2018 (12) TMI 741 - Tri - Insolvency and Bankruptcy

Corporate insolvency process - claim as made by the Operational Creditor - Held that - The records as well as the statements made by the Corporate Debtor based on affidavit that it is unable to satisfy the claim as made by the Operational Creditor, this petition stands admitted as envisaged by Section 9 of the IBC, 2016 as against the Corporate Debtor. Moratorium in terms of Section 14 of IBC, 2016 will commence from the date of this order admitting the petition and the proposed Interim Resolution Professional (IRP) proposed by the Operational Creditor, namely, Miss. Sarita Duck with Registration No. as noted above is appointed as an Interim Resolution Professional (IRP) to commence and carry forward the CIRP against the Corporate Debtor. In terms of Section 17 of IBC, 2016, the powers of the Board of Directors of the Corporate Debtor shall stand suspended and the IRP appointed by this Tribunal as proposed by the Operational Creditor will take charge of affairs of the Company henceforth. In terms of Section 19 of IBC, 2016, the Board of Directors of the Corporate Debtor whose powers stands suspended as well as its personnel shall fully co-operate with the IRP appointed herein and due co-operation shall also be extended to the IRP by the employees, associates and professionals rendering their service to the Corporate Debtor. IRP to exercise the powers within the confines of IBC, 2016 and shall perform all duties as behoved upon IRP under the provisions of IBC, 2016 as well as all attendant rules and regulations, without any let and shall also file the status report in relation to the progress of the CIRP of the Corporate Debtor. A copy of this order shall be duly communicated to the Operational Creditor, Corporate Debtor as well as to learned IRP, namely, Miss Sarita Duck at the earliest not later than three days from today.

Summary

Issues:
1. Application filed under Section 9 of the Insolvency and Bankruptcy Code by Operational Creditor against Corporate Debtor.
2. Claim amount arising from Selling Agent Agreement.
3. Failure of Corporate Debtor to pay the claimed amount leading to initiation of Corporate Insolvency Resolution Process.
4. Transfer of the matter from NCLT New Delhi to NCLT Jaipur Bench.
5. Representation by Corporate Debtor stating inability to pay the claim.
6. Appointment of Interim Resolution Professional (IRP) and suspension of powers of the Board of Directors.

Analysis:
1. The application was filed under Section 9 of the Insolvency and Bankruptcy Code by the Operational Creditor against the Corporate Debtor, claiming a total amount of ?10,08,037. The claim arose from a Selling Agent Agreement between the parties, where the Operational Creditor was entitled to a commission for selling properties developed by the Corporate Debtor. Despite repeated reminders and a Notice of Demand, the Corporate Debtor failed to pay the outstanding amount, leading to the initiation of the Corporate Insolvency Resolution Process.

2. The matter was originally filed before NCLT New Delhi but was transferred to NCLT Jaipur Bench. The Corporate Debtor represented its inability to pay the claim, following which the Tribunal directed the Corporate Debtor to submit provisional financial statements. The case was heard, and it was established that the Corporate Debtor could not contest the claim, leading to the admission of the petition under Section 9 of the IBC.

3. The Operational Creditor proposed the name of an Interim Resolution Professional (IRP) in the application. The proposed IRP was appointed, and the powers of the Board of Directors of the Corporate Debtor were suspended. The IRP was tasked with managing the affairs of the company and ensuring the progress of the Corporate Insolvency Resolution Process. The Board of Directors and personnel of the Corporate Debtor were required to cooperate fully with the IRP as per the provisions of the IBC.

In conclusion, the Tribunal admitted the application, initiating the Corporate Insolvency Resolution Process against the Corporate Debtor. The appointment of the IRP marked the beginning of the process, with the suspension of the powers of the Board of Directors and the requirement of full cooperation from the Corporate Debtor's personnel.