2019 (7) TMI 219 - Tri - Insolvency and Bankruptcy

Admissibility of petition - Initiation of Corporate Insolvency Resolution Process - existence of Debt - HELD THAT - Applicant is an Operational Creditor within the meaning of sub-section (5) of Section 20 of the Code. From the aforesaid material on record petitioner is able to establish that there exists debt as well as occurrence of default. The Application filed by the Applicant is complete in all respects. Petition admitted - moratorium declared.

Summary

Issues:
1. Application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016.
2. Dispute regarding outstanding payment between operational creditor and corporate debtor.
3. Appointment of Interim Insolvency Professional.
4. Declaration of moratorium and initiation of Corporate Insolvency Resolution Process.

Analysis:
1. The application was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 by the operational creditor, seeking recovery of outstanding dues from the corporate debtor. The applicant, engaged in the supply of electric and electronic items, provided goods to the respondent company, which failed to clear the outstanding amount of ?1,60,000 despite admission of the debt and repeated reminders.

2. The respondent, facing financial crisis, admitted the debt but claimed inability to pay. The applicant submitted necessary documents supporting the claim, including affidavits, invoices, delivery challans, and a demand notice. The respondent's affidavit in reply acknowledged the debt, establishing the existence of debt and default, thus meeting the requirements under the Code.

3. The Adjudicating Authority appointed an Interim Insolvency Professional as proposed by the operational creditor. Mr. Nitin Hasmukhlal Parikh was appointed to act as an interim resolution professional under Section 13(1)(c) of the Code, with specific directives to initiate the Corporate Insolvency Resolution Process.

4. The Adjudicating Authority, after considering the material on record, found it appropriate to admit the application under Section 9(5)(1) of the Code. Consequently, a moratorium was declared to prohibit various actions against the corporate debtor, including suits, asset disposal, and recovery of property. The order specified the effect and duration of the moratorium until the completion of the insolvency resolution process or liquidation, as per the Code's provisions.

In conclusion, the petition was admitted, and the moratorium was declared, ensuring the protection of the corporate debtor's assets and facilitating the resolution process. The order was communicated to all relevant parties, marking the disposal of the petition without any costs awarded.