2019 (9) TMI 1453 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - Operational Debt or not - existence of debt and dispute or not - HELD THAT - On perusal of the records it is found that the respondent has not raised any dispute regarding the operational debt payable to the operational creditor. Moreover, the respondent has accepted and acknowledged the claim amount by way of affidavit. In the light of the provisions thereof as enshrined in Insolvency Bankruptcy Code, this adjudicating authority is of the considered view that operational debt is due to the Applicant. That, service is complete and no dispute has been raised by the respondent. That, Applicant is an Operational Creditor within the meaning of sub-section (5) of Section 20 of the Code. From the aforesaid material on record, petitioner is able to establish that there exists debt as well as occurrence of default. That, the Application filed by the Applicant is complete in all respects - Petition admitted - moratorium declared.

Summary

Issues:
- Application under Section 9 of The Insolvency and Bankruptcy Code, 2016
- Existence of operational debt
- Dispute between the parties
- Appointment of Interim Resolution Professional
- Declaration of moratorium

Analysis:
1. Application under Section 9 of The Insolvency and Bankruptcy Code, 2016:
- The petitioner, an operational creditor, filed a petition under Section 9 of the Code against the respondent, a corporate debtor, for outstanding dues.
- The petitioner submitted invoices for the supply of goods and a demand notice, which the respondent failed to dispute.

2. Existence of operational debt:
- The petitioner claimed an outstanding amount of &8377; 5,88,95,336/-, including interest, against the respondent for goods supplied.
- The respondent acknowledged the debt due to operational constraints and lack of financial liquidity.

3. Dispute between the parties:
- The respondent did not raise any dispute regarding the operational debt and accepted the claim amount by way of affidavit.
- The adjudicating authority found that the debt was due to the applicant, and no dispute was raised by the respondent.

4. Appointment of Interim Resolution Professional:
- The adjudicating authority appointed an Interim Resolution Professional based on the petitioner's proposal.
- The authority directed the professional to declare a moratorium and initiate the corporate insolvency resolution process.

5. Declaration of moratorium:
- The petition was admitted, and a moratorium was declared prohibiting various actions against the corporate debtor.
- The order of moratorium was to be effective from the date of receipt of the order until the completion of the insolvency resolution process.

In conclusion, the Tribunal admitted the petition, appointed an Interim Resolution Professional, and declared a moratorium to protect the interests of the parties involved in the insolvency proceedings. The decision was based on the lack of dispute over the operational debt and the need to initiate the insolvency resolution process in accordance with the provisions of the Insolvency and Bankruptcy Code.