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2019 (7) TMI 787 - Tri - Insolvency and BankruptcyAdmissibility of petition - Initiation of Corporate Insolvency Resolution Process - Section 9 of the Insolvency and Bankruptcy Code, 2016 - service of notice - HELD THAT - On perusal of the record it is found that the registry has also issued notice to corporate debtor twice i.e. on 29.01.2019 and 19.03.2019 and as per track report the notice was delivered on 04.02.2019. As such service upon the corporate debtor is complete. The records available shows that the amount due to the Applicant from the Respondent is in respect of Service provided to the respondent. Therefore, the amount claimed by the Applicant from the Respondent is operational debt within the meaning of Section 5, sub-section (21) of the Code. The operational debt is due to the Applicant. Therefore, Applicant is an Operational Creditor within the meaning of sub-section (5) of Section 20 of the Code. From the aforesaid material on record, it is established that there exists debt as well as there is occurrence of default. The Application filed by the Applicant is complete in all respects - petition admitted - moratorium declared.
Issues:
1. Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 filed by operational creditor. 2. Claim of operational debt due to non-payment by the respondent company. 3. Appointment of Interim Insolvency Resolution Professional and declaration of moratorium. Issue 1: Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 filed by operational creditor The applicant, a proprietor of an operational creditor engaged in outdoor advertisement, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016. The respondent company had taken advertisement spaces for its water park/amusement park and placed orders for advertising hoardings in various locations in Gujarat. Despite repeated demands and issuance of notices, the respondent failed to clear the outstanding amount, leading to the applicant filing the insolvency application. The applicant provided evidence of the debt, including invoices, notices, and bank statements, to support the claim. Issue 2: Claim of operational debt due to non-payment by the respondent company The Tribunal found that the respondent had admitted the debt but failed to make payments, with issued cheques being returned due to insufficient funds or closed accounts. The Tribunal determined that the amount claimed by the applicant constituted operational debt under the Code, as it was for services provided to the respondent. The records showed the existence of the debt and default by the respondent, establishing the applicant as an operational creditor entitled to seek resolution under the Code. Issue 3: Appointment of Interim Insolvency Resolution Professional and declaration of moratorium The Tribunal, after finding the application complete and the notice received by the respondent, initiated the insolvency resolution process. Mr. Kiran C. Shah was appointed as the Interim Insolvency Resolution Professional. The Tribunal declared a moratorium, prohibiting various actions against the corporate debtor, and directed the Insolvency Resolution Professional to make a public announcement of the initiation of the corporate insolvency process. The order of moratorium was to remain in effect until the completion of the insolvency resolution process or until further orders. In conclusion, the Tribunal admitted the petition, appointed an Interim Insolvency Resolution Professional, and declared a moratorium to facilitate the resolution of the operational debt issue between the parties. The decision aimed to protect the interests of the creditors and ensure a structured process for resolving the financial obligations of the corporate debtor.
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