shall prepare a complete list of inventory of assets of the Corporate Debtor. - The IRP shall act in accordance with the Code and the rules framed thereunder. - The IRP shall cause a public announcement within three days of initiation of the Corporate Insolvency Resolution Process (CIRP). - The Corporate Debtor and associated personnel shall extend all cooperation to the IRP. - The IRP shall constitute a Committee of Creditors and file a report certifying its constitution. - The IRP shall send regular progress reports to the Tribunal every fortnight. 5. Declaration and Implications of Moratorium: The Tribunal declared a moratorium in terms of sub-section (1) of Section 14 of the Code, which includes: - The institution or continuation of suits or proceedings against the corporate debtor. - Transferring, encumbering, alienating, or disposing of any assets of the corporate debtor. - Any action to foreclose, recover, or enforce any security interest created by the corporate debtor. - The recovery of any property by an owner or lessor where such property is occupied by the corporate debtor. The supply of essential goods or services to the corporate debtor shall not be terminated during the moratorium period. The moratorium shall have effect from the date of the order until the completion of the CIRP or until the Tribunal approves the resolution plan or passes an order for liquidation. Conclusion: The petition for initiation of the Corporate Insolvency Resolution Process (CIRP) against the corporate debtor was admitted. The Tribunal directed the declaration of moratorium and the appointment of Mr. Sameer Rastogi as the Interim Resolution Professional (IRP). The Tribunal ensured compliance with the necessary legal provisions and directed the IRP to follow specific duties and report regularly to the Tribunal.
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