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2019 (10) TMI 106 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor - debt due and payable or not - HELD THAT - This adjudicating authority is of the considered view that operational debt is due to the Applicant and in support of that operational creditor has placed copy of chart giving details of salary outstanding. That, the respondent has acknowledged the debt in letter dated 01.01.2019 and has not raised any dispute. In the reply filed by the respondent, the receipt of notice has been acknowledged. Therefore, service is complete. That, Applicant is an Operational Creditor within the meaning of sub-section (5) of Section 20 of the Code. The petitioner is able to establish that there exists debt as well as occurrence of default - thus, the Application filed by the Applicant is complete in all respects. Application admitted - moratorium declared.
Issues Involved:
Application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 to trigger Insolvency Resolution Process against a corporate debtor. Analysis: 1. The applicant, an operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Insolvency Resolution Process against the respondent company, a corporate debtor. 2. The applicant, an employee of the respondent company, provided details of outstanding salary from May 2017 to December 2018, along with supporting documents, including a demand notice, appointment letter, and correspondence between the parties. 3. The respondent company, through its authorized representative, admitted the inability to pay the outstanding salary due to the company's non-operational status following the promoter's arrest and subsequent release on bail. 4. The Tribunal examined the criteria under Section 9 of the Code to determine the existence of operational debt, the due and payable status of the debt, and the absence of a dispute between the parties regarding the debt. 5. Referring to the legislative guide on Insolvency Law, the Tribunal assessed whether the debt was subject to a legitimate dispute or set off, emphasizing the need to establish the debt's existence and default occurrence. 6. Based on the material on record, including the acknowledgment of debt by the respondent and the absence of a dispute, the Tribunal concluded that the applicant was an Operational Creditor under the Code, and the debt was due and payable. 7. The Tribunal found the application complete and appointed an Interim Insolvency Professional to oversee the Insolvency Resolution Process, as per the provisions of the Code. 8. The Tribunal declared a moratorium to prohibit legal actions against the corporate debtor, asset transfers, enforcement of security interests, and property recovery during the Insolvency Resolution Process. 9. The order of moratorium also ensured the continuity of essential services to the corporate debtor and specified the effective period until the completion of the resolution process or liquidation approval. 10. The Tribunal disposed of the petition, communicating the order to all relevant parties involved, including the Applicant, Financial Creditor, Corporate Debtor, and the Interim Insolvency Resolution Professional.
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