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2019 (10) TMI 275 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Amount outstanding against Corporate debtor - existence of debt and dispute or not - HELD THAT - The perusal of the Counter filed by the Corporate Debtor reveals that the Corporate Debtor has fairly admitted that to execute the orders placed by the Operational Creditor, the Corporate Debtor has received an amount of ₹ 1,75,000/- from the Operational Creditor and it could neither perform its obligation nor could repay the amount received from the Operational Creditor - there is a clear admission of the outstanding debt due to the Operational Creditor by the Corporate Debtor. The Operational Creditor has fulfilled all the requirements of law for admission of the Application. This Authority is satisfied that the Corporate Debtor has committed default in making payment of the outstanding debt claimed by the Operational Creditor - Application admitted - moratorium declared.
Issues:
Admission of application under Section 9 of the Insolvency & Bankruptcy Code, 2016; Default in payment by Corporate Debtor; Declaration of moratorium; Appointment of Interim Resolution Professional (IRP). Admission of Application: The Operational Creditor filed an application under Section 9 of the Insolvency & Bankruptcy Code, 2016 seeking admission to initiate Corporate Insolvency Resolution Process against the Corporate Debtor. The claimed outstanding amount was ?3,13,409/- as of 30.09.2018. The Corporate Debtor failed to pay the debt. The Operational Creditor complied with all requirements, including issuing a Demand Notice under Section 8 of the Code. The Corporate Debtor admitted its inability to repay the debt, leading to the satisfaction of default by the Authority. The application was admitted, and the Corporate Insolvency Resolution Process was initiated. Default in Payment: The case involved an order placed by the Operational Creditor for paint coating services with the Corporate Debtor. Despite receiving an advance of ?1,75,000/-, the Corporate Debtor canceled the order and assured to return the advance. Subsequent demands for repayment were unmet, leading to the Operational Creditor seeking legal recourse. The Corporate Debtor admitted its failure to perform obligations or repay the amount received, acknowledging the outstanding debt. The Corporate Debtor's inability to make payments in the near future was recognized, further supporting the admission of the application. Declaration of Moratorium: Upon admission of the application, the Tribunal declared a moratorium effective from the date of the order until the completion of the Corporate Insolvency Resolution Process. The moratorium prohibited various actions against the Corporate Debtor, including legal proceedings, asset transfers, and enforcement of security interests. Essential supplies to the Corporate Debtor were safeguarded during this period, ensuring continuity of operations. Appointment of IRP: Mr. J. Manivannan was appointed as the Interim Resolution Professional (IRP) as proposed by the Operational Creditor. The IRP was directed to take charge of the Corporate Debtor's management immediately, initiate the public announcement process, and call for creditor claims. The Directors and management associates of the Corporate Debtor were instructed to cooperate with the IRP in discharging his duties. The Registry was tasked with communicating the order to all relevant parties for compliance. This detailed analysis summarizes the legal judgment involving the admission of an insolvency application, default in payment by the Corporate Debtor, declaration of moratorium, and appointment of an Interim Resolution Professional in a comprehensive manner, preserving key legal terminology and significant details from the original text.
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