2020 (4) TMI 505 - 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 debt and default in question having no dispute and having no objections filed by the Respondent. The Adjudicating Authority has granted sufficient time to explore the possibility of settlement of the issue in question. Therefore, there is no option left for the Adjudicating Authority except to admit the case by initiating CIRP in respect of the Corporate Debtor, appointing IRP and imposing moratorium, etc. Application admitted - moratorium declared.

Summary

Issues Involved:
Initiation of Corporate Insolvency Resolution Process under section 9 of the IBC, 2016 due to default in payment by the Corporate Debtor.

Detailed Analysis:

1. Background and Relationship Between Parties:
The Petitioner, an Operational Creditor, filed a petition seeking initiation of Corporate Insolvency Resolution Process against the Respondent, a Corporate Debtor, for defaulting on payments totaling &8377; 1,32,14,015/- along with interest. The parties had a longstanding business relationship involving the supply of Ready Mix Concrete by the Petitioner to the Respondent under various purchase orders.

2. Debt Confirmation and Demand Notice:
The Petitioner sent a letter confirming the outstanding balance to the Respondent, which was acknowledged and confirmed by the Respondent. Subsequently, a Demand Notice was issued by the Petitioner demanding payment within 10 days. The Respondent neither disputed the debt nor made any payments following the notice.

3. Legal Proceedings and Lack of Response:
Despite receiving the Demand Notice and subsequent opportunities to settle the matter, the Respondent did not respond or file any objections to the petition. The Petitioner provided evidence of the debt through purchase orders, invoices, and correspondence, demonstrating the clarity of the outstanding amount.

4. Adjudication and Decision:
After considering the submissions from both parties and reviewing the relevant provisions of the Insolvency and Bankruptcy Code, the Tribunal admitted the petition and initiated the Corporate Insolvency Resolution Process. An Interim Resolution Professional was appointed to handle the resolution process, and a moratorium was declared to protect the assets of the Corporate Debtor during the resolution period.

5. Directions and Compliance:
The Tribunal directed the IRP to follow all provisions of the IBC, 2016, and submit progress reports periodically. The Board of Directors and staff of the Corporate Debtor were instructed to cooperate with the IRP. The case was scheduled for a progress report on a specified date to ensure timely completion of the resolution process.

This detailed analysis covers the key aspects of the legal judgment involving the initiation of Corporate Insolvency Resolution Process due to default in payment by the Corporate Debtor, highlighting the sequence of events, legal proceedings, and the Tribunal's decision and directives.