2019 (4) TMI 1357 - Tri - Insolvency and Bankruptcy

Initiation of Corporate Insolvency Resolution Process - section 9 of Insolvency and Bankruptcy Code, 2016 read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 - Corporate Debtor - maintainability of application - HELD THAT - The Applicant has filed an affidavit affirming that in respect of the amount claimed or any part thereof, the Applicant has not received nor had any person, on its behalf had received in any manner the amount due to them as required u/s. 9(3)(c) of I B Code nor has received any notice of dispute raised by the corporate debtor under section 9(3)(b) of the IBC, 2016 - As on date, a total sum of ₹ 3,39,750/- along with 18% interest is due from the Corporate Debtor. The debt occurred on account of services provided by the operational creditor under the Brokerage Agreement. The registered office of corporate debtor is situated in Delhi and therefore this Tribunal has jurisdiction to entertain and try this application - The default occurred from 09.08.2018, hence the debt is not time barred and the application is filed within the period of limitation. The present application is complete and the Applicant is entitled to claim its dues, which remain uncontroverted by the Corporate Debtor, establishing the default in payment of the operational debt beyond doubt. In the light of above facts and records, the present application is admitted. The Application stands admitted in terms of Section 9(5) of IBC, 2016.

Summary

Issues:
- Application under section 9 of Insolvency and Bankruptcy Code, 2016 for Corporate Insolvency process initiation against a private limited company.
- Dispute over outstanding dues under a Brokerage Agreement.
- Failure of the Corporate Debtor to pay the operational debt leading to the initiation of insolvency proceedings.
- Appointment of Interim Resolution Professional (IRP) and implications of moratorium under Section 14(1) of the Code.

Analysis:
1. The application was filed under section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency process against the Corporate Debtor, a private limited company. The Applicant, a broker in real estate, entered into a Brokerage Agreement with the Corporate Debtor for revenue sharing, with the Corporate Debtor failing to renew the agreement after accruing an outstanding amount of ?3,60,000.

2. Despite several requests and a legal notice demanding payment, the Corporate Debtor admitted its liability but cited financial stress for non-payment. The Operational Creditor issued a demand notice under section 8 of the Code, which remained unanswered by the Corporate Debtor, leading to the filing of the present application under section 9 of the IBC, 2016.

3. The Applicant affirmed the non-receipt of the outstanding amount and any notice of dispute from the Corporate Debtor, establishing the debt of ?3,39,750 along with 18% interest. The Corporate Debtor's failure to respond or appear in the proceedings resulted in an ex-parte hearing, where the Tribunal found the application complete and admitted it.

4. The Tribunal noted that the default was not time-barred, as the debt occurred post the agreement's tenure, and the application was within the limitation period. Consequently, the Tribunal admitted the application, appointing an Interim Resolution Professional (IRP) subject to certain conditions, and imposed a moratorium under Section 14(1) of the IBC, 2016, prohibiting certain actions by the Respondent during the moratorium period.

5. The order of admission was communicated to the Applicant, Corporate Debtor, and the IRP, with a copy forwarded to the Insolvency and Bankruptcy Board of India for records. The implications of the moratorium under Sections 14(2) to 14(4) of the Code were highlighted, ensuring the due process following the initiation of insolvency proceedings.