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2019 (7) TMI 1022 - Tri - Insolvency and BankruptcyAdmissibility of petition - initiation of Corporate Insolvency Resolution Process - Section 9 of the Insolvency and Bankruptcy Code, 2016 - default in repayment of operational debt - Existence of debt and default or not - HELD THAT - On perusal of the documents it is found that operational debt is due to the Applicant and in support of that operational creditor has annexed invoices as per the details given in preceding para No. 5. 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, 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 - it is a fit case to initiate Insolvency Resolution Process by admitting the Application under Section 9(5)(1) of the Code. Petition admitted - moratorium declared.
Issues Involved:
1. Application filed by the operational creditor under Section 9 of the Insolvency and Bankruptcy Code, 2016. 2. Existence of operational debt and default by the corporate debtor. 3. Appointment of an interim insolvency professional. 4. Declaration of moratorium and initiation of the insolvency resolution process. Analysis: Issue 1: Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 The application was filed by the operational creditor, seeking recovery of an outstanding amount from the corporate debtor. The operational creditor, engaged in the distribution of IT products, claimed that the corporate debtor owed a significant sum towards multiple invoices. The applicant followed the due process of issuing demand notices and initiating legal actions as per the Insolvency and Bankruptcy Code. Issue 2: Existence of Operational Debt and Default The applicant presented detailed evidence, including invoices and communication records, to establish the existence of operational debt owed by the corporate debtor. The total outstanding amount, including interest, was clearly outlined in the submissions. The corporate debtor admitted to the liability but failed to make full payment, leading to the demand for the outstanding amount and subsequent legal actions. Issue 3: Appointment of Interim Insolvency Professional The Adjudicating Authority appointed an interim insolvency professional to oversee the resolution process. The professional was tasked with managing the proceedings, making public announcements, and calling for submission of claims as per the provisions of the Insolvency and Bankruptcy Code. The appointment was made in accordance with the requirements of Section 13 of the Code. Issue 4: Declaration of Moratorium and Insolvency Resolution Process After thorough examination of the evidence and legal provisions, the Adjudicating Authority found it appropriate to initiate the insolvency resolution process. The petition was admitted, and a moratorium was declared to prevent any actions against the corporate debtor during the resolution process. Specific restrictions were imposed, and essential services to the corporate debtor were ensured to continue during the moratorium period. In conclusion, the application was admitted, and the insolvency resolution process was initiated with the appointment of an interim insolvency professional. The declaration of moratorium aimed to facilitate the resolution process and protect the interests of all parties involved. The judgment highlighted the procedural compliance and legal steps taken to address the operational debt issue effectively.
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