2019 (9) TMI 181 - Tri - Insolvency and Bankruptcy

Maintainability of petition - Initiation of Corporate Insolvency Resolution Process (CIRP) - Corporate Debtor - 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 going through the Petition and after hearing the submissions of the Counsel for the Petitioner came to the conclusion that there is debt and default. 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 - moratorium declared.

Summary

Issues:
1. Petition filed by Ultratech Cement Ltd. to initiate Corporate Insolvency Resolution Process (CIRP) against Kale Infra Project Pvt. Ltd. for default in payment.
2. Allegation of default on 19.02.2016 amounting to ? 20,36,440/- under Section 9 of Insolvency and Bankruptcy Code.
3. Dishonor of cheque issued by Corporate Debtor and subsequent failure to respond to demand notice.
4. Admission of the petition by the Tribunal and declaration of moratorium with specific directions.

Analysis:
1. Ultratech Cement Ltd. filed a Company Petition seeking to commence the Corporate Insolvency Resolution Process (CIRP) against Kale Infra Project Pvt. Ltd. for default in payment, invoking Section 9 of the Insolvency and Bankruptcy Code. The Petitioner alleged that the Corporate Debtor failed to make a payment of ? 20,36,440/- on 19.02.2016, leading to the initiation of the petition.

2. The Petitioner, as a cement manufacturer and supplier, supplied cement bags to the Corporate Debtor for infrastructural projects. After reconciling accounts, a balance of ? 20,36,440/- was confirmed by the Petitioner. Despite issuing a cheque for the said amount, it was dishonored due to insufficient funds, following which a statutory notice was sent on 25.01.2016 demanding payment.

3. The Corporate Debtor failed to respond to the demand notice, and subsequent appearances before the Tribunal did not result in the settlement of dues. The Tribunal, after reviewing the petition and submissions, concluded that there existed a debt and default on the part of the Corporate Debtor, leading to the admission of the petition.

4. The Tribunal, satisfied with the compliance of the petition with Section 9 of the Insolvency and Bankruptcy Code, admitted the petition and declared a moratorium. The moratorium included prohibitions on legal proceedings against the Corporate Debtor, restrictions on asset disposal, continuity of essential services, and appointment of an interim resolution professional. The moratorium was to be effective from 06.05.2019 until the completion of the insolvency resolution process or other specified outcomes as per the Code. The Tribunal directed the Registry to communicate the order to the parties and the appointed resolution professional promptly.