2019 (7) TMI 1466 - Tri - Insolvency and Bankruptcy

Maintainability of application - Initiation of Corporate Insolvency Resolution Process - Corporate Debtor committed default in making payment - Section 9 of Insolvency and Bankruptcy Code read with Rule 6 of Insolvency Bankruptcy (Application to Adjudicating Authority)Rules, 2016 - HELD THAT - This Bench on hearing the petitioner and after going through the documents annexed to the petition is of the view that the Corporate Debtor is liable to pay the amount claimed in the petition and defaulted in making the payment - This Bench having been satisfied with the Petition filed by the Operational Creditor which is in compliance of provisions of section 9 of the Insolvency and Bankruptcy Code admits this Petition declaring moratorium. Petition admitted.

Issues:
1. Petition filed by Ultratech Cement Limited seeking Corporate Insolvency Resolution Process against Silveroak Commercials Limited for default in payment.
2. Allegation of default in payment amounting to ?37,91,750 inclusive of interest.
3. Dishonored cheques issued by Corporate Debtor.
4. Demand notice issued by Petitioner and no response from Corporate Debtor.
5. Lack of representation from Corporate Debtor despite publication of petition.
6. Tribunal's decision on the liability of the Corporate Debtor.
7. Admission of the petition and declaration of moratorium with specific directions.

Analysis:
1. The petition was filed by Ultratech Cement Limited to initiate the Corporate Insolvency Resolution Process against Silveroak Commercials Limited due to an alleged default in payment. The Petitioner claimed that the Corporate Debtor failed to make a payment of ?37,91,750, including interest, invoking the provisions of Section 9 of the Insolvency and Bankruptcy Code.

2. Ultratech Cement Limited supplied cement and ready mix concrete material to the Corporate Debtor and raised invoices amounting to ?30,78,125. The Petitioner was entitled to charge interest at 21% per annum on the delayed payment, totaling ?7,13,625 till a specified date.

3. The Corporate Debtor issued two cheques, one for ?15,54,600 and another for ?15,34,900, both of which were dishonored due to insufficient funds. This non-payment led to the demand notice issued by the Petitioner on 18.05.2018, demanding the total outstanding amount.

4. Despite the service of the demand notice, the Corporate Debtor did not respond, prompting the Petitioner to file an affidavit stating that the Corporate Debtor did not raise any dispute regarding the unpaid debt, as per Section 9(3)(b) of the Code.

5. The Corporate Debtor did not respond to the petition, with the copy sent being returned as "addressee left." The Petitioner published the petition in two newspapers and filed proof of service, yet there was no representation from the Corporate Debtor.

6. After reviewing the petition and accompanying documents, the Tribunal concluded that the Corporate Debtor was indeed liable to pay the claimed amount and had defaulted in making the payment, leading to the decision in favor of the Petitioner.

7. The Tribunal admitted the petition and declared a moratorium, prohibiting various actions against the Corporate Debtor, appointing an interim resolution professional, and specifying the effective period of the moratorium until the completion of the insolvency resolution process or liquidation, as per the provided directions.

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