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2020 (4) TMI 678 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - dishonor of cheque - section 138 of NI Act - HELD THAT - In the instant case, the documents produced by the operational creditor clearly establish the 'debt' and there is default on the part of the Corporate Debtor in payment of the 'operational debt' - On perusal of the records it is also found that the corporate debtor has never raised any dispute on issuance of notice u/s. 8 of the I B Code nor have ever raised any dispute prior to the issuance of notice. The respondent has defaulted the debt and has admitted the operational debt - This adjudicating authority is of the considered view that operational debt is due to the Applicant and it fulfilled the requirement of I B Code. That, service is complete and no dispute has been raised by the respondent at any point of time. That, Applicant is an Operational Creditor within the meaning of section 5 sub-section 20 of the Code. From the aforesaid material on record, petitioner is able to establish that there exists debt as well as occurrence of default and the amount claimed by operational creditor is payable in law by the corporate debtor as the same is not barred by any law of limitation and/or any other law for the time being in force. It is evident that the corporate debtor has committed default in payment of operational debt and, therefore, it is a fit case to initiate Insolvency Resolution Process by admitting the Application under section 9(5)(1) of the Code - petition admitted - moratorium declared.
Issues:
1. Petition under section 9 of the Insolvency & Bankruptcy Code, 2016. 2. Default in payment of operational debt by the corporate debtor. 3. Admissibility of the application and evidence presented. 4. Appointment of an Interim Resolution Professional. 5. Declaration of moratorium and its implications. Issue 1: Petition under section 9 of the Insolvency & Bankruptcy Code, 2016: The petitioner, an operational creditor, filed a petition under section 9 of the Insolvency & Bankruptcy Code, 2016 against the respondent, a corporate debtor, for non-payment of dues amounting to ?18,71,779. The petitioner supplied Ready Mix Concrete (RMC) to the respondent as per purchase orders, and despite receipt and acceptance of the materials, the respondent failed to pay the outstanding amount. The petitioner issued demand notices which were returned undelivered, leading to the initiation of CIRP proceedings. Issue 2: Default in payment of operational debt by the corporate debtor: The respondent denied the claims, alleging inferior quality of materials supplied by the petitioner. However, the respondent failed to provide evidence supporting this claim. The Tribunal found that the respondent did not dispute the operational debt or raise any objections before the issuance of notices. The Tribunal concluded that the respondent defaulted on the debt and admitted to the operational debt, leading to the initiation of insolvency resolution proceedings. Issue 3: Admissibility of the application and evidence presented: The Tribunal reviewed the application and supporting documents, finding them complete and in compliance with the Insolvency & Bankruptcy Code. The petitioner fulfilled the requirements, and the respondent's objections regarding the quality of materials supplied were deemed unsubstantiated due to lack of evidence. The Tribunal held that the debt was established, default occurred, and the amount claimed was legally payable by the respondent. Issue 4: Appointment of an Interim Resolution Professional: In line with the Code, the Tribunal appointed an Interim Resolution Professional to oversee the insolvency resolution process. Shri Manish Kumar Bhagat was appointed as the Interim Resolution Professional to manage the proceedings and ensure compliance with the Code's provisions. Issue 5: Declaration of moratorium and its implications: The Tribunal declared a moratorium, prohibiting various actions against the corporate debtor, including legal proceedings, asset transfers, and property recovery. The order specified the duration of the moratorium and directed the continuation of essential services to the corporate debtor. Additionally, the Tribunal instructed the Registry to notify the Registrar of Companies about the insolvency resolution process to prevent any adverse actions against the respondent company. This comprehensive analysis of the Tribunal's judgment highlights the key issues, findings, and actions taken in the context of the Insolvency & Bankruptcy proceedings initiated by the operational creditor against the corporate debtor.
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