2018 (2) TMI 2076 - 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 - This Adjudicating Authority is satisfied that the petitioner has proved by placing overwhelming evidence that default has occurred which the Corporate Debtor was responsible to pay. In relation to the laches as pointed out respondent in his counter, it is pertinent to mention that the petitioner has established clearly that the amount in default is genuine and is supported by the documentary evidence placed - the said objection is not a valid ground of rejection of the instant petition. Application admitted - moratorium declared.

Summary

Issues:
1. Company Petition under section 9 of the Insolvency and Bankruptcy Code 2016.
2. Transfer of liability from one company to another.
3. Default in payment of operational debt.
4. Admissibility of the petition.
5. Appointment of Interim Resolution Professional.
6. Declaration of moratorium.
7. Compliance with the provisions of the Insolvency and Bankruptcy Code.

Analysis:
1. The case involved a Company Petition filed by an Operational Creditor against a Corporate Debtor under section 9 of the Insolvency and Bankruptcy Code 2016. The petition was based on a High Sea Sale Agreement for the sale of Indonesian coal, where the Corporate Debtor failed to make full payment, resulting in a default of over Rs. 6 crores. The Operational Creditor sent a Demand Notice as per the provisions of the Code, but the Corporate Debtor did not respond, leading to the filing of the petition.

2. The liability of the Corporate Debtor arose from a transfer made by another company, and the Adjudicating Authority determined that the petition against the transferring company was not maintainable. This led to the withdrawal of one of the petitions by the Operational Creditor.

3. The Corporate Debtor contested the petition, claiming that the coal supplied was substandard. However, the Adjudicating Authority found overwhelming evidence presented by the Operational Creditor, proving the default and the authenticity of the debt. The objections raised by the Corporate Debtor were dismissed, and the petition was admitted.

4. Following the admission of the petition, the Adjudicating Authority ordered the commencement of the Corporate Insolvency Resolution Process, appointing an Interim Resolution Professional to manage the affairs of the Corporate Debtor. The moratorium was declared, prohibiting various actions against the Corporate Debtor.

5. The Interim Resolution Professional was directed to comply with the provisions of the Code, protect the assets of the Corporate Debtor, and perform duties as per the requirements of the Code. The directors and other associated persons were instructed to cooperate with the IRP.

6. The Registry was directed to communicate the order to all relevant parties, and the address details of the appointed IRP were provided for further communication and compliance. The entire process was conducted in adherence to the provisions of the Insolvency and Bankruptcy Code 2016.