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2019 (9) TMI 1460 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues due to Operational Creditors - existence of debt and dispute or not - HELD THAT - The present petition is filed by the Operational Creditor since payment for invoices issued in respect of the goods supplied have not been paid by the corporate debtor. The total amount of debt is stated to be 55, 28, 133/-. Along with the petition the Operational Creditor has filed the Ledger of the Corporate Debtor in the books of the Operational Creditor which is placed as annexure A-7 of the petition. The statement of accounts of Operational Creditor maintained with Union Bank of India ranging from 01.04.2015 to 14.12.2018 is also found attached with the petition as Annexure A-8 - It is evident that the Corporate Debtor has already made the payment of 90, 000/- after issuance of the demand notice as prescribed in Form 4 dated 31.10.2018 thereby reducing the liability from 55, 28, 133/- to 54, 38, 133/-. No objections are being raised to the completeness of the application filed under Section 9 (2) of the Code. The operational debt remains unpaid and the demand notice under Section 8 of the Code was duly delivered to the Corporate Debtor on 31.10.2018. The reply to the demand notice has been examined above and found to be not acceptable. The proposed Resolution Professional Shri Vigyan Prakash Arora 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 is admitted for initiation of the CIRP process in the case of the Corporate Debtor M/s. Addinath Rubbers Private Limited - moratorium declared.
Issues:
Initiation of Corporate Insolvency Resolution Process under Section 9 of the Insolvency and Bankruptcy Code, 2016. Analysis: The petition was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 by an Operational Creditor against a Corporate Debtor for initiating the Corporate Insolvency Resolution Process (CIRP). The Corporate Debtor was engaged in the manufacturing of rubber products and had entered into an agreement with the Operational Creditor for the sale of raw materials. Invoices were issued from 10.05.2016 to 30.10.2018, totaling a debt of ?55,28,133. A demand notice was issued on 31.10.2018, and a partial payment of ?90,000 was made by the Corporate Debtor after the notice. The Corporate Debtor denied the liability in its reply to the demand notice, citing ongoing settlement issues with its bank. The Operational Creditor verified the contents of the petition through affidavits and proposed an Interim Resolution Professional. The respondent-Corporate Debtor failed to file a reply despite being granted time to do so. The respondent later admitted to defaulting on the payment, indicating no dispute regarding the debt and default by the Corporate Debtor. The Tribunal referenced the case of Mobilox Innovations Private Limited Vs. Kirusa Software Private Limited, emphasizing the need for a plausible contention requiring further investigation to reject a dispute. The Operational Creditor provided evidence of the unpaid debt through ledger statements and accounts. The Corporate Debtor's partial payment reduced the outstanding debt to ?54,38,133. The Tribunal found no dispute as to the debt and default by the Corporate Debtor. The Tribunal admitted the petition for initiation of the CIRP process against the Corporate Debtor, Addinath Rubbers Private Limited. Moratorium was declared, suspending legal actions against the Corporate Debtor and appointing an Interim Resolution Professional. The Interim Resolution Professional was directed to manage the affairs of the Corporate Debtor, prepare asset inventories, and conduct public announcements for claims submission. The Corporate Debtor and its management were instructed to cooperate with the Interim Resolution Professional, who would provide regular progress reports to the Tribunal. The Tribunal communicated the order to both parties and directed the petitioner to deliver a copy to the Interim Resolution Professional. The Registry was tasked with sending a copy of the order to the Interim Resolution Professional via email.
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