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2020 (3) TMI 1214 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt an dispute or not - HELD THAT - It is noted that since the advance payment was effected by the corporate debtor only on February 2, 2018 the corporate debtor cannot allege the delay from the part of operational creditor in completion of the work. Apparently delay occurred from the part of the corporate debtor in releasing the advance which resulted in delayed commencement of the work assigned to the operational creditor. The rest of the averments with respect to the matches are not relevant which have been pointed out reasons for dispute are baseless and bogus, since the existence of the operational debt has been proved by applicant, it is seen from the correspondence regimes of office e-mail communication that they have not disputed existences of operational debt which has fallen due after completion of the work by the operational creditor. The application is admitted as has been filed by the operational creditor and consequently corporate insolvency resolution process is initiated - the application stands admitted in terms of section 9(5) of the IBC, 2016 and the moratorium shall come in to effect as of this date.
Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP) 2. Existence and Validity of Operational Debt 3. Delay in Project Completion and Payment Disputes 4. Appointment of Interim Resolution Professional (IRP) 5. Declaration of Moratorium Detailed Analysis: 1. Initiation of Corporate Insolvency Resolution Process (CIRP): The application was filed by the operational creditor under Section 9 of the Insolvency and Bankruptcy Code, 2016 (I&B Code 2016), seeking to initiate the CIRP against the corporate debtor. The operational creditor requested the Tribunal to declare a moratorium and appoint an interim resolution professional. 2. Existence and Validity of Operational Debt: The operational creditor claimed a sum of ?77,52,613 plus interest at 18% per annum from March 1, 2018, aggregating to ?7,36,497, arising from a works contract for the sale and supply of HI-Mast sporting floodlights and related work at Jawaharlal Nehru Stadium, Coimbatore. The debt was supported by invoices and a demand notice issued on September 10, 2018, with no response or dispute from the corporate debtor. 3. Delay in Project Completion and Payment Disputes: The corporate debtor contended that the floodlights were not ready by the agreed deadline, impacting their ability to host I-League matches with the required LUX levels for live TV coverage. The operational creditor argued that delays were due to late advance payments by the corporate debtor, which were made only on February 2, 2018. The operational creditor also provided evidence of a dishonoured cheque for ?50,00,000 issued by the corporate debtor. 4. Appointment of Interim Resolution Professional (IRP): The operational creditor proposed Mr. P. Sriram as the IRP, whose particulars were provided in the application. The Tribunal appointed Mr. P. Sriram as the IRP, with the Registration Number IBBI/IPA-002/IP-N00292/2017-18/10895, to take forward the CIRP of the corporate debtor. 5. Declaration of Moratorium: The Tribunal declared a moratorium as per Section 14(1) of the I&B Code 2016, which included: - Suspension of suits or continuation of pending suits or proceedings against the corporate debtor. - Prohibition on transferring, encumbering, alienating, or disposing of the corporate debtor’s assets. - Prohibition on actions to foreclose, recover, or enforce any security interest. - Prohibition on recovery of any property by an owner or lessor occupied by the corporate debtor. The moratorium shall remain effective until the completion of the CIRP, or until the Tribunal approves a resolution plan or passes an order for liquidation. Conclusion: The Tribunal admitted the application under Section 9(5) of the I&B Code 2016, initiating the CIRP against the corporate debtor. A moratorium was declared, and Mr. P. Sriram was appointed as the IRP to manage the insolvency resolution process. The Tribunal's order and the moratorium details were communicated to the operational creditor, corporate debtor, and the Insolvency and Bankruptcy Board of India (IBBI).
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