2019 (10) TMI 415 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor has not paid the outstanding dues - Existence of dispute - 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 No. 11 to 20 to the application. That, there is/are no existing dispute raised by the respondent at any point of time nor there is any proceeding pending viz. suit or arbitration between the parties in any Court of Law. 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. Application admitted - moratorium declared.

Summary

Issues:
Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 for Insolvency Resolution Process.

Analysis:
The applicant, an operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, seeking to initiate the insolvency resolution process against the respondent, a corporate debtor. The applicant claimed outstanding dues of ?10,57,662 from the respondent, supported by invoices and a demand notice. The respondent admitted the debt but cited financial constraints due to economic recession, requesting a year to settle the amount. The respondent also expressed efforts to revive the company within 12-14 months to clear debts. The adjudicating authority examined the evidence and found the operational debt due to the applicant. The respondent did not raise any dispute or pending proceedings regarding the debt. The application was found complete, and an interim insolvency professional was appointed.

The adjudicating authority referred to the legislative guide on insolvency law and Supreme Court judgments to determine the legitimacy of the debt and absence of dispute. The authority found the operational debt established by the applicant, with no disputes raised by the respondent. The application was deemed complete, and an interim insolvency professional was appointed to proceed with the resolution process. The authority declared a moratorium, prohibiting legal actions against the corporate debtor and directing the insolvency professional to make a public announcement for claims submission. The moratorium was effective until the completion of the insolvency resolution process or liquidation, with provisions for essential services to continue for the corporate debtor. The petition was admitted, and the order communicated to all relevant parties.

In conclusion, the application under Section 9 of the Insolvency and Bankruptcy Code was admitted by the adjudicating authority, initiating the insolvency resolution process for the corporate debtor. The authority appointed an interim insolvency professional and declared a moratorium to protect the corporate debtor's assets and facilitate the resolution process. The decision was based on the evidence provided by the applicant, the respondent's admission of debt, and the absence of disputes or pending proceedings.