2019 (11) TMI 1639 - 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 ₹ 21,26,160/- including interest @24% p.a. under Section 8 of the Code. The Demand Notice was returned with the remark Left on 14.12.2018. 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 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:
1. Petition seeking Corporate Insolvency Resolution Process (CIRP) initiation due to default in payment.
2. Details of the transaction and outstanding dues.
3. Legal proceedings and actions taken by the Petitioner.
4. Appointment of Interim Resolution Professional.
5. Directions issued by the Tribunal regarding the moratorium period and essential services supply.

Analysis:
1. The Petitioner filed a Company Petition seeking to trigger the Corporate Insolvency Resolution Process against the Corporate Debtor for defaulting on a payment, citing provisions of the Insolvency & Bankruptcy Code.
2. The transaction involved the Corporate Debtor purchasing fabric from the Petitioner, with outstanding dues amounting to ?8,98,227/- as of 12.02.2016, despite acknowledging the balance in the Petitioner's ledger account on 01.04.2017.
3. Legal actions included issuing a Demand Notice under Section 8 of the Code, resorting to substituted services through newspaper publications, and producing evidence of debt and default during the hearing to establish the liability of the Corporate Debtor.
4. An Interim Resolution Professional was appointed, who consented to act in the capacity, to oversee the functions prescribed under the Insolvency & Bankruptcy Code.
5. The Tribunal, satisfied with the application, declared a Moratorium, prohibiting legal actions against the Corporate Debtor, ensuring continuity of essential services supply, specifying exceptions to Section 14 provisions, setting the moratorium period, and appointing the Interim Resolution Professional to manage the resolution process efficiently. The public announcement of the Corporate Insolvency Resolution Process was also mandated.

This detailed analysis encapsulates the key aspects of the legal judgment delivered by the National Company Law Tribunal, Mumbai Bench, highlighting the sequence of events, legal proceedings, and consequential directions issued for the effective resolution of the insolvency matter.