2020 (4) TMI 508 - 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 - This Adjudicating Authority is satisfied that, (a) Existence of debt is above Rs. One Lac; (b) Debt is due; (c) Default has occurred on 08/06/2017; (d) Petition has been filed within the limitation period as the date of default is 08/06/2017 and the petition has been filed on 20/07/2018. (e) Inspite of giving Demand Notice in Form No. 3 as required by Section 8 of the IB Code read with Rule 5 of the IB Rules and Publication of notice in the newspaper Respondent did not choose to give any reply. (f) Copy of the Application filed before the Adjudicating Authority has been sent to the Corporate Debtor, Paper publication was done and the application filed by the Petitioner under section 9 of IBC is found to be complete for the purpose of initiation of Corporate Insolvency Resolution Process against the Corporate Debtor. Petition admitted.

Summary

Issues Involved:
1. Existence of debt and default
2. Filing within the limitation period
3. Response to demand notice
4. Appointment of Interim Resolution Professional (IRP)
5. Declaration of moratorium

Detailed Analysis:

Existence of Debt and Default:
The petition was filed by TCI Express Limited, the Operational Creditor, under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking the initiation of Corporate Insolvency Resolution Process (CIRP) against Sonali Energees Private Limited, the Corporate Debtor. The Operational Creditor claimed an outstanding debt of ?5,36,104 along with 24% interest per annum. Various invoices raised by the Operational Creditor for the transportation services provided were accepted by the Corporate Debtor but remained unpaid. The tribunal confirmed the existence of debt above ?1 lakh, due and defaulted as on 08/06/2017.

Filing within the Limitation Period:
The petition was filed on 20/07/2018, within the limitation period since the date of default was 08/06/2017. The tribunal observed that there was no pre-existing dispute before the filing of the application.

Response to Demand Notice:
A demand notice in Form 3 was issued by the Operational Creditor on 12/04/2018, which was duly served to the Corporate Debtor. The Corporate Debtor did not respond to the demand notice. Despite sufficient opportunities and notices served through paper publication, the Corporate Debtor chose not to appear before the Adjudicating Authority or file any reply.

Appointment of Interim Resolution Professional (IRP):
The Operational Creditor did not suggest any name for the IRP. The tribunal appointed Shri Omkarchand Rikhabdas Maloo as the IRP from the panel prepared by the Insolvency and Bankruptcy Board of India (IBBI). The IRP was directed to file a declaration disclosure statement within two days and make a public announcement of the moratorium. The IRP was also tasked with performing all functions as per Sections 15, 17, 18, 19, 20, and 21 of the Code and ensuring cooperation from the Corporate Debtor’s personnel.

Declaration of Moratorium:
The tribunal declared a moratorium as per Sections 13 and 14 of the Insolvency and Bankruptcy Code, 2016, prohibiting:
- Institution or continuation of suits or proceedings against the Corporate Debtor.
- Transferring, encumbering, or disposing of any assets of the Corporate Debtor.
- Any action to enforce security interests or recover property occupied by the Corporate Debtor.
The moratorium would be effective from the date of the order until the completion of the CIRP.

Order:
Considering the material and facts, the tribunal admitted the petition on 13/01/2020. An authentic copy of the order was directed to be communicated to the Operational Creditor, Corporate Debtor, IRP, and the Registrar of Companies. The IRP was instructed to protect and preserve the value of the Corporate Debtor’s property and perform duties in accordance with the Code, Rules, and Regulations.