2019 (1) TMI 1907 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existenc eof debt and dispute or not - service of demand notice - HELD THAT - The demand notice was sent by electronic mode which is one of the permissible modes of service - Sub-rule (2) of Rule 5 of Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 makes it clear that the notice could either be sent by hand, registered post or speed post or by electronic mail service to a whole time director or designated partner or key managerial personnel of the corporate debtor. The instant petition was filed on 15.05.2018 i.e. much after the expiry of 10 days period as required under Section 9 of the Code. The learned counsel for the petitioner referred to the affidavit of the proprietor of the operational creditor in which it is stated that no dispute of unpaid operational debt has been received from the corporate debtor in order to comply with the requirement of Section 9(3)(b) of the Code - The petitioner has also filed the bank statement issued by Axis Bank where the petitioner is maintaining account and the credits were being received from the corporate debtor, though certificate in terms of Section 9(3)(c) of the Code has not been filed but we find that the same being not mandatory and the statement of accounts filed by the petitioner would be sufficient. All the ingredients of clause (i) of Sub-section (5) of Section 9 of the Code have been fulfilled by the petitioner. The petition filed under Section 9 of the Code is, therefore, admitted - moratorium declared.

Summary

Issues involved:
Initiating corporate insolvency resolution process under Section 9 of the Insolvency and Bankruptcy Code, 2016 against a corporate debtor for non-payment of dues.

Detailed Analysis:

1. Service of Demand Notice:
The petitioner, an operational creditor, filed a petition under Section 9 of the Insolvency and Bankruptcy Code against the respondent-corporate debtor for non-payment of dues. The first issue discussed was whether the demand notice was served in accordance with the requirements of Section 5(1) of the Rules. The demand notice was sent by electronic mode, which is a permissible mode of service as per the Rules. The notice was sent to key managerial personnel as defined in the Companies Act, 2013. The petitioner provided evidence that the demand notice was delivered to the e-mail addresses without bouncing back, fulfilling the service requirements.

2. Compliance with Code Provisions:
The petition was filed after the expiry of the 10-day period as required under Section 9 of the Code. However, the petitioner stated that no dispute of unpaid operational debt had been received from the corporate debtor. The petitioner submitted a bank statement showing credits received from the corporate debtor, although a certificate as per Section 9(3)(c) of the Code was not filed. The court found the statement of accounts sufficient and not mandatory for admission of the petition.

3. Appointment of Interim Resolution Professional:
The petitioner proposed the name of a Resolution Professional to be appointed as the Interim Resolution Professional if the petition is admitted. The Resolution Professional provided all requisite information and certifications, confirming no ongoing proceedings under the Code or pending disciplinary actions. The court found that all requirements of Section 9(5)(i) of the Code were fulfilled, leading to the admission of the petition.

4. Admission of Petition:
Considering the fulfillment of all necessary conditions, the petition filed under Section 9 of the Code was admitted. The court scheduled the matter for a formal order of declaration of moratorium and the appointment of the Interim Resolution Professional on a specified date. The order was to be communicated to both parties for further proceedings.

This detailed analysis of the judgment showcases the legal process followed in initiating insolvency proceedings against a corporate debtor for non-payment of dues, emphasizing compliance with statutory provisions and procedural requirements under the Insolvency and Bankruptcy Code.