2019 (4) TMI 1975 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditor or not - existence of debt and dispute or not - service of notice - Time limitation - HELD THAT - On perusal of the material available on record it is found that service of notice is complete. That despite issuance of notice by the petitioner the respondent has not made payment of outstanding amount nor raised any dispute. That no dispute has been raised by the respondent. Time Limitation - HELD THAT - On perusal of the record it is found that the applicant has annexed to the application invoices for the period from 01.08.2014 to 01.03.2017 for the services rendered to the respondent. On perusal of the bank statement it is found that respondent has never made any payment towards the services rendered by the applicant. It is also found that the bills raised from 01.08.2014 to 01.08.2015 are time barred in as much as there is no acknowledgement of debt which can revive the period of limitation. However the invoices raised 12.11.15 onwards are within limitation. Existence of debt and dispute or not - HELD THAT - The operational debt is due to the Applicant. Therefore Applicant is an Operational Creditor within the meaning of sub-section (5) of Section 20 of the Code. From the aforesaid material on record it is established that there exists debt as well as there is occurrence of default. That the Application filed by the Applicant is complete in all respects. That record show that the notice issued by the applicant is received by the respondent. From the above stated discussion and on the basis of material available on record it is a fit case to initiate Insolvency Resolution Process by admitting the Application under Section 9(5)(1) of the Code - application admitted - moratorium declared.

Summary

Issues:
1. Application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016.
2. Claim of operational debt by the applicant against the respondent.
3. Existence of debt and default by the respondent.
4. Appointment of an interim resolution professional.
5. Declaration of moratorium and initiation of corporate insolvency resolution process.

Analysis:

Issue 1: Application under Section 9 of the Insolvency and Bankruptcy Code, 2016
The applicant, an operational creditor, filed an application under Section 9 of the Code against the respondent, a corporate debtor, seeking initiation of insolvency proceedings due to non-payment of outstanding debt for services provided.

Issue 2: Claim of operational debt
The applicant provided services to the respondent under various contracts, raising invoices for the same. Despite reminders and notices, the respondent failed to clear the outstanding amount, leading to the claim of operational debt amounting to a specified sum.

Issue 3: Existence of debt and default
Upon review of records and submissions, it was found that the respondent did not dispute the debt and had not made any payments towards the services rendered by the applicant. The debt was established, and default was confirmed, justifying the initiation of insolvency resolution process.

Issue 4: Appointment of an interim resolution professional
The applicant proposed the appointment of an interim resolution professional to oversee the insolvency resolution process. The proposed professional's details were provided, and the application was found to be complete, warranting the appointment as per the Code's provisions.

Issue 5: Declaration of moratorium and initiation of corporate insolvency resolution process
The Tribunal, after thorough examination of the case, declared a moratorium on certain actions against the corporate debtor and directed the Insolvency Resolution Professional to make a public announcement initiating the corporate insolvency resolution process. The order of moratorium was to remain in effect until the completion of the resolution process or as per further directives.

In conclusion, the Tribunal admitted the application, declared a moratorium, and directed the initiation of the insolvency resolution process, ensuring the protection of the rights and interests of the parties involved in accordance with the provisions of the Insolvency and Bankruptcy Code, 2016.