2019 (11) TMI 1638 - Tri - Insolvency and Bankruptcy

Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - Section 8 9 of the Insolvency Bankruptcy Code - HELD THAT - On 10.12.2018 the Petitioner issued Demand Notice demanding a sum of ₹ 36,36,52,133/- including interest @24% p.a. under Section 8 of the Code. The Demand Notice was returned with the remark not known . Subsequently the Petitioner was allowed to take out substituted services by publication in English and Marathi newspapers and affidavit of services to that effect was filed. However, the Corporate Debtor failed to appear before this Tribunal. During the hearing of the petition on 11.11.2019 the Petitioner has produced the confirmation of balance by the Corporate Debtor wherein the liability of ₹ 14,41,26,205/- is acknowledge by the Corporate Debtor. The Petitioner is enclosed the invoices which were raised wherein the Petitioner is entitled for interest @24% p.a. on the delay in payments. The above discussion clearly shows that there is a clear debt and default as such the Corporate Debtor is liable to pay the amount as claimed by the Petitioner. This Bench having been satisfied with the petition filed by the Petitioner which is in compliance of provisions of Section 8 9 of the Insolvency Bankruptcy Code admits this application declaring Moratorium with the directions - Petition admitted - moratorium declared.

Summary

Issues:
Petition seeking Corporate Insolvency Resolution Process (CIRP) against Corporate Debtor for default in payment.
Confirmation of outstanding dues by Corporate Debtor.
Appointment of Interim Resolution Professional.
Granting of Moratorium and its specific directions.
Public announcement of CIRP.
Appointment of Interim Resolution Professional.

Analysis:

The judgment pertains to a Company Petition filed by Risa International Limited seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against Aakash Lifestyle Private Limited for default in payment amounting to ?36,36,52,133, including interest at 24% per annum. The Petitioner claimed that the Corporate Debtor failed to clear outstanding dues despite part-payments made until a certain date. The Petitioner issued a Demand Notice under Section 8 of the Insolvency & Bankruptcy Code, which was returned as "not known." Subsequently, substituted services were allowed by publication in newspapers, but the Corporate Debtor did not appear before the Tribunal.

During the hearing, the Petitioner presented confirmation of the balance by the Corporate Debtor, acknowledging a liability of ?14,41,26,205. The Petitioner also provided invoices showing entitlement to interest on the delayed payments at 24% per annum. The Tribunal found a clear debt and default, holding the Corporate Debtor liable to pay the claimed amount. An Interim Resolution Professional consented to act in the matter, and the Tribunal, satisfied with the petition's compliance with the Code's provisions, admitted the application, declaring a Moratorium with specific directions.

The Moratorium prohibited the institution or continuation of suits against the Corporate Debtor, transfer or disposal of assets, enforcement of security interests, and recovery of property. It also ensured the supply of essential goods or services to the Corporate Debtor continued uninterrupted. Certain transactions exempted from Section 14 provisions were specified, and the order of moratorium was effective from a specified date until the completion of CIRP or approval of a resolution plan. The public announcement of CIRP was mandated, and an Interim Resolution Professional was appointed to carry out functions under the Code.

The Registry was directed to communicate the order to both parties and the Interim Resolution Professional promptly, ensuring the necessary steps were taken in compliance with the judgment.