2020 (2) TMI 378 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT - The Operational Creditor is entitled to claim its dues, establishing the default in payment of the operational debt beyond doubt, moreover since the Corporate Debtor has admitted its inability to pay its debts. Hence, the present application is admitted - The registered office of respondent is situated in New Delhi and therefore this Tribunal has jurisdiction to entertain and try this application. Application admitted - moratorium declared.

Summary

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

Detailed Analysis:
1. The application was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, by the Operational Creditor, seeking to initiate the Corporate Insolvency process against the Corporate Debtor, based on outstanding dues.
2. The Operational Creditor, a company incorporated under the Companies Act, provided materials to the Corporate Debtor, resulting in an outstanding balance of approximately ?16.92 Crores, leading to non-payment issues.
3. Despite assurances and post-dated cheques issued by the Corporate Debtor, payments were not made, prompting the Operational Creditor to send a demand notice under Section 8 of the IBC, 2016, for ?3,35,24,547/-.
4. The total debt claimed by the Operational Creditor was ?4,05,19,069/-, including principal and interest, with the Corporate Debtor failing to respond or clear the dues.
5. The Corporate Debtor raised objections, citing quality issues in supplies and adjustments made, leading to disputes over the outstanding amount, which remained unresolved.
6. During arguments, the Corporate Debtor admitted its inability to make payments, further strengthening the Operational Creditor's claim for initiating insolvency proceedings.
7. The Tribunal found the Operational Creditor entitled to claim its dues, given the default in payment and the Corporate Debtor's acknowledgment of its inability to pay debts, leading to the admission of the application.
8. The Tribunal appointed an Interim Resolution Professional (IRP) and imposed a moratorium under Section 14(1) of the IBC, 2016, prohibiting certain actions by the Respondent during the process.
9. The Operational Creditor was directed to deposit a sum towards immediate expenses, to be reimbursed later, and the registry was instructed to notify all relevant parties about the admission of the application within a specified timeframe.

This detailed analysis covers the key aspects of the judgment, including the application, debt details, objections raised, admission of the application, appointment of IRP, moratorium imposition, and procedural directives issued by the Tribunal.