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2019 (1) TMI 1943 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT - The Corporate-Debtor, in compliance of the stated directions; has furnished its affidavit dated 22.06.2018 making statement on its net-worth as on 31.03.2018. As per the same, the company is in loss of ₹ 437.75 lakhs. It has also furnished the details of it loan availed by the company from Secure and Unsecured creditors and payments due to the operational and sundry creditors, which aggregating to amount of ₹ 44,50,70,942/-; while the company has availed secured loan of ₹ 18,44,19,078/-. It may be seen that the company duly admits about its financial position through its affidavit dated 02.06.2018 stating categorically that, it is facing financial difficulties and now unable to pay its creditors including the operational creditors including the present petitioner the amount due to it. Hence, the present case is fit to initiate the Corporate-Insolvency-Resolution-Process in respect of Corporate-Debtor-Company under Section 9 of the Insolvency and Bankruptcy Code provided if the present application filed by the Operational-Creditor is otherwise found incomplete. The present application is found complete in terms of provision of Section 9 of the IB Code read with relevant Rules of Insolvency and Bankruptcy Application to the Adjudicating Authority Rule, 2016 and hence, the present petition deserves to be admitted for initiation of Corporate Insolvency Resolution Process in respect of Corporate Debtor Company with orders and directions issued. Petition admitted - moratorium declared.
Issues:
- Initiation of Corporate Insolvency Resolution Process under Section 9 of the Insolvency and Bankruptcy Code, 2016. - Default in payment by the Corporate Debtor to the Operational Creditor. - Filing of demand notice and response by the Corporate Debtor. - Financial difficulties faced by the Corporate Debtor. - Completeness of the application under Section 9 of the IB Code. - Orders and directions for moratorium and appointment of Interim Resolution Professional. Initiation of Corporate Insolvency Resolution Process: The petition was filed by the Operational Creditor seeking initiation of Corporate Insolvency Resolution Process against the Corporate Debtor, M/s. Swastik Seracon Limited, under Section 9 of the Insolvency and Bankruptcy Code, 2016. The Operational Creditor alleged non-payment of dues amounting to &8377; 46,36,165/- by the Corporate Debtor for goods supplied between April 2017 to August 2017. The demand notice was duly served to the Corporate Debtor, and no objection or reply was received regarding the unpaid debts, leading to the filing of the petition. Default in Payment and Financial Difficulties: The Corporate Debtor, in response, admitted to facing financial difficulties and being unable to pay its creditors, including the Operational Creditor. The Corporate Debtor expressed implied no objection to initiating the Corporate Insolvency Resolution Process. Details of the Corporate Debtor's financial position, including losses and outstanding debts, were provided, indicating its inability to meet its financial obligations. Filing of Demand Notice and Response: The Operational Creditor issued a demand notice to the Corporate Debtor, which was duly served, but no response or objection was raised by the Corporate Debtor regarding the unpaid operational debts. The Corporate Debtor's affidavit confirmed its financial difficulties and inability to pay its dues, implying a lack of objection to the initiation of the insolvency process. Completeness of the Application: After examining the petition and supporting documents, the court found the application complete under Section 9 of the IB Code. The application was filed within the limitation period, signed by the Operational Creditor's proprietor, and included necessary details and declarations, making it eligible for admission to initiate the Corporate Insolvency Resolution Process. Orders and Directions for Moratorium and Appointment of Interim Resolution Professional: The Adjudicating Authority ordered a moratorium prohibiting various actions against the Corporate Debtor, appointed an Interim Resolution Professional, and directed the supply of essential goods or services to continue during the moratorium period. The moratorium was to be in effect until the completion of the corporate insolvency resolution process, with specific directions issued for compliance and communication of the order. In conclusion, the judgment admitted the Insolvency Petition, established a moratorium, appointed an Interim Resolution Professional, and provided detailed orders and directions for the initiation of the Corporate Insolvency Resolution Process in the case of non-payment by the Corporate Debtor to the Operational Creditor.
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