2019 (12) TMI 565 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor defaulted in making repayment - date of default - HELD THAT - The application made by the Operational Creditor is complete in all respects as required by law. It clearly shows that the Corporate Debtor is in default of a debt due and payable, and the default is in excess of minimum amount of one lakh rupees stipulated under section 4(1) of the IBC. Therefore, the default stands established and there is no reason to deny the admission of the Petition - In view of this, the Adjudicating Authority admits this Petition and orders initiation of CIRP against the Corporate Debtor. Petition admitted - moratorium declared.

Summary

Issues:
Company petition under section 9 of the Insolvency & Bankruptcy Code, 2016 (IBC) seeking Corporate Insolvency Resolution Process (CIRP) against a private limited company for defaulting on payments.

Analysis:
The petition was filed by the Operational Creditor against the Corporate Debtor for failing to pay a substantial amount as principal and interest. The Operational Creditor provided detailed evidence of the debt owed, including purchase orders, invoices, and bank statements. A Demand Notice was served to the Corporate Debtor, which went unanswered. The Corporate Debtor admitted its inability to pay the debt during the hearing, leading to the establishment of default. The Adjudicating Authority found the application complete and admitted the petition, initiating CIRP against the Corporate Debtor.

The Adjudicating Authority ordered a moratorium under section 14 of the IBC, preventing legal actions against the Corporate Debtor's assets. Essential supplies to the Corporate Debtor were to continue during this period. The appointed Interim Resolution Professional (IRP) was tasked with managing the Corporate Debtor during the CIRP period. The Operational Creditor was directed to deposit a sum for expenses related to public notices and claims, subject to approval by the Committee of Creditors. The Registry was instructed to notify all relevant parties promptly.

The judgment ensured compliance with the IBC regulations and appointed the IRP to oversee the resolution process. The management of the Corporate Debtor was transferred to the IRP, and strict timelines were set for document submission. The judgment emphasized the importance of communication and compliance with regulatory authorities, including updating the Master Data of the Corporate Debtor with the Registrar of Companies.