2019 (11) TMI 1659 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditor - issuance of debt and dispute or not - HELD THAT - Even though, the Counsel for the Corporate Debtor has attended for all the hearings, no reply was filed, this bench has heard both the sides and reserved the matter for orders - On going through the Form-5, the related documents submitted therein, and after hearing the submissions, this bench is of the view that the Corporate Debtor has committed default and the petition deserves admission. This Bench having been satisfied with the application filed by the Operational Creditor which is in compliance of provisions of Section 8 9 of the Insolvency Bankruptcy Code admits this application declaring Moratorium - Application allowed.

Summary

Issues involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP) against a Corporate Debtor for default in payment.
2. Examination of evidence presented by the Petitioner to support the claim of default.
3. Assessment of compliance with the provisions of the Insolvency & Bankruptcy Code.
4. Appointment of an Interim Resolution Professional and declaration of Moratorium.

Detailed Analysis:

1. The Company Petition was filed by Om Traders seeking to trigger the Corporate Insolvency Resolution Process against SARU Agro Foods Limited for defaulting on a payment of ?11,99,138/- along with interest. The Petitioner alleged the default under Section 8 and 9 of the Insolvency & Bankruptcy Code, supported by Rule 5 and 6 of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016.

2. The Petitioner supplied garlic seeds to the Corporate Debtor as per a purchase order and raised an invoice of ?11,50,000/-. After adjusting the payments made, a balance of ?9,65,000/- was still due from the Corporate Debtor. The Petitioner issued a Demand Notice under Section 8 of the Code, demanding the total outstanding amount of ?11,99,138/-, inclusive of interest.

3. The Petitioner submitted relevant documents such as the purchase order, invoice, and an affidavit stating no notice of dispute was received from the Corporate Debtor, as required under Section 9(3)(b) of the Code.

4. After considering the evidence presented and hearing both parties, the bench found that the Corporate Debtor had indeed defaulted, leading to the admission of the petition. An Interim Resolution Professional was appointed, and a Moratorium was declared to protect the interests of all stakeholders involved in the insolvency resolution process.

5. The Moratorium imposed restrictions on legal actions against the Corporate Debtor, ensured continuity of essential supplies, and specified the duration of the moratorium until the completion of the Corporate Insolvency Resolution Process or other specified events. The appointment of the Interim Resolution Professional was aimed at facilitating the resolution process efficiently.

6. The judgment concluded by directing the Registry to communicate the order to the parties and the appointed Interim Resolution Professional promptly, ensuring the initiation and proper administration of the Corporate Insolvency Resolution Process in compliance with the Insolvency & Bankruptcy Code.