2017 (12) TMI 972 - Tri - Insolvency and Bankruptcy

Corporate Insolvency Resolution Process - Held that - To initiate the present proceedings, the Operational Creditor has issued notice under Section 8(1) of the Code. The same was not replied to. Due Compliance of the mandatory provisions of Section 9(3) (a) (b) (c) has been made. The Operational Creditor has filed the statement of its ledger accounts reflecting the debit and credit balances as well as the annual balance confirmation statement by the Corporate Debtor. The balance of as ₹ 5,55,14,360/- has been duly confirmed by the Corporate Debtor. The certificate by the Operational Creditor s Banker has also been filed in compliance of Section 9(3)(c) of the Code certifying that the last payment of ₹ 6,56,730/- received from the Mahindra AMP Mahindra FIN Services Ltd and Mahindra Mahindra FIN in the account of the Operational Creditor was on 16.05.2017. On notice being served on the Corporate Debtor, Mr. Vikrant Mahajan, Director of the Respondent Corporate Debtor appeared in person. He did not wish to file his reply nor contest the prayer made in the petition. Infact he admitted the amount due to the petitioner but submitted that since the Corporate Debtor has not been in business for the last 2 years, he is unable to liquidate his financial debt. In view of the admission made on behalf of the Corporate Debtor and having complied with all other requirements under the Code, there is no impediment in admitting the petition.

Summary

Issues involved:
Initiation of Corporate Insolvency Resolution Process under Section 9 of the Insolvency and Bankruptcy Code, 2016.

Analysis:
The petitioner, claiming to be an Operational Creditor, filed a petition seeking initiation of Corporate Insolvency Resolution Process against the Respondent Corporate Debtor for non-payment of goods supplied. The Operational Creditor invoiced a total sum of ?9,26,22,218 from July 2014 to May 2017, with a remaining outstanding liability of ?5,55,14,360. The petition was filed under Section 9 of the Code, following compliance with mandatory provisions, including notice issuance under Section 8(1) and submission of ledger accounts and balance confirmation statements. The Corporate Debtor, upon notice, admitted the amount due but cited inability to liquidate the financial debt due to business inactivity for the past 2 years.

Implications of Admission:
The Director of the Corporate Debtor, upon appearance, admitted the debt owed to the petitioner and did not contest the petition. With compliance with all requirements under the Code, including confirmation of the outstanding liability, the admission by the Corporate Debtor led to the petition being admitted by the Tribunal. Consequently, a moratorium was imposed under Section 14 of the Code, prohibiting various actions against the Corporate Debtor, including suits, asset disposal, and recovery actions.

Appointment of IRP:
The petitioner proposed Nirmal Kumar Bhesoni as the Interim Resolution Professional (IRP) for the case, who consented to the appointment and confirmed no disciplinary proceedings against him. The Tribunal confirmed Mr. Bhesoni as the IRP and directed him to undertake necessary steps under Sections 15, 17, and 18 of the Code, including convening the Committee of Creditors (COC) meeting and submitting a report within 30 days.

Next Hearing:
The case was scheduled to come up for further proceedings on 20th November 2017, indicating the timeline for the IRP to carry out the necessary actions as per the Code.