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2017 (5) TMI 854 - AT - Insolvency and BankruptcyInsolvency resolution process - default in making the payment of operational debt - petitioner is an Operational Creditor within the meaning of Section 5(20) - period of limitation - Held that - A perusal of the paper book shows that the Operational Creditor has placed on record a copy of the demand notice dated 08.01.2017 (P/8). There is an affidavit filed by Mr. Sandeep Gupta that the aforesaid demand notice has not been responded to. It is further clear that the statement of accounts maintained by the Operational Creditor has also been placed on record along with the master data of the Corporate Debtor. The copies of the post dated cheques and the invoices showing the funds insufficient issued by the Bank dated 16.05.2014 (page 51), dated 23.06.2014 (page 53) have also been placed on record. Therefore, we find that the requirements of Section 9 are substantially fulfilled. The liability to pay has also not been disputed in view of the facts that the Operational Creditor had received seven post dated cheques in lieu of full and final settlement dated 21.01.2014 (page 57). We are further of the view that the claim is within the period of limitation of three years as the earliest cheque dishonoured is dated 15.03.2014 and the present petition was filed on 01.03.2017. We are of the view that it is a fit case for triggering the insolvency resolution process. Accordingly, we initiate the insolvency resolution process. As the interim resolution professional has not been named, we appoint Shri Vivek Goyal practicing Chartered Accountant (Mobile No. 98155-22553) who is duly registered with Insolvency Bankruptcy Board (IBBI/IPA-001/IP-00089/2016-17/1117). The provisional insolvency professional shall take immediate steps in terms of Section 14 as there would be a Moratorium on the Corporate Debtor. The insolvency resolution professional shall also take steps and perform his duties in terms of Section 15, 17 & 18.
Issues:
- Triggering insolvency resolution process under Section 9 of the Insolvency and Bankruptcy Code, 2016. - Determining operational debt owed by the respondent. - Analysis of the period of limitation for the claim. - Compliance with the requirements of Section 9(3) of the Code. - Appointment of an interim resolution professional. - Imposition of a moratorium on the Corporate Debtor. - Duties and responsibilities of the insolvency resolution professional. Issue 1: Triggering Insolvency Resolution Process: The petitioner sought to initiate insolvency proceedings against the respondent, claiming to be an 'Operational Creditor' under the Code. The respondent was alleged to have defaulted in making payments for completed projects, leading to the demand for insolvency resolution. Issue 2: Determining Operational Debt: The petitioner had completed various projects for the respondent, and post-dated cheques were issued for settlement. However, most cheques were dishonored, indicating a default in payment. The petitioner provided evidence of completed work orders and dishonored cheques to support the claim of operational debt. Issue 3: Analysis of Period of Limitation: The petitioner argued that the claim was within the limitation period, citing the issuance of post-dated cheques and subsequent dishonor as events that extended the limitation period. Legal precedents were referenced to support this argument, emphasizing the acknowledgment of liability through the issuance of cheques. Issue 4: Compliance with Section 9(3) Requirements: The Tribunal assessed the fulfillment of Section 9(3) obligations, which required specific documents to be submitted along with the petition. The petitioner provided invoices, affidavits, and financial institution certificates, demonstrating compliance with the statutory requirements. Issue 5: Appointment of Interim Resolution Professional: In the absence of a named interim resolution professional, the Tribunal appointed a qualified individual to oversee the insolvency resolution process. The professional was tasked with initiating necessary steps, including imposing a moratorium on the Corporate Debtor to protect its assets during the resolution process. Issue 6: Imposition of Moratorium: A moratorium was declared to prevent legal actions against the Corporate Debtor, ensuring the smooth progress of insolvency resolution. Essential goods and services supply to the Corporate Debtor was safeguarded during this period, with specific provisions outlined to guide the resolution process. Issue 7: Duties of the Insolvency Resolution Professional: The appointed professional was mandated to perform duties as per the relevant sections of the Code, including submitting reports within specified timelines. Cooperation from the Corporate Debtor's personnel, including promoters, was expected to facilitate the resolution process effectively. In conclusion, the Tribunal found merit in the petitioner's claims and initiated the insolvency resolution process, appointing an interim resolution professional to oversee the proceedings diligently. The decision encompassed legal compliance, protection of assets through a moratorium, and the efficient execution of resolution duties by the professional to achieve a successful resolution of the operational debt issue.
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