2017 (8) TMI 1655 - Tri - Insolvency and Bankruptcy

Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT - The petitioner is the Operational Creditor who has initiated Insolvency Resolution Process against the Respondent No.1 Company under Section 9 of the Insolvency Bankruptcy Code. The counsel for impleading respondent reported no objection. There is no objection filed from the Company. Since the petitioner/Operational Creditor has furnished all information required for initiating Insolvency Resolution Process against the Respondent-1 Company, this Bench is satisfied that the corporate debtor failed to discharge the liability mentioned in this Company Petition filed by the operational creditor under section 9 of Insolvency and Bankruptcy Code, 2016 resulting occurrence of default for an amount of ₹ 1,18,34,618.66/-, this Bench admits this Petition under section 9 of Insolvency and Bankruptcy Code, 2016 declaring moratorium - Petition admitted.

Summary

Issues:
1. Initiation of Insolvency Resolution Process under Section 9 of the Insolvency & Bankruptcy Code.
2. Failure of the Respondent Company to file objections.
3. Appointment of Interim Resolution Professional.
4. Declaration of moratorium and related directions.

Issue 1: Initiation of Insolvency Resolution Process under Section 9 of the Insolvency & Bankruptcy Code

The petitioner, an Operational Creditor, filed a petition under Section 9 of the Insolvency & Bankruptcy Code against the Respondent Company. The Respondent Company failed to file objections despite multiple opportunities given by the Tribunal. The Hon'ble High Court directed the Tribunal to dispose of the matter within a specified timeframe. The petitioner provided all necessary information for initiating the Insolvency Resolution Process, and the Tribunal found that the corporate debtor had failed to discharge its liability, resulting in a default amounting to ?1,18,34,618.66. Consequently, the Tribunal admitted the petition, declaring a moratorium under Section 14 of the Code.

Issue 2: Failure of the Respondent Company to file objections

Despite being given multiple opportunities, the Respondent Company, Falcon Tyres Ltd., failed to file objections to the petition. The Tribunal recorded that the objections were not filed and proceeded with the case based on the petitioner's submissions. The lack of objections from the Respondent Company contributed to the Tribunal's decision to admit the petition and declare a moratorium.

Issue 3: Appointment of Interim Resolution Professional

The Tribunal appointed Mr. Anand Ramachandra Bhat as the Interim Resolution Professional (IRP) in the case. The petitioner had named Mr. Bhat for this role, and the Tribunal found the appointment appropriate based on the information provided. Mr. Bhat's responsibilities as the IRP include carrying out functions as specified under the Insolvency & Bankruptcy Code.

Issue 4: Declaration of moratorium and related directions

Upon admitting the petition, the Tribunal issued several directions related to the moratorium. These included prohibiting the institution or continuation of suits against the corporate debtor, ensuring the supply of essential goods or services is not interrupted, and specifying the effect of the moratorium until the completion of the insolvency resolution process or liquidation of the corporate debtor. The Tribunal also mandated the immediate public announcement of the corporate insolvency resolution process as per the Code's requirements.

In conclusion, the Tribunal admitted the petition for initiating the Insolvency Resolution Process, citing the Respondent Company's failure to discharge its liability. The appointment of the IRP, declaration of a moratorium, and issuance of related directions were pivotal in ensuring the orderly resolution of the insolvency proceedings as per the provisions of the Insolvency & Bankruptcy Code.