2017 (7) TMI 146 - Tri - Insolvency and Bankruptcy

Enforcement of provisions of Insolvency and Bankruptcy Code, 2016 - Held that - Operational Creditor has been able to show that the Operational Debtor owes the operational debt to it and there is a default committed by the operational debtor. The application satisfied all the requirements of the Code and the Rules framed there under. The application is admitted. As no insolvency professional has been proposed by the Operational Creditor a reference is made to the Insolvency and Bankruptcy Board of India in term of Section 16 (4) of the Code for appointment of Interim Resolution Professional. Admission a declaration of moratorium is given in terms of Section 13(1) of the Code. The Interim Insolvency Professional shall comply with the provisions of Sections 13(2), 14, 15, 17 & 18 etc. of the Code. The directors of the Corporate Debtor, its promoters or any person associated with the Management of the Corporate Debtor is expected to extend all assistance and cooperation to the Interim Resolution Professional as stipulated by Sections 19 and 20 etc of the Code.

Issues:
Transfer of petitions from High Court to National Company Law Tribunal under Insolvency and Bankruptcy Code, 2016; Compliance with Companies (Transfer of Pending Proceedings) Rules, 2016; Service of notice to respondent; Unpaid operational debt under Companies Act, 1956; Requirements for filing petition under Insolvency and Bankruptcy Code, 2016; Default amount and compliance with Code provisions; Admission of application and appointment of Interim Resolution Professional.

Transfer of Petitions:
The petition was originally filed in the High Court of Delhi under specific sections of the Companies Act, 1956. Due to the enforcement of the Insolvency and Bankruptcy Code, 2016, the National Company Law Tribunal was designated as the Adjudicating Authority. All pending petitions were transferred to the Tribunal in accordance with the Transfer Rules.

Compliance with Transfer Rules:
The 'Operational Creditor' was required to comply with the Companies (Transfer of Pending Proceedings) Rules, 2016. The petition relating to winding up under section 433 of the Companies Act, 1956 was transferred to the Tribunal. The applicant had to provide all necessary information for admission of the petition under the Insolvency and Bankruptcy Code within the specified timeline.

Service of Notice:
Efforts were made to serve notice to the respondent through various methods like email, hand delivery, and WhatsApp. Despite being served, the respondent did not participate in the proceedings, leading to the case being proceeded ex parte.

Unpaid Operational Debt:
The applicant company supplied goods to the respondent company, and invoices were raised for the same. The respondent failed to pay a significant amount owed, leading to the initiation of legal proceedings. The respondent's cheques were returned unpaid, indicating a default in payment.

Requirements for Filing under Insolvency and Bankruptcy Code:
The applicant complied with all requirements of the Insolvency and Bankruptcy Code, including issuing a demand notice and filing necessary affidavits. The operational debt owed by the respondent was established, meeting the minimum default amount required for filing the petition.

Admission of Application:
The Tribunal admitted the application as the Operational Creditor fulfilled all requirements of the Code. A reference was made to the Insolvency and Bankruptcy Board of India for the appointment of an Interim Resolution Professional.

Appointment of Interim Resolution Professional:
A declaration of moratorium was issued, and the Interim Resolution Professional was tasked with complying with relevant provisions of the Code. The directors and management of the Corporate Debtor were instructed to cooperate with the Interim Resolution Professional.

In conclusion, the petition was admitted, and the necessary steps were taken for the resolution process under the Insolvency and Bankruptcy Code, 2016.

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