2018 (12) TMI 1048 - Tri - Insolvency and Bankruptcy

Corporate Insolvency Resolution Process (CIRP) - defaulted in making payment which is due for the cut and polished diamonds supplied by the Petitioner to the Corporate Debtor - Held that - Petitioner has attached the relevant tax invoices and bank certificate to show that no payment has been received from the Corporate Debtor except an amount of ₹7,450/- on 18.10.2017. The Petitioner has annexed the demand notice, sent to Corporate Debtor as per section 8 of Insolvency and Bankruptcy Code, 2016, the invoices against which it claims the outstanding amount from the Corporate Debtor as well as the Bank Statements to show that payment of the outstanding default amount is not received from the Corporate Debtor in the bank account of the Corporate Debtor. The Corporate Debtor has not raised any dispute regarding the unpaid operational debt. The application made by the Petitioner is complete in all respects as required by law and it clearly shows that the operational debt has not been paid as also confirmed by the Corporate Debtor in its reply to the demand notice. Therefore, there is a clear default on the part of the Corporate Debtor in payment of outstanding amount to the Petitioner, and there was no existing dispute regarding the same. On perusal of the pleadings and documents submitted and the arguments of the counsel appearing for both the sides, we are of the view that the present case is fit for Admission under the Insolvency and Bankruptcy Code, 2016. The petition filed under Section 9 of Insolvency and Bankruptcy Code, 2016 is admitted.

Summary

Issues:
1. Admitting a Company Petition under section 9 of the Insolvency & Bankruptcy Code, 2016.
2. Determining default in payment by the Corporate Debtor.
3. Evaluating completeness of the application and absence of dispute.
4. Declaring moratorium under section 14 of the I & B Code.

Admitting Company Petition:
The case involved a Company Petition filed under section 9 of the Insolvency & Bankruptcy Code, 2016 by an Operational Creditor against a Corporate Debtor for defaulting on a payment due for supplied diamonds. The petition included the demand notice, tax invoices, and bank statements to support the claim. The Corporate Debtor acknowledged the debt but cited financial difficulties. The Tribunal assessed the completeness of the application, absence of dispute, and the default in payment, ultimately admitting the petition as fit for the Insolvency and Bankruptcy Code.

Default in Payment:
The Corporate Debtor failed to dispute the unpaid operational debt, confirming the default in payment. The Petitioner provided necessary documentation, including the demand notice, invoices, and bank statements, to demonstrate the outstanding amount. The Tribunal found a clear default on the part of the Corporate Debtor, as no dispute existed regarding the payment. This non-payment led to the admission of the Company Petition under the Insolvency and Bankruptcy Code, 2016.

Completeness of Application and Absence of Dispute:
The Petitioner, a Partnership firm, submitted a comprehensive application with all required documents, including the affidavit, partnership deed, tax invoices, and bank certificate. The Corporate Debtor did not raise any dispute regarding the debt, further supporting the completeness of the application. The Tribunal verified that the application met all legal requirements, confirming the absence of a dispute and the non-payment, leading to the admission of the petition.

Moratorium Declaration:
Following the admission of the Company Petition, the Tribunal declared a moratorium under section 14 of the Insolvency and Bankruptcy Code. The moratorium included prohibitions on legal actions against the Corporate Debtor, asset transfers, and property recovery. Essential goods or services supply was to continue uninterrupted during the moratorium period. The order specified the duration of the moratorium and appointed an Interim Resolution Professional to oversee the corporate insolvency resolution process. Additionally, the public announcement of the resolution process was mandated, and communication of the order was directed to all relevant parties promptly.