2019 (10) TMI 176 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate debtor - dishonor of cheque due to insufficiency of funds - debt due and payable -existence of dispute 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 the invoices at Page Nos. 22 to 260 to the application. As per the track report submitted by the applicant it appears that the notice has been served upon the respondent on 10.04.2019. Therefore service is complete and the dispute raised by the respondent is not supported by any document. That Applicant is an Operational Creditor within the meaning of sub-section (5) of Section 20 of the Code - thus the 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 and deserves to be admitted. Application admitted - moratorium declared.

Summary

Issues Involved:
- Application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 against a corporate debtor.
- Determination of operational debt exceeding a specified amount.
- Examination of documentary evidence for the debt.
- Assessment of dispute existence between parties.
- Appointment of an interim insolvency professional.
- Declaration of moratorium and initiation of insolvency resolution process.

Analysis:
1. The application was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 to trigger the insolvency resolution process against the respondent corporate debtor. The applicant, an operational creditor engaged in publication services, claimed default in payment by the respondent, leading to the demand notice for a substantial amount.

2. The respondent failed to respond adequately to the notices and claims made by the applicant. Despite the respondent's assertion of making a payment through RTGS, the applicant provided evidence of a dishonored cheque, indicating a lack of substantiation by the respondent for the claimed payment.

3. The Tribunal reviewed the legislative guide on Insolvency Law, emphasizing the need to establish the legitimacy of the debt and the absence of a valid dispute or set off. The applicant successfully demonstrated the existence of operational debt through invoices and other supporting documents, leading to the initiation of the insolvency resolution process.

4. The Tribunal appointed an interim insolvency professional and declared a moratorium to prohibit certain actions against the corporate debtor, ensuring the continuation of essential services. The order of moratorium was to remain in effect until the completion of the insolvency resolution process or approval of a resolution plan.

5. The application was admitted, and the insolvency resolution process was initiated based on the evidence presented by the operational creditor. The Tribunal disposed of the petition without imposing any costs and directed communication of the order to all relevant parties involved.

This detailed analysis covers the key aspects of the judgment, including the application process, debt verification, dispute assessment, professional appointment, moratorium declaration, and resolution process initiation, providing a comprehensive overview of the legal proceedings.