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2020 (3) TMI 31 - Tri - Insolvency and BankruptcyMaintainability 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 Petition that there is no pre-existing dispute regarding the unpaid operational debt and the principal amount of ₹ 3,31,580/- as principal amount as per invoice dated 22.09.2017 and date of default is 14.10.2017. Thus, the existence of both debt and default is established. There is no provision for interest in the invoice. In our order dated 17.09.2019 we have given further opportunity to the Corporate Debtor to represent before the bench and file the reply. However, despite service of court notice on the Corporate Debtor, no reply has been filed. Therefore, it is held that the Corporate Debtor does not dispute its liability and has defaulted in the payment to the operational creditor. The Petition 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. Petition admitted - moratorium declared.
Issues:
1. Initiation of Corporate Insolvency Resolution Process under section 9 of the Insolvency & Bankruptcy Code, 2016 (IBC). 2. Default in payment by the Corporate Debtor. 3. Dispute regarding unpaid operational debt. 4. Appointment of Interim Resolution Professional. 5. Moratorium under section 14 of the IBC. 6. Management of the Corporate Debtor during the CIRP. Detailed Analysis: 1. The Company Petition was filed under section 9 of the IBC by the Operational Creditor seeking to initiate Corporate Insolvency Resolution Process against the Corporate Debtor, who failed to make payment of a specific amount as per the Purchase Order and invoice provided. 2. The Operational Creditor detailed the issuance of two cheques by the Corporate Debtor, both of which were returned unpaid due to insufficient funds. Legal notices were sent, demanding payment, and a Demand Notice under section 8 of the IBC was also served, to which the Corporate Debtor did not reply, establishing default. 3. The Tribunal noted that there was no pre-existing dispute regarding the unpaid operational debt, and the Corporate Debtor did not dispute its liability. Thus, the existence of debt and default was established, leading to the admission of the Petition for initiating CIRP against the Corporate Debtor. 4. The Operational Creditor proposed the name of an Interim Resolution Professional, who fulfilled the necessary requirements under the IBC. The Tribunal found the Petition complete as per legal requirements, showing the default in payment by the Corporate Debtor, and admitted the Petition for CIRP initiation. 5. The Tribunal ordered a moratorium under section 14 of the IBC, preventing various actions against the Corporate Debtor, and specified exceptions during the moratorium period, ensuring the continuation of essential goods or services supply and other necessary transactions. 6. The Tribunal appointed the proposed Interim Resolution Professional to manage the affairs of the Corporate Debtor during the CIRP period, directing the Corporate Debtor's officers and managers to cooperate and provide necessary information. Additionally, the Operational Creditor was directed to deposit a sum for expenses, and communication of the Order to relevant parties was mandated. This comprehensive analysis covers the key issues addressed in the judgment, providing a detailed overview of the legal proceedings and decisions made by the Tribunal.
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