2017 (10) TMI 298 - Tri - Insolvency and Bankruptcy

Corporate Insolvency Resolution Process - Insolvency and Bankruptcy Code, 2016 - Held that - The Application is complete in all respects. The material placed on record clearly establish that Respondent/Corporate Debtor committed default in repayment of operational debt due to the Applicant Company. Respondent Company also did not raise any dispute regarding the existence of operational debt, quality of goods supplied etc. In view of the above discussion, the Application deserves to be admitted and it is accordingly admitted under Section 9(5)(i) of the Code. This Adjudicating Authority hereby appoint Shri Parag Sheth, as Interim Insolvency Resolution Professional having address at 404, Sachet-2, Opp GLS University, Maradia Plaza, C.G. Road, Ahmedabad-380006 and having Registration No. IBBI/IPA-002/IP- N00142/2017-18/10381 under Section 13(1)(c) of the Code. The Interim Insolvency Resolution Professional is hereby directed to cause public announcement of the initiation of Corporate Insolvency Resolution Process and call for submission of claims under Section 13(l)(b) read with Section 15 of the Code and Regulation 6 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. This Adjudicating Authority hereby order moratorium under Section 13(l)(a) of the IB Code prohibiting the following as referred to in Section 14 of the Code

Issues:
- Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 for Corporate Insolvency Resolution Process initiation.
- Determination of operational debt and corporate debtor relationship.
- Compliance with Section 9(b) and 9(c) of the Code.
- Appointment of Interim Resolution Professional.
- Admittance of the Application under Section 9(5)(i) of the Code.
- Order of moratorium under Section 13(l)(a) of the IB Code.

Analysis:
1. The Applicant, a company registered under the Companies Act, filed an Application under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate a Corporate Insolvency Resolution Process against the Respondent, treating it as a Corporate Debtor. The Applicant alleged that the Respondent owed an operational debt of ?3,84,760 for the supply of Iron Ore Lumps, supported by relevant documents and a Demand Notice served on the Respondent.

2. The Tribunal examined the documents provided, including the Invoice, Ledger Account, Bank Statements, and the Section 9(c) Certificate issued by the Bank. It was established that the Respondent owed the Applicant the aforementioned amount, qualifying as an operational debt under the Code. The Applicant was deemed an Operational Creditor, and the Respondent, being a Company, was identified as the Corporate Debtor.

3. After hearing arguments from both parties, where the Respondent acknowledged the debt and the completeness of the Applicant's Written Communication, the Tribunal found that the Application was complete and that the Respondent had defaulted in repaying the operational debt without raising any disputes regarding the debt or the goods supplied.

4. Consequently, the Tribunal admitted the Application under Section 9(5)(i) of the Code and appointed an Interim Insolvency Resolution Professional. The appointed professional was tasked with initiating the Corporate Insolvency Resolution Process, calling for claim submissions, and causing a public announcement as per the relevant regulations.

5. Additionally, the Tribunal ordered a moratorium under Section 13(l)(a) of the IB Code, prohibiting certain actions against the Corporate Debtor, with exceptions for essential goods or services supply and transactions notified by the Central Government. The moratorium was to be in effect until the completion of the Corporate Insolvency Resolution Process, subject to specified provisions.

6. The Application was disposed of without any orders as to costs, with directions to communicate the order to all relevant parties involved, including the Applicant, the Respondent, and the appointed Interim Insolvency Resolution Professional.

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