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2020 (5) TMI 673 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditor - existence of debt and dispute or not - HELD THAT - The respondent-company is unable to pay the outstanding operational debt which is due and payable arising in the usual and ordinary course of business and has become commercially insolvent. In such circumstances, it is just and equitable and in the interest of the justice that the corporate insolvency resolution process be initiated against the respondent-company - the corporate debtor has defaulted in making payment and the date of default is August 23, 2016 to September 27, 2016. The petition is filed on August 30, 2018 under section 9 of the Insolvency and Bankruptcy Code, 2016 for the unpaid operational debt due and defaulted of ₹ 12,11,305. Invoices are of June 23, 2016, July 6, 2016, July 8, 2016, July 18, 2016 and July 27, 2016. Date of default starts from August 23, 2016 to September 23, 2016 - No pre-existing dispute before the filing of this application is observed. This Adjudicating Authority is satisfied that (a) Existence of debt is above ₹ 1 lakh. (b) Debt is due and defaulted. (c) Default has started from on August 23, 2016 to August 27, 2016. (d) The petition has been filed within the limitation period as the date of default is August 23, 2016 and the petition has been filed on September 30, 2018, i. e., within three years of the default. (e) Copy of the application filed before the Tribunal has been sent to the corporate debtor, and the application filed by the petitioner under section 9 of the IBC is found to be complete for the purpose of initiation of corporate insolvency resolution process against the corporate debtor. Petition admitted - moratorium declared.
Issues Involved:
1. Existence of operational debt and default. 2. Admissibility of the petition under Section 9 of the Insolvency and Bankruptcy Code, 2016. 3. Appointment of an Interim Resolution Professional (IRP). 4. Declaration of moratorium. Detailed Analysis: 1. Existence of Operational Debt and Default: The petitioner, SGV Foils P. Ltd., claimed an operational debt of ?12,11,305 against the corporate debtor, Jay Polypack P. Ltd., comprising ?7,84,735 for goods supplied and ?4,26,571 as interest for late payments at 24% per annum. The transactions between the parties began in 2015, with the first invoice dated December 11, 2015, and the last invoice dated July 27, 2016. Despite multiple reminders and part payments, the corporate debtor failed to clear the outstanding dues. The corporate debtor's director admitted the liability and issued post-dated cheques, which subsequently bounced. The default dates were identified from August 23, 2016, to September 27, 2016. 2. Admissibility of the Petition: The petition was filed on August 30, 2018, under Section 9 of the Insolvency and Bankruptcy Code, 2016. The tribunal verified the following: - The debt amount exceeded ?1 lakh. - The debt was due and defaulted. - The petition was filed within the limitation period, i.e., within three years from the date of default. - There was no pre-existing dispute regarding the debt. 3. Appointment of an Interim Resolution Professional (IRP): The operational creditor did not propose any IRP. Therefore, the tribunal appointed Shri Pradeep Kumar Kabra as the IRP from the panel prepared by the Insolvency and Bankruptcy Board of India (IBBI). The IRP was directed to file a declaration disclosure statement within two days and to make a public announcement of the moratorium. The IRP was also instructed to perform duties as per Sections 15, 17, 18, 20, and 21 of the Insolvency and Bankruptcy Code, 2016, with utmost dedication and honesty. 4. Declaration of Moratorium: Upon admission of the petition, the tribunal declared a moratorium under Sections 13 and 14 of the Insolvency and Bankruptcy Code, 2016, prohibiting: - Institution or continuation of suits or proceedings against the corporate debtor. - Transfer, encumbrance, alienation, or disposal of any assets of the corporate debtor. - Foreclosure, recovery, or enforcement of any security interest created by the corporate debtor. - Recovery of any property by an owner or lessor occupied by the corporate debtor. The moratorium would remain effective until the completion of the corporate insolvency resolution process. The IRP was tasked with protecting and preserving the value of the corporate debtor's property and managing its affairs in compliance with the Code. Conclusion: The tribunal admitted the petition on May 27, 2020, and initiated the corporate insolvency resolution process against Jay Polypack P. Ltd. The tribunal's decision was based on the verified existence of debt and default, the timely filing of the petition, and the absence of any pre-existing disputes. The tribunal appointed an IRP and declared a moratorium to facilitate the resolution process.
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