2020 (3) TMI 27 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and default or not - HELD THAT - It is noticed from the documents placed on record the shipment was undertaken by the Operational Creditor on the instructions of the Corporate Debtor from time to time. There is also an acknowledgement of liability at p.53. The debt is within limitation since the date of default is 22.09.2017. There is default of a debt due and payable and the default is in excess of the 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. This 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) for Corporate Insolvency Resolution Process (CIRP) against a private company.

Detailed Analysis:

Jurisdiction and Default:
The Company Petition was filed under section 9 of the IBC by the Operational Creditor against the Corporate Debtor, a private company limited by shares. The Corporate Debtor failed to make a payment of a specific sum, leading to the default. The Operational Creditor maintained a ledger account and provided evidence of services rendered through invoices and emails, establishing the debt and default.

Admission of Petition:
The Adjudicating Authority found the default to be within the stipulated amount under the IBC and established, admitting the petition for initiation of CIRP against the Corporate Debtor. Despite service and notice to the Corporate Debtor, there was no representation from their side during the proceedings.

Orders and Moratorium:
Upon admitting the petition, the Authority ordered the initiation of CIRP against the Corporate Debtor. A moratorium under section 14 of the IBC was declared, preventing suits, asset disposal, and other actions against the Corporate Debtor during the CIRP period. Essential supplies were to continue, and the IRP was to be appointed by the Authority.

Operational Procedures:
The Order detailed the procedures during the CIRP, including the appointment of the IRP, management vesting in the IRP, deposit requirements by the Operational Creditor, communication protocols, and compliance reporting to the Registrar of Companies.

Conclusion:
The judgment admitted the Company Petition, initiated CIRP against the Corporate Debtor, declared a moratorium, and outlined operational procedures for the CIRP period. The decision was based on the established default and non-representation by the Corporate Debtor, ensuring compliance with the IBC regulations and procedures.