2019 (8) TMI 1813 - Tri - Insolvency and Bankruptcy

Maintainability 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 - As per the directions of this Bench, the Applicant duly served court notice to the Respondent on 22.12.2018, and the same was received by the Corporate Debtor on 24.12.2018. The affidavit of service of the petition is filed on 04.01.2019 with this Bench. But the Corporate Debtor chose not to make any representation before this Tribunal. No objection has been raised by the Corporate Debtor to date, despite service of Court Notice and after providing ample opportunities. On perusal of the documents submitted by the Applicant, it is clear that debt amounting to ₹7,00,020/- is due and payable by the Corporate Debtor to the Applicant against the invoice dated 21.11.2015 for goods supplied. The outstanding debt is acknowledged by the Corporate Debtor vide its email dated 24.02.2016 by assuring to clear the due amount by the end of the month. Further, the Corporate Debtor has marked its appearance through its counsel but did not file an objection against admission of this application. The outstanding amount that is admittedly in default is more than ₹1,00,000/-. The Application under section Section 9 of I B Code, 2016 filed by the Operational creditor for initiation of CIRP in prescribed Form No.5, as per the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 is complete. The existing operational debt of more than rupees one lakh against the corporate debtor and its default is also proved. Accordingly, the petition filed under section 9 of the Insolvency and Bankruptcy Code for initiation of corporate insolvency resolution process against the corporate debtor deserves to be admitted. Petition admitted - moratorium declared.

Summary

Issues:
1. Application under section 9 of Insolvency & Bankruptcy Code, 2016 for initiating Corporate Insolvency Resolution Process (CIRP).
2. Default in payment by Corporate Debtor to Operational Creditor.
3. Compliance with procedural requirements under the I&B Code.
4. Appointment of Interim Resolution Professional.
5. Declaration of moratorium and consequential directions.

Analysis:
1. The application (CP 3641/2018) was filed by the Operational Creditor against the Corporate Debtor under section 9 of the Insolvency & Bankruptcy Code, 2016, seeking initiation of CIRP. The debt of ?7,00,020 was claimed by the Applicant for transformer lamination supplied to the Corporate Debtor, supported by invoices and communication evidences.

2. The Applicant proved the default in payment by the Corporate Debtor through documents like demand notices, email conversations, and bank statements. Despite acknowledging the debt and assuring payment, the Corporate Debtor failed to clear the outstanding amount, justifying the initiation of CIRP.

3. The Applicant complied with the procedural requirements of the I&B Code, including filing necessary affidavits, serving court notices, and demonstrating that the Corporate Debtor did not raise any objections or disputes regarding the debt. The Bench found the application complete and admitted it for further proceedings.

4. The Bench noted that the Applicant did not propose the name of a registered Insolvency Resolution Professional (IRP) for appointment. Consequently, the Bench appointed Mr. Laxman Digambar Pawar as the Interim Resolution Professional to carry out the functions as per the I&B Code, ensuring compliance with IBBI regulations regarding the fee payable to IRP/RP.

5. The Bench declared a moratorium under section 14 of the I&B Code, prohibiting various actions against the Corporate Debtor, ensuring continuity of essential supplies, and specifying the effect of the moratorium until the completion of the resolution process or liquidation. The public announcement of the insolvency resolution process was ordered, and the Registry was directed to communicate the order promptly to all relevant parties.

This detailed analysis of the judgment highlights the key issues addressed by the Tribunal, including the application for CIRP, default in payment, procedural compliance, appointment of IRP, and the declaration of moratorium with consequential directions.