2019 (10) TMI 801 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Section 9 of Insolvency and Bankruptcy Code, 2016 read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 - debt due and payable by the Corporate Debtor - HELD THAT - The present application is complete and the Applicant is entitled to claim its dues, establishing the default in payment of the operational debt beyond doubt, and fulfillment of requirements under section 9(5) of the Code. Application admitted - moratorium declared.

Summary

Issues:
- Application under Section 9 of Insolvency and Bankruptcy Code, 2016 for Corporate Insolvency process initiation.
- Unpaid invoices and outstanding debt by the Corporate Debtor.
- Dispute raised by the Corporate Debtor regarding quality aspects of supplied material.
- Ex parte proceedings due to non-appearance of the Corporate Debtor.
- Admittance of the application and appointment of Interim Resolution Professional.

Analysis:
1. The application was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 by M/s Jaswant International Private Limited seeking to initiate the Corporate Insolvency process against M/s Callina Care Overseas Private Limited. The applicant alleged that the respondent owed them a total debt of ?40,41,763, including a principal amount of ?25,86,982 for unpaid supplies and interest charged at 18% per annum.

2. The applicant, engaged in the manufacture of multi-layer plastic films, claimed to have supplied goods to the respondent from 31.01.2015 to 03.03.2016, with an outstanding amount of ?25,86,982. Despite multiple requests and reminders, the respondent neither paid nor responded to the applicant, leading to the issuance of a notice under Section 8 of the Insolvency and Bankruptcy Code on 29.05.2018.

3. The respondent, through a letter, raised a dispute regarding the quality of the supplied material for the first time, mentioning a deduction of USD 80,000 from the outstanding amount. However, the Tribunal proceeded ex parte as the respondent did not appear before the Tribunal despite being duly served with notices.

4. The Tribunal found the application complete, establishing the default in payment by the respondent. Consequently, the application was admitted under Section 9(5) of the IBC, 2016, triggering a moratorium under Section 14(1) that prohibited various actions against the Corporate Debtor, including suits, asset disposal, and recovery of property.

5. As the Operational Creditor did not propose the name of an Interim Resolution Professional, the Bench appointed Mr. Piyush Moona as the IRP of the Corporate Debtor. The IRP was directed to undertake necessary steps under the statute, specifically in compliance with Sections 15, 17, 18, 20, and 21 of the Code. The order was communicated to the parties and the IRP, with a copy forwarded to IBBI for record-keeping.